Markets

March US deficit shrinks, but virus budget storm seen in April

Key Points
  • Large outlays from the $2.3 trillion coronavirus legislation passed on March 27 and reduced receipts due to higher unemployment and delayed tax returns should have a significant impact on April's budget, a Treasury official said.
  • For the first six months of the 2020 fiscal year, the U.S. deficit rose 8% to $744 billion from $691 billion a year earlier, with receipts up 6% and outlays up 7%.
US Treasury Secretary Steven Mnuchin speaks during the daily briefing on the novel coronavirus, COVID-19, at the White House on March 25, 2020, in Washington, DC.
Mandel Ngan | AFP | Getty Images

The March U.S. budget deficit shrank to $119 billion from $147 billion a year earlier as receipts grew and calendar shifts reduced outlays, but the data reflect only a minimal impact from massive coronavirus rescue spending, the U.S. Treasury said on Friday.

Large outlays from the $2.3 trillion coronavirus legislation passed on March 27 and reduced receipts due to higher unemployment and delayed tax returns should have a significant impact on April's budget, a Treasury official said.

For the first six months of the 2020 fiscal year, the U.S. deficit rose 8% to $744 billion from $691 billion a year earlier, with receipts up 6% and outlays up 7%.

In March, receipts totaled $237 billion, up 3% from a year earlier, while outlays fell 5% to $356 billion. But significant March benefit payments were pushed into February, reducing outlays by $51 billion.

Accounting for calendar effects, March had an adjusted deficit of $170 billion compared with an adjusted deficit of $136 billion in March 2019. For the fiscal year, the adjusted deficit was $744 billion compared with $690 billion in the same period the prior year.

VIDEO6:0506:05
O'Leary: We need more than $350 billion for small business