WASHINGTON (AP) — The U.S. government's budget deficit shrank to just $37 billion in March from $107 billion in the same month last year, the latest sign of improvement in the nation's finances. The deficit was the lowest for the month of March in 14 years.

The deficit fell partly because revenue jumped 16 percent to $216 billion, the Treasury Department said in its monthly budget report Thursday. Individual income and Social Security tax receipts have increased as employers have steadily hired more workers in the past year.

Changes in the timing of about $40 billion in benefit payments and tax receipts were also a big reason for the smaller deficit. Most of that change involved benefit payments that were made in February this year but had occurred in March last year.

Excluding the impact of those timing shifts, the deficit would have been $77 billion last month. Spending still dipped 2 percent in March, even excluding the timing shift.

Defense spending fell 16 percent to $45 billion last month, and spending on unemployment benefits also fell.

Corporate profits have also perked up from last year, boosting corporate tax receipts 7 percent in March, to $36 billion.

The government's 2014 budget year began Oct. 1 and is now half over. In the first six months of the budget year, the deficit was $413 billion, down from $600 billion in the first half of last year.

Tax receipts rose 10 percent in the October-March period, the Treasury Department says, while spending fell 4 percent.

President Barack Obama projected last month that the deficit for the full year will drop to $649 billion, down from $680 billion in the previous year.

The nonpartisan Congressional Budget Office is forecasting an even bigger improvement, projecting that this year's deficit will decline to $514 billion and fall further to $478 billion next year.

That would be less than half the $1 trillion-plus deficits that existed for the first four years of Obama's presidency. The deficit rose to a record level of $1.4 trillion in 2009.

But even so, the budget gap remains historically high. And the CBO sees the deficits starting to rise after next year, driven higher by greater spending on Social Security and Medicare as baby boomers retire.

The higher deficits have sparked budget wars between Democrats and Republicans in Washington for the past three years, causing two government shutdowns. But those fights may subside this year following an agreement reached last December on the broad outlines for spending for this year and next.