U.S. runs $404B budget deficit in October, biggest on record for start of fiscal year
The U.S. government lodged a $404B budget deficit in October, the largest ever recorded for the first month of a fiscal year.
The deficit is the amount by which federal spending exceeds taxes and other receipts, and the Treasury covers it by borrowing. October's gap was 42% wider than a year earlier, when it came to $284B.
Part of the jump is timing. In both years, November benefit payments went out in October because Nov. 1 fell on a weekend. Without that shift, the Treasury puts the deficit at $285B, up 49% from a year earlier.
Receipts fell 9% to $369B, the Treasury's Monthly Treasury Statement shows.
Outlays rose 12% to $773B, the most for any October.
The biggest changes from last October:
- Customs duties: $19B, down from $31B.
- Individual taxes not withheld from paychecks: down $29B, or 36%. Last year's total was lifted by later filing deadlines for Californians hit by the 2025 wildfires.
- Military spending: up $28B, or 30%, partly a payment into military trust funds that last year's government shutdown held up.
- Agriculture Department spending: up $14B, or 80%, on aid to farmers.
- Interest on the federal debt: up 11% to $115B.
October opens the 2027 fiscal year. The 2026 fiscal year, which ended in September, closed with a deficit of $1.99T.
The Treasury reports November's figures in December.
Sources & Further Reading
- "US starts 2027 fiscal year with record October budget deficit of $404 billion." Reuters. November 12, 2026.
- "Monthly Treasury Statement (MTS)." U.S. Department of the Treasury, Bureau of the Fiscal Service. November 12, 2026.
This article was drafted with the help of AI. Gabe Dunsmith fact-checked, edited and published the article and is responsible for its accuracy and quality. How we use AI
