U.S. Budget Deficit falls in Fiscal Year 2024-25 as tariff revenues pick up
Despite the government shutdown the US Treasury has released budget data for September, the final month of the fiscal year. A monthly surplus of $197.95bn, up from $64.685bn in September 2024, has seen the fiscal year deficit at $1.775 trillion fall below the previous fiscal year’s $1.817 trillion.
The marginal $41.4bn narrowing in the fiscal year deficit is more than fully explained by a $97.9bn (almost $0.1 trillion) increase in customs revenues, with most of that increase coming in the second six months of the fiscal year. Monthly customs duties have stabilized around $30bn per month, compared with a trend of around $6.5bn per month in the preceding fiscal year. On an annualized basis this means around $360bn in customs duties, or $0.36 trillion, and increase of around $0.28 trillion from the prior trend.
The bounce in September’s surplus from a year ago was however led by a 25.2% yr/yr decline in spending, which is unlikely to persist, with revenues up a modest 3.2% despite strength in customs duties.