U.S. Budget Deficit Surges 20% in July, Reaching Record $291 Billion

The U.S. government faced a significant budget deficit in July, marking an increase of nearly 20% compared to the previous year. The deficit reached $291 billion, driven by a rapid rise in government spending that outpaced revenue growth, according to a recent report from the Treasury Department. In detail, this July's deficit was up 19%, or $47 billion, from July 2024. Government receipts increased by 2%, amounting to $338 billion, while outlays surged by 10%, reaching $630 billion—an all-time high for that month. Notably, July 2023 experienced fewer business days than its predecessor, and the Treasury noted that adjusting for this factor would have potentially raised receipts by about $20 billion. This adjustment would have brought the deficit down to approximately $271 billion. One contributing factor to the revenue increase this month was the rise in gross customs receipts, which escalated to around $28 billion from $8 billion the previous year, attributed to heightened tariff rates initiated during President Donald Trump’s administration. According to a Treasury official, these tariffs have resulted in increased duties paid by companies importing goods into the United States. Looking at the broader fiscal landscape for the first ten months of the fiscal year, the Treasury reported a cumulative deficit of $1.629 trillion, marking a 7% increase, or $112 billion, from the same timeframe last year. During this period, total receipts climbed 6%, or $262 billion, resulting in a record high of $4.347 trillion, while total outlays similarly rose by 7%, totaling $5.975 trillion—also a record for the ten-month span. (Reporting by David Lawder)