In December, the U.S. budget deficit rose by 67% year-over-year to $145 billion, setting a record high for the month but below the consensus estimate of $152.5 billion. In addition, December’s tariff revenue was $27.9 billion, the lowest amount since July and down from $30.75 billion in November and $31.35 billion in October.
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However, the U.S. Treasury noted that after accounting for adjustments, the December budget deficit would have fallen by 11% from a year ago to $112 billion. One of the adjustments accounted for the transfer of $32 billion of January benefit payments into December because the new year began on a weekend.
U.S. on Track for $2 Trillion Budget Deficit in FY2026
While tariff revenue has fallen in recent months, total customs duties for fiscal year 2026, which began on October 1, 2025, have increased by 333% from the comparable period last year as a result of the Trump administration’s tariffs.
Since the beginning of the fiscal year, the budget deficit has totaled $602 billion, down by 15% compared to the same period a year ago. The U.S. is on track to reach a deficit of nearly $2 trillion this fiscal year, according to Maya MacGuineas, president of the Committee for a Responsible Federal Budget. The deficit was $1.7 trillion in the 2025 calendar year, marking a three-year low.
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