Lockheed Martin
The numbers: The U.S. government’s July budget deficit widened to $120 billion, the Treasury Department reported Monday. That’s up from a shortfall of $77 billion in the same month a year ago.
Adjusted for shifts in the timing of federal benefit payments and tax receipts, the deficit would have been $129 billion, Treasury said.
What happened: Both spending and receipts were up in July compared to a year ago. Spending rose 23% and was driven higher by increased outlays on defense, Social Security and Medicare.
Receipts rose 12%, as individual income and payroll taxes, as well as corporate taxes, climbed in the month.
Another source of revenue, customs duties, was up by 59% in July.
The big picture: The government’s budget gap has widened 27% compared to the first 10 months of fiscal 2018, as spending has risen 8% and receipts have grown by 3%. The federal fiscal year runs October through September.
The Trump administration recently forecast a $1 trillion full-year shortfall, while the Congressional Budget Office is slightly more conservative, putting it at $896 billion.
While customs duties have grown by 75% for the fiscal year to date, President Donald Trump’s trade fight with China has rattled stock markets SPX, -1.15%. Investors have piled into Treasurys, pushing the yield on the 10-year note TMUBMUSD10Y, -5.38% to 1.65% from as high as 3.23% in November. Trump has threatened to slap 10% tariffs on $300 billion of Chinese goods beginning Sept. 1.
Also see: Trade war is raising the risk of U.S. recession, Goldman Sachs warns.
Add Comment