US starts 2027 fiscal year with record October budget deficit of $404 billion

The US government started the ​2027 fiscal year with a $404 ​billion budget deficit ‌for October, a ​record for the month and $120 billion, or 42%, higher than the year-earlier period, as receipts ‌shrank and outlays grew sharply, the Treasury Department said on Thursday. October receipts fell by $35 billion, or 9%, to $369 billion, due partly to lower net customs ‌duty collections. Individual non-withheld taxes were $29 billion, or 36%, lower than year-ago ‌levels, which were swelled by tax filing deadlines delayed for Californians affected by the 2025 wildfires.

After calendar-related adjustments made because benefit payments for November were shifted into October ⁠for ​both fiscal years, the ⁠Treasury said the adjusted deficit would have been $285 billion, an increase of $94 billion, ⁠or 49%, from the year-ago period. But the reported October outlays came to a ​record for that month of $773 billion, up $84 billion, or 12%, from ⁠year-ago levels. The outlay increases were driven in part by a $14 billion, or 80%, increase ⁠in ​US Department of Agriculture spending due to farm relief payments and a $28 billion, or 30%, increase in military spending, representing an October ⁠payment to military trust funds that was delayed by last year's government shutdown, along ⁠with increases ⁠spread across operations, maintenance and procurement.

Gross interest on the federal debt also rose $11 billion, or 11%, from the previous ‌October ‌to $115 billion.