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US starts fiscal 2021 with 111% jump in October deficit

US starts fiscal 2021 with 111% jump in October deficit

A U.S. five dollar note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration

WASHINGTON: The US government started the 2021 fiscal year with an October budget deficit of US$284 billion, a record for the month, as coronavirus-related outlays spiked sharply from a year earlier and revenues declined, the Treasury Department said on Thursday.

The October deficit was 111 per cent higher than the October 2019 deficit of US$134 billion and 61 per cent higher than the previous October record of US$176 billion in 2009, during the financial crisis and recession.

It follows a record full-year deficit of US$3.132 trillion for fiscal 2020, which ended Sep 30, that more than tripled the previous year's shortfall due to COVID-19 aid spending.

Treasury officials said the 2020 deficit was held down partly by far lower outlays and stronger receipts in the early months of that fiscal year before the pandemic closed down large parts of the economy in March.

Revenues for October fell 3 per cent to US$238 billion, largely due to lower receipts withheld from paychecks resulting from reduced employment levels and a temporary deferment of Medicare and Social Security taxes ordered by President Donald Trump, a Treasury official said.

Outlays for the month increased 37 per cent to US$522 billion, which included large increases for health care, food assistance and unemployment compensation and other coronavirus aid programs.

Source: Reuters

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