The US Treasury Department announced on the 12th that the July fiscal balance showed a deficit of $432 billion, the largest ever for that month. Higher spending and a wider negative swing in tariff revenue weighed on the result, and the cumulative fiscal deficit for fiscal 2026 has already exceeded the full-year deficit for fiscal 2025 with two months still remaining in the fiscal year. The July deficit was partly inflated by a calendar shift in benefit payments, widening 48 percent, or $141 billion, from a year earlier. It was the largest monthly deficit since March 2021, when it reached $660 billion due to COVID-19 measures. On an adjusted basis excluding calendar effects, the July deficit rose 18 percent, or $50 billion, from a year earlier to $333 billion. Unadjusted spending rose 22 percent, or $137 billion, from a year earlier to $766 billion, the largest ever for that month. However, because the start of August 2026 fell on a weekend, most August benefit payments were made early in July, boosting spending by $99 billion. Unadjusted revenue fell 1 percent, or $4 billion, to $334 billion. Total tariff refunds in July reached $33.38 billion, and net tariff revenue for the month was negative $8.55 billion, which weighed on the result. The unadjusted cumulative fiscal deficit for fiscal 2026, which runs from October 2025 to September 2026, reached $1.799 trillion through July, up $170 billion, or 10 percent, from $1.629 trillion in the same period a year earlier, and with two months left in the fiscal year it has already exceeded the full-year fiscal 2025 deficit of $1.775 trillion.
