Sept 11 (Reuters) – The U.S. federal budget deficit for August shrank to $167 billion due largely to some calendar shifts in benefit payments rather than any underlying trend, leaving the fiscal-year-to-date budget gap essentially flat at $1.97 trillion, the U.S. Treasury said on Friday.
The budget gap for the 11 months through August exceeds the full-year fiscal 2025 deficit of $1.775 trillion. For August alone the budget gap was down 52% from a year earlier, but that was largely due to the fact that August 1, 2026 was a Saturday, meaning that Medicare and social security payments normally paid on the first of the month were made instead in July.
Adjusting for those items, among the largest chunks of federal outlays, the month’s deficit was $248 billion, up $7 billion from a year earlier, the Treasury said.
Unadjusted outlays in August fell by 24%, to $527 billion, and interest payments on the federal debt fell by $14 billion. A Treasury official said the drop was due to changes in inflation accruals, and pointed to the fiscal year-to-date data showing an increase of $143 billion, or 13%, from the same period a year earlier.
Unadjusted August receipts were up $16 billion, or 5%, to $360 billion. This included a $12.84 billion inflow of net customs receipts, the first uptick since April, after tariff refunds totaling $10.54 billion for the month, about a third of the July refunds total of $33.38 billion.
In February, the Supreme Court ruled the Trump administration did not have the legal authority to collect tariffs under the International Emergency Economic Powers Act as it had been doing for nearly a year. The Trump administration moved promptly to impose levies under other authorities. Year to date, the Treasury has collected $292.5 billion in customs duties, even as it has had to refund about $125.2 billion, resulting in a net inflow of $167.3 billion.
(Reporting by Ann Saphir; Additional reporting by David Lawder; Editing by Andrea Ricci)
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