US starts 2027 fiscal year with record October budget deficit of $404 billion
SPY•The US government recorded a $404 billion deficit in October, a record for the month and up $120 billion, or 42%, from a year earlier. Receipts fell 9% to $369 billion while outlays rose 12% to a record $773 billion.
1. Receipts declined
October receipts fell by $35 billion, or 9%, to $369 billion. Net customs collections dropped 39% to $19.2 billion from $31.3 billion a year earlier, while individual non-withheld tax receipts fell 36% to $51 billion.
2. Outlays set a record
Outlays reached $773 billion, up $84 billion, or 12%, from a year earlier. The increases included $14 billion more in Agriculture Department spending, driven by farm relief payments, and $28 billion more in military spending; gross interest on federal debt rose $11 billion to $115 billion.
3. Adjusted deficit rises
After adjustments for benefit payments shifted into October, the deficit would have been $285 billion, up $94 billion, or 49%, from a year earlier. Treasury Secretary Scott Bessent has set a goal of reducing the deficit to 3% of US GDP; the fiscal 2026 deficit was estimated at 6.2% of GDP, compared with 5.8% in fiscal 2025.
