US Federal Budget Deficit Reaches USD 1.97 Trillion in First 11 Months of Fiscal 2026

Monthly budget data released by the US Treasury show that the federal budget deficit totaled USD 1.96 trillion in the first 11 months of fiscal 2026, one of the highest levels on record; the same cumulative deficit is also stated as USD 1.97 trillion in the relevant data. On the former figure, the level is slightly below the USD 1.97 trillion recorded in the same period of 2025; on the latter, it is unchanged from the same period of 2025. For the month, the federal budget deficit in August 2026 was USD 166.8 billion, narrowing from the USD 432 billion deficit in July; the change is related to differences in the calendar between the two months. The final month of fiscal 2026 is September, which typically records a surplus because of corporate tax deadlines.

In August 2026, total federal government receipts were USD 360 billion, up from USD 344 billion a year earlier. Individual income tax receipts were USD 179 billion, accounting for half of total receipts for the month; social insurance and retirement-related receipts were USD 141 billion, making up the bulk of the remainder. On the spending side, total outlays in August 2026 were USD 527 billion, down from USD 6,891 billion a year earlier; part of the change is related to tariff-related calendar effects. Viewed together, receipts and spending trend lines have continued to diverge over the past six months, with spending growing faster than receipts.

Interest costs continued to rise. In August 2026, total federal government interest expense was USD 98 billion; with only one month left in fiscal 2026, total interest expense had reached USD 1.267 trillion, up 12% from a year earlier. Measured over the most recent 12 months, interest expense reached a record USD 1.4 trillion. As of the end of August 2026, the average rate on marketable US Treasury securities had risen to 3.48%, more than 2 percentage points higher than five years earlier. As previously issued low-yield bonds mature, the US Treasury must refinance at higher cost. About 23% of marketable US Treasury securities are currently short-term bills.