- The Treasury Department announced a record $1.9 trillion budget deficit in the first seven months of the fiscal year.
- This was accompanied by a 22% increase in outlays, or personal spending, to a record $4.1 trillion.
- Federal tax receipts of $2.1 trillion also hit a record for the seven-month period ending in April.
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The US Department of Treasury announced on Wednesday that the US ran a $1.9 trillion budget deficit in the first seven months of the fiscal year – a record for that time frame.
As the country continued to recover from the pandemic, federal spending contributed to the budget deficit which marked a 30% increase from a year earlier. The department also found that outlays, or personal spending, rose 22%, to a record $4.1 trillion, which can be attributed to the government’s stimulus checks and extended unemployment benefits to aid Americans during the pandemic.
In addition, federal tax receipts also hit a record for the seven-month period ending in April, rising 16% to $2.1 trillion.
As the country continues to reopen, the US economy is likely to see a boost as more jobs are added to the labor market and spending increases. However, last week’s jobs report fell significantly short of expectations, adding just 266,000 despite economists’ prediction of at least 1 million, causing some businesses and lawmakers to cast the blame on government aid, like extended $300 weekly unemployment benefits, which they say disincentivizes people from returning to work.
But President Joe Biden, and his administration, are confident in the economy’s recovery.
“I think as we continue to move forward here, hopefully in the coming months we are going to see lots of those Americans who are looking for jobs, finding jobs, and I’ll be able to stand in front of this camera and talk about the great gains we’ve had,” Labor Secretary Marty Walsh said last week. “But I still think 266,000 jobs this month is a good number.”