The US Treasury Department announced that the federal budget deficit jumped 26% last November from a year ago to $314 billion. The ministry said that the deficit was a record for last November and the highest since last March and was due to the sharp increase in interest costs and other expenses.
Economists polled by Reuters had estimated that the deficit for the second month of the fiscal year would reach $301.05 billion.
It is noteworthy that the American fiscal year begins on the first of October of each year.
In detail, federal revenues rose last November by $23 billion to $275 billion, or 9% on an annual basis. As for expenditures, they jumped by $88 billion to $589 billion, an increase of 18% from a year ago, while interest payments on US government debt increased by $25 billion to $80 billion.
Debt service costs have increased since March 2022, when the Federal Reserve (US central bank) began sharply increasing borrowing costs to reduce inflation, raising the benchmark overnight federal funds rate by 5.25 percentage points.
