U.S. reports $249B budget deficit
Gap in November represents 30% increase from a year ago
The U.S. government reported a $249 billion monthly budget deficit in November, a 30% increase from a year ago.
“The [monthly budget deficit] is higher than people were expecting but it seems there were explainable reasons for it, so it’s not particularly surprising,” Mervin Jebaraj, director for the Center for Business and Economic Research at the University of Arkansas, said Monday.
Government spending increased in November by 6% or $28 billion, as outlays on education, health care and interest on the public debt rose.
“The interest on debt is higher this year than it was last year and it’s because the Federal Reserve has been raising rates this year,” Jebaraj said.
The Federal Reserve’s interest rate is currently between 3.75% and 4%, Jebaraj said.
The Education Department spending increased by $11 billion or 94% in November.
This increase in the government’s spending was due to changes to direct student loan programs and public service loan forgiveness, Reuters reported Monday.
The U.S. government’s revenue was 10% lower in November compared to a year prior, mainly because of an drop in individual withheld tax receipts, an increase in individual tax refunds and a decline in Federal Reserve earnings.
The U.S. government’s year-to-date budget deficit is $1.375 trillion; a number that has decreased every year since 2020, when the deficit hit an all-time record high of $3.131 trillion. The year-todate federal budget deficit is still significantly high, as that deficit in 2019 was $984 billion.
The rate of inflation hit a 40-year record high this year, Jebaraj said there were several contributing factors.
“…There was a global pandemic, one couldn’t possibly have expected the global economy to have hit pause for nearly two years and expect to not have any repercussions from that,” Jebaraj said.
“I think your reasons for high inflation were basically supply chain issues as a result of the pandemic, pent up demand; a lot of people were stuck at home and not able to do things. You saw a lot of travel-related inflation earlier this year and then you had housing inflation and interest rates were really low. People had money and they wanted to buy houses and that obviously pushed home prices up and that contributed to inflation.”
Jebaraj continued: “Then you had at the beginning of this year, the Russian invasion of Ukraine, and that pushed up gas prices, energy prices in general and food prices, both grains and fertilizer, so all of those different things combined to give us the high inflation that we saw earlier this summer, but that is trending downwards now as most of these things are abating.”
U.S. government revenues for fiscal year 2022 were $4.896 trillion and outlays were $6.272 trillion.
The U.S. government is currently running a $336 billion year-to-date budget deficit for fiscal year 2023, which began on Oct. 1.
Accumulating deficits add to the overall federal debt, which totaled nearly $31.3 trillion this week.
That figure includes more than $6.8 trillion the government owes itself, including about $2.9 trillion borrowed from the Social Security Trust Fund, according to Treasury Department reports.