The U.S. federal budget deficit rose to a record $1.9 trillion in the first seven months of the fiscal year, the Treasury Department said Wednesday.
That is 30 percent above the $1.5 trillion deficit recorded in the first seven months of the previous fiscal year.
The monthly budget deficit—which measures the excess of federal spending over revenues from taxes, fines, and fees—was $226 billion in April. That a decline from the $738 billion in April of 2020, when the deficit ballooned as the government scrambled to keep the economy afloat as the pandemic and lockdowns hit.
Receipts during the first seven months of the fiscal year, which concludes September 30, were up 16 percent compared with the period in the prior year. But this was more than offset by a 22 percent rise in spending.
Last year’s budget deficit widened to a record $3 trillion. The Committee for a Responsible Federal Budget estimates the deficit will jump to $3.4 trillion this year.
So much deficit spending has the potential to push inflation up. On Wednesday, the Department of Labor said that core inflation had jumped at its fastest pace since 1981.