The Congressional Budget Office (CBO) has released its Monthly Budget Review (MBR) for October. This latest MBR finalizes September's report that projected a deficit $125 billion less than the shortfall recorded in 2009. It turns out the government incurred a $1.3 trillion deficit, which is only $122 billion less than the deficit Uncle Sam racked up in 2009. On a positive note, though, it's confirmed that this the biggest one-year nominal drop in the deficit ever recorded.

Of course, none of this "good news" about lower deficits is really being celebrated in Washington or around the rest of the country as we're still suffering from a weak economic recovery and unemployment levels above 9 percent. Moreover, the deficit is still at 8.9 percent as a percentage of gross domestic product (GDP). Though this is much less than the hefty 10 percent the deficit came in at last year, it's still the second-highest deficit as a share of GDP since 1945, with last year's being the highest.

For the first month of the new fiscal year, "CBO estimates that the government recorded a deficit of $140 billion," which is "about $37 billion less than the shortfall recorded in the same month last year." Congress' budget office also points out, "Withholding for income and payroll taxes was $7 billion higher than in October 2009, reflecting continued strengthening of wages."

With the gradual reduction and expiration of stimulus spending occurring this year, expect to see these trends in lower deficits continue month to month. Excluding other economic considerations, because the stimulus wasn't as strong as many claimed that it needed to be, though, it's unclear whether positive economic signs – like the wage signals – will continue to accompany future MBRs.

Read the rest of the CBO report to soak up all the estimates, budget totals, and receipts and outlays you can get your hands on.

Image by Flickr user brainware3000 used under a Creative Commons license.