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October deficit impacted by shutdown, shifted benefit

payments

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Record customs duties drive October revenue increase

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Trump says tariff revenues to 'skyrocket

By David Lawder

Nov 25 (Reuters) - The U.S. government posted a higher

$284 billion deficit for October in a report delayed and

impacted by the recent federal government shutdown and which

reflected record tariff revenues offset by a shift of some

November benefit payments into last month's data, the Treasury

Department said on Tuesday.

The budget results for the first month of the 2026 fiscal

year were delayed by a 43-day shutdown of many federal agencies,

which caused delays of some payments, such as for salaries of

government employees, a Treasury official said.

The deficit last month was up $27 billion, or 10% higher,

than the $257 billion deficit posted in October 2024, largely

due to the shift of some $105 billion worth of November benefit

outlays for some military and healthcare programs into October.

Adjusting for these shifts, the October deficit would have

been about $180 billion, a 29% reduction from an October 2024

deficit of $252 billion.

Outlays for October including the November benefit payments

totaled $689 billion, up 18% from the $584 billion in October

2024. The Treasury official said the department did not have a

precise estimate of how much outlays were reduced by the

shutdown-delayed payments, but that the department believed the

reduction would be less than 5% of total outlays.

Federal law requires any unpaid salaries and other

obligations during government shutdowns to be fully paid when

funding is restored.

Receipts for October totaled $404 billion, a record for the

month and a 24% increase from the $327 billion collected in

October 2024.

The biggest revenue driver was net customs duties, which for

October reached a new all-time monthly record of $31.4 billion,

up from $29.7 billion in September and $7.3 billion in October

2024.

President Donald Trump said on Monday that tariff revenues would

soon "skyrocket" to new records, arguing that businesses have

largely depleted an inventory buildup of imported goods prior to

his tariffs and would have to now import goods at higher tariff

rates. His comments on the Truth Social site appeared to be

aimed partly at the U.S. Supreme Court, where justices earlier

this month cast doubt on the legality of tariffs Trump imposed

under an emergency law.

"I look so much forward to the United States Supreme Court's

decision on this urgent and time sensitive matter so that we can

continue, in an uninterrupted manner to, MAKE AMERICA GREAT

AGAIN!" Trump wrote.

Meanwhile, the Congressional Budget Office said last week that

recent tariff reductions brought about by U.S. trade deals with

partner economies had caused the agency to cut its estimate for

how much Trump's tariffs would reduce U.S. budget deficits over

the next decade by 25% to $3 trillion, including interest costs,

from the $4 trillion the agency projected in August.