U.S. Fiscal Year 2027 October Budget Deficit Hits Record $404 Billion

The U.S. Treasury Department reported a record $404 billion budget deficit for October in fiscal year 2027, marking an increase of $120 billion, or 42%, compared to the same period last year. This deficit arises against a backdrop of shrinking fiscal revenues and sharply rising expenditures. Treasury Secretary Scott Bansen faces fiscal challenges, aiming to reduce the deficit to 3% of GDP, while the budget gap for fiscal year 2026 is projected to account for 6.2% of GDP. In October 2026, fiscal revenues fell by $35 billion, a decrease of 9%, to $369 billion, partly due to a 39% drop in net customs duties to $19.2 billion. Non-withheld personal tax revenues decreased by $29 billion, or 36%, from $80 billion in the same period last year to $51 billion. Due to early welfare payments in November being moved to October, the Treasury stated that after calendar adjustments, the deficit should be $285 billion, an increase of $94 billion, or 49%, compared to the same period last year.

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