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U.S. budget deficit up 42% in October; tariff revenue dips 39%
Report shows Treasury estimates U.S. budget gap will increase slightly this year to roughly $2.2 trillion
(Aaron Schwartz/Bloomberg)
Key Takeaways:
- The U.S. budget gap widened to $404 billion in October, up 42% from the same period a year earlier.
- Tariff revenue fell roughly 39% from the same month in 2025 to $19.2 billion.
- Bigger tariff and corporate tax refunds compared with October 2025 weighed on tax receipts, though tariff refunds have slowed since the summer.
The U.S. budget gap widened to $404 billion in October, up 42% from the same period a year earlier, Treasury Department data showed Nov. 12.
In the first month of the fiscal year, which began Oct. 1, government spending rose 12%, to $773 billion, and tax receipts fell 9%, to $369 billion. Tariff revenue fell roughly 39% from the same month in 2025 to $19.2 billion.
Higher spending on the military, healthcare and interest on the debt pushed up government outlays last month. Bigger tariff and corporate tax refunds compared with October 2025 weighed on tax receipts, though tariff refunds have slowed since the summer.
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The report showed the Treasury estimates the U.S. budget gap will increase slightly this year to roughly $2.2 trillion.
The government recorded a $1.99 trillion shortfall in the latest fiscal year, as spending far outpaced federal tax collection and rising interest rates sent government debt costs soaring. That pushed the annual deficit to roughly 6% of gross domestic product.
