US Budget deficit hits US$284 billion in October; report impacted by shutdown
Net customs duties hit a record US$31.4 billion, driven by newly imposed import tariffs
[WASHINGTON] The US government posted a higher US$284 billion deficit for October, in a report delayed and impacted by the recent federal government shutdown and reflecting record tariff revenues offset by a shift of some November benefit payments into last month’s data, the Treasury Department said on Tuesday (Nov 25).
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 US$27 billion, or 10 per cent, from the US$257 billion deficit posted in October 2024. This was largely due to the shift of some US$105 billion worth of November benefit outlays for some military and healthcare programmes into October.
Adjusting for these shifts, the October deficit would have been about US$180 billion, a 29 per cent reduction from an adjusted deficit of US$252 billion in the year-ago period.
Outlays for October, including the November benefit payments, totalled US$689 billion, up 18 per cent from the US$584 billion in October 2024.
The Treasury official said the department did not have a precise estimate of how much outlays were reduced by shutdown-delayed payments from various agencies, but that the Treasury believed the reduction was less than 5 per cent 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 totalled US$404 billion, a record for the month and a 24 per cent increase from the US$327 billion collected the year before.
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 US$31.4 billion, because of new import tariffs imposed by President Donald Trump since he returned to the White House in January.
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This inflow beat the previous record of US$29.7 billion in September, and is more than four times the US$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 build-up 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 US 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 US 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 US trade deals with partner economies had caused the agency to cut its estimate for how much Trump’s tariffs would reduce US Budget deficits over the next decade by 25 per cent to US$3 trillion, including interest costs, from the US$4 trillion the agency projected in August.
Also driving revenues higher was the US$80 billion in non-withheld tax receipts for individuals received in October, which was an increase of US$35 billion, or about 75 per cent, from a year earlier.
The Treasury official said this increase largely reflected payments delayed by wildfires in California, where affected residents were allowed until Oct 15 to file and pay taxes.
Withheld individual income tax receipts rose US$16 billion, or 6 per cent, from the year-ago period to US$279 billion. But October corporate tax receipts were flat at US$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 US Treasury’s interest costs hit US$104 billion in October, up US$22 billion, or 27 per cent, from the same period last year, reflecting a higher debt load and slightly higher weighted average interest rate of 3.36 per cent, the Treasury official said. REUTERS
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