Eco
The U.S. government began fiscal year 2027 with a record budget deficit of $404 billion in October, marking an increase of $120 billion or 42% compared to the same period last year. This rise occurred amid declining government revenues alongside a sharp increase in spending, according to data released by the U.S. Treasury Department. Government spending hit a record level for October at $773 billion, up by $84 billion or 12% year-over-year. The spending increase was driven by the Department of Agriculture, which saw a $14 billion or 80% rise due to agricultural relief payments, along with a $28 billion or 30% increase in military expenditures. The rise in military spending reflects payments to military credit funds in October, which had been deferred last year due to a government shutdown, as well as increased spending on operations, maintenance, and military procurement. Total interest on the federal debt also rose by $11 billion or 11%, reaching $115 billion. On the revenue side, collections fell by $35 billion or 9% to $369 billion, partly due to a decline in net customs duties. Non-withheld individual taxes dropped by $29 billion or 36% compared to the previous year, which had seen elevated levels due to postponed tax filing deadlines for California residents affected by 2025 wildfires. After calendar-related adjustments, due to the early disbursement of some November aid payments into October in both fiscal years, the Treasury indicated the adjusted deficit would have been $285 billion, up $94 billion or 49% from the same period last year.
