US March deficit shrinks as outlays fall, tax receipts rise

By Thomson Reuters Apr 10, 2024 | 1:14 PM

(Reuters) – The U.S. federal budget deficit shrank in March from a year earlier as outlays dropped and receipts rose with the annual tax-filing season well underway, the U.S. Treasury Department said on Wednesday.

The deficit last month was $236 billion, down 38% from the $378 billion shortfall in March 2023. Outlays fell 18% to $569 billion, in part because this year there were no large bank failures requiring government aid, Treasury officials said. The decline in March outlays compared to the prior year was also driven by a drop from last year’s Department of Education expenses. Receipts rose 6% to $332 billion.

Economists polled by Reuters had expected a deficit of $197.5 billion in March.

For the first six months of the fiscal year, the deficit shrank by $36 billion, or 3%, to $1.065 billion. Receipts were up 7% to $2.188 trillion, a record according to Treasury officials, and outlays rose 3% to $3.253 trillion.

Interest costs on the national debt continue to be a big driver of government outlays, rising 36% year to date to $522 billion, second only to Social Security in individual line item expenses. For March alone debt-servicing costs were $89 billion, up 14% from a year earlier.

The weighted-average interest rate on Treasury securities during the month rose to 3.22%, 65 basis points higher than last year.

Individual tax refunds, which are deducted from receipts, were $11 billion lower, down 16% from 12 months earlier. Individual withheld receipts in March were up $8 billion, or 2%, from a year earlier.

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)