The US government recorded a monthly budget deficit of $88 billion in October, the Treasury Department reported Thursday.
That’s 47% lower than the October 2021 deficit of $165 billion and just below economists’ expectations of $90 billion, according to consensus estimates on Refinitiv.
During October, which is the first month for the government’s 2023 fiscal year, unadjusted spending dropped 9% to $406 billion and revenues increased 12% to $319 billion.
When adjusting for calendar-related differences — notably $62 billion in federal benefit payments moved up to September because October 1 landed on a Saturday — the October deficit totaled $149 billion. That figure is a $7 billion improvement from the adjusted $157 billion deficit in October 2021, Treasury data shows.
“When comparing apples to apples, the deficits are just a tiny bit lower [than last year],” said Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget, a deficit watchdog. “We need to do a lot better than that.”
During fiscal year 2022, the US budget deficit was slashed in half, falling to under $1.4 trillion, amid a winding down of pandemic-related spending and a jump in revenue from the surging economic recovery.
While the shortfall was the smallest in three years, it remains historically high. In the 2019 fiscal year, the deficit totaled $980 billion.
America’s debt levels are remaining elevated at a time of historically high inflation and when interest rates are quickly ratcheting higher — making that borrowing even more expensive, he said, noting that interest payments were $43 billion in October, up from $30 billion a year before.
“This is just the tip of the iceberg, because interest rates are continuing to climb,” he said.