US August budget deficit narrows 52 percent to $167B

The US federal budget deficit narrowed by 52 percent year-on-year to $167 billion in August, according to the US Department of the Treasury, coming in below market expectations that had anticipated a gap of $221 billion.

Monthly revenue and spending

Federal government revenues rose 5 percent from August 2025 to reach $360 billion during the month. Government outlays fell sharply over the same period, as federal expenditures dropped 24 percent year-on-year to $527 billion.

The monthly shortfall stood at $345 billion in August 2025. Spending reached $527 billion.

Fiscal year totals

Over the first 11 months of fiscal year 2026, which began on October 1, 2025 and ends on September 30, 2026, the cumulative federal budget deficit reached $1.97 trillion. The 11-month budget deficit in fiscal year 2025 was at the same level as in fiscal year 2026.

Total federal revenues climbed 3 percent year-on-year across the 11-month period to $4.85 trillion, while federal expenditures expanded 2 percent to reach $6.81 trillion. Receipts totaled $4.85 trillion.

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Source: US Treasury