The numbers: The U.S. federal budget deficit widened to $248.5 billion in November, up from $191.3 billion in the same month last year, the Treasury Department said Monday.
For the first two months of the fiscal year, the deficit narrowed to $336.4 billion, down from $356.4 billion in the same period last year.
Key details: In November, government receipts fell while spending increased, the department said.
Receipts were down $29 billion to $252 billion from a year ago while outlays rose $28 billion to $501 billion.
Interest on the federal debt was $48 billion higher over the first two months of the fiscal year than from the same period a year earlier. The Federal Reserve’s rapid increase in interest rates is leading to higher interest payments.
Tax refunds were $12 billion higher over the same period as the Internal Revenue Service continued to work through a backlog of individual tax returns.
There were no remittances to the Treasury from the Fed in November after $8 billion was sent in the same month last year. Higher short-term interest rates have raised the U.S. central bank’s interest expenses above its income.
Big picture: The deficit fell sharply to $1.4 trillion in the 2022 fiscal year from $2.8 trillion in fiscal 2021. Outside experts that the reduction was due to shrinking or expiring COVID-19 relief. Economists think the deficit is likely to shrink slightly this year, but there is a risk that spending might jump if the economy slides into a recession.
Market reaction: The yield on the 10-year Treasury note
rose to 3.6% after a soft auction on Monday. Stocks were holding gains with the Dow Jones Industrial Average
up 306 points or 0.9%.