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U.S. budget gap narrows more than expected from a year earlier in October -Breaking

by Mike Robinson

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© Reuters. FILEPHOTO: This sign can be seen at the United States Department of the Treasury Headquarters in Washington, D.C., U.S.A, August 29, 2020. REUTERS/Andrew Kelly/File photo

(Reuters) – Wednesday’s U.S. budget deficit was $165 billion for October. That is 42% lower than last year’s $284 billion deficit. The rebounding economy saw personal income tax receipts rise.

According to Reuters, the October deficit fell by $14 billion from its median estimate of $179 billion among economists.

Federal government receipts in October’s first month were $284 billion. That is an increase of 19%. The individual tax revenue rose 18%, to $214 billion. Corporate taxes rose 39%, to $21 billion.

Officials at the Treasury said that the increase is due to an improvement in the economy since last year’s extensive shutdowns caused by COVID-19, which led to a sharp but brief recession. Individual taxes have increased while corporate earnings and business tax receipts are rising due to a rebound in employment.

Also, spending fell notably from last year, with $449 Billion in total expenditures, 14% lower than October 2020’s $522B. The biggest reason for the drop in Labor Department spending was the lower Medicare expenditures, which fell by $44 billion (or 44%).

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