Federal Budget Deficit Jumped in October
By Reuters | 25 Nov, 2025

Despite the long government shutdown and higher tariff revenues the budget deficit jumped 10% over 2024 due to shift of November benefits into October.

The U.S. government posted a higher $284 billion deficit for October in a report delayed and impacted by the recent federal government shutdown and which reflected record tariff revenues offset by a shift of some November benefit payments into last month's data, the Treasury Department said on Tuesday.

The budget results for the first month of the 2026 fiscal year were delayed by a 43-day shutdown of many federal agencies, which caused delays of some payments, such as for salaries of government employees, a Treasury official said.

The deficit last month was up $27 billion, or 10% higher, than the $257 billion deficit posted in October 2024, largely due to the shift of some $105 billion worth of November benefit outlays for some military and healthcare programs into October.

Adjusting for these shifts, the October deficit would have been about $180 billion, a 29% reduction from an October 2024 deficit of $252 billion.

Outlays for October including the November benefit payments totaled $689 billion, up 18% from the $584 billion in October 2024. The Treasury official said the department did not have a precise estimate of how much outlays were reduced by the shutdown-delayed payments, but that the department believed the reduction would be less than 5% of total outlays.

Federal law requires any unpaid salaries and other obligations during government shutdowns to be fully paid when funding is restored.

Receipts for October totaled $404 billion, a record for the month and a 24% increase from the $327 billion collected in October 2024.

The biggest revenue driver was net customs duties, which for October reached a new all-time monthly record of $31.4 billion, up from $29.7 billion in September and $7.3 billion in October 2024.

President Donald Trump said on Monday that tariff revenues would soon "skyrocket" to new records, arguing that businesses have largely depleted an inventory buildup of imported goods prior to his tariffs and would have to now import goods at higher tariff rates. His comments on the Truth Social site appeared to be aimed partly at the U.S. Supreme Court, where justices earlier this month cast doubt on the legality of tariffs Trump imposed under an emergency law.

"I look so much forward to the United States Supreme Court's decision on this urgent and time sensitive matter so that we can continue, in an uninterrupted manner to, MAKE AMERICA GREAT AGAIN!" Trump wrote.

Meanwhile, the Congressional Budget Office said last week that recent tariff reductions brought about by U.S. trade deals with partner economies had caused the agency to cut its estimate for how much Trump's tariffs would reduce U.S. budget deficits over the next decade by 25% to $3 trillion, including interest costs, from the $4 trillion the agency projected in August.

(Reporting by David Lawder; Editing by Paul Simao)