WASHINGTON, D.C.: The U.S. federal budget deficit widened to a record $432 billion for the month of July as government spending increased and tariff revenues remained negative, pushing the fiscal 2026 deficit to $1.799 trillion with two months still remaining in the fiscal year.

The U.S. Treasury said on August 12 that the July deficit was $141 billion, or 48%, higher than in July 2025 and marked the largest monthly deficit since March 2021, when it reached $660 billion during the COVID-19 relief programs.

Treasury officials said the July figures were partly inflated by calendar shifts in benefit payments. Unadjusted government outlays reached a July record of $766 billion, up $137 billion, or 22%, from a year earlier. Outlays increased by $99 billion because many August 2026 benefit payments were made in July after the current month began on a weekend.

After accounting for those and other timing shifts, the adjusted July budget deficit totaled $333 billion, up $50 billion, or 18%, from the same month a year earlier, the Treasury said.

Unadjusted government receipts for July fell by $4 billion, or 1%, to $334 billion.

The Treasury said the month's figures included an $8.55 billion outflow in net customs receipts after tariff refunds totaling $33.38 billion.

For the first 10 months of fiscal 2026, which began on October 1, 2025, the unadjusted budget deficit reached $1.799 trillion. That was up $170 billion, or 10%, from the $1.629 trillion recorded during the same period a year earlier.

The year-to-date deficit has already exceeded the full fiscal 2025 deficit of $1.775 trillion, with two months still remaining in the current fiscal year.