WASHINGTON: The US government posted a higher USD284 billion deficit for October in a report delayed and impacted by the recent federal government shutdown and which reflected record tariff revenues offset by a shift of some November benefit payments into last month’s data, the Treasury Department said on Tuesday.
The budget results for the first month of the 2026 fiscal year were delayed by a 43-day shutdown of many federal agencies, which caused delays of some payments, such as for salaries of government employees, a Treasury official said.
The budget results for the first month of the 2026 fiscal year were delayed by a 43-day shutdown of many federal agencies, which caused delays of some payments, such as for salaries of government employees, a Treasury official said.
The deficit last month was up $27 billion, or 10%, from the $257 billion deficit posted in October 2024, largely due to the shift of some $105 billion worth of November benefit outlays for some military and healthcare programs into October.
Adjusting for these shifts, the October deficit would have been about $180 billion, a 29% reduction from an adjusted October 2024 deficit of $252 billion.
Outlays for October, including the November benefit payments, totaled $689 billion, up 18% from the $584 billion in October 2024. The Treasury official said the department did not have a precise estimate of how much outlays were reduced by the shutdown-delayed payments from various agencies, but that the Treasury believed the reduction was less than 5% of total outlays.
Federal law requires any unpaid salaries and other obligations during government shutdowns to be fully paid when funding is restored.
Receipts for October totaled $404 billion, a record for the month and a 24% increase from the $327 billion collected in October 2024.
Tariff revenues hit record monthly high
Net custom duties were among the biggest revenue drivers in October, reaching a new all-time monthly record of $31.4 billion because of new import tariffs imposed by President Donald Trump since he returned to the White House in January. This inflow beat the previous record of $29.7 billion in September and is more than four times the $7.3 billion recorded in October 2024.
Trump said on Monday that tariff revenues would soon “skyrocket” to new records, arguing that businesses have largely depleted an inventory buildup of imported goods prior to his tariffs and would have to now import goods at higher rates. His comments on the Truth Social site appeared to be aimed partly at the U.S. Supreme Court, where justices earlier this month cast doubt on the legality of tariffs Trump imposed under an emergency law.
“I look so much forward to the United States Supreme Court’s decision on this urgent and time sensitive matter so that we can continue, in an uninterrupted manner to, MAKE AMERICA GREAT AGAIN!” Trump wrote.
Meanwhile, the Congressional Budget Office said last week that recent tariff reductions brought about by U.S. trade deals with partner economies had caused the agency to cut its estimate for how much Trump’s tariffs would reduce U.S. budget deficits over the next decade by 25% to $3 trillion, including interest costs, from the $4 trillion the agency projected in August.
Also driving revenues higher was the $80 billion in non-withheld tax receipts for individuals received in October, which was an increase of $35 billion, or about 75%, from October 2024. The Treasury official said this increase largely reflected payments delayed by wildfires in California, where affected residents were allowed until October 15 to file and pay taxes.
Withheld individual income tax receipts rose $16 billion, or 6%, from the year-ago period to $279 billion. But October corporate tax receipts were flat at $18 billion, and the Treasury official attributed the lack of growth to corporate tax breaks contained in the Republican-passed tax-cut and spending bill enacted this year.
The U.S. Treasury’s interest costs hit $104 billion in October, up $22 billion, or 27%, from October 2024, reflecting a higher debt load and slightly higher weighted average interest rate of 3.36%, the Treasury official said.
