U.S. Deficit Exceeds $1 Trillion Through February but Remains Below Last Year’s Level

• The U.S. budget deficit surpassed $1Tn for the fiscal year through February 2026. However, it was sharply lower than the same period a year earlier, Treasury Department data showed Wednesday, reflecting a combination of rising government revenues and relatively controlled spending.
• Outlays exceeded receipts by $308Bn in February, roughly in line with the deficit recorded in the same month a year ago, signalling that monthly spending and revenue patterns remain consistent despite broader fiscal pressures.
• For the fiscal year to date, the deficit totalled $1.004Tn, about 12% lower than the comparable period in 2025, as government revenues rose faster than spending, highlighting the impact of increased collections and economic activity on narrowing the fiscal gap.
• Helping narrow the gap was a sharp increase in tariff collections. Customs duties totalled $151 Bn through the first five months of the fiscal year, up about $113 Bn, or 294%, from a year earlier, underscoring the significant contribution of international trade measures to federal revenues.
• Corporate tax revenue also declined sharply, falling $27Bn, or 17%, from a year earlier, and elevated interest rates continued to weigh on the federal fiscal picture, with net interest payments on the nearly $39Tn national debt totalling $79Bn in February, making it one of the largest single components of federal outlays alongside Social Security, income security, and health care programs.

(Source: CNBC)