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US starts 2027 fiscal year with record October budget deficit of $404 billion
Reuters • • business
Key Points:
- The US government began fiscal year 2027 with a record $404 billion budget deficit in October, a 42% increase from the previous year, driven by lower receipts and higher spending.
- Treasury Secretary Scott Bessent faces challenges after a nearly $2 trillion deficit in fiscal 2026, the largest in five years, with the deficit at 6.2% of GDP, well above his 3% reduction target.
- October 2026 receipts dropped by $35 billion (9%), including a 39% fall in customs collections and a 36% decline in individual non-withheld tax receipts compared to the previous year.
- Outlays hit a record $773 billion for October, up 12%, fueled by significant increases in farm relief payments, military spending delayed by last year's shutdown, and rising interest payments on federal debt.
- Adjusted for calendar shifts, the October deficit would have been $285 billion, still a 49% increase from the prior year, highlighting ongoing fiscal pressures.
