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Photographer: Al Drago/Bloomberg Photographer: Al Drago/Bloomberg

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The U.S. budget deficit widened in October, the first month of the fiscal year, as government spending increased and receipts declined.

The shortfall grew about $34 billion, or almost 34%, from the same month last year, to $134.5 billion, the Treasury Department’s monthly budget statement showed Wednesday. The median projection in a Bloomberg survey of economists called for a $130 billion deficit. Income fell 2.8% in October from a year earlier, while spending increased 7.6%.

The deficit was the biggest October shortfall since 2015. The latest figure follows a budget gap that approached $1 trillion in fiscal 2019 as annual spending grew twice as fast as government receipts, underscoring concern that President Donald Trump’s budget plans will lead to an acceleration in the national debt.

In testimony to Congress earlier Wednesday, Federal Reserve Chairman Jerome Powell said that “the federal budget is on an unsustainable path” that ultimately could limit lawmakers’ ability to support the economy in a downturn. During the question-and-answer period before the Joint Economic Committee, Powell said lawmakers can’t ignore deficits and that it’s important for the economy to grow faster than debt.

The non-partisan Congressional Budget Office last week estimated an October deficit of $133 billion. The Treasury forecasts the federal deficit will top $1 trillion in the current and 2021 fiscal years. That would be about 5% of total economic output, according to the CBO.

The October budget statement also showed customs duties boosted revenue by $7.8 billion, up from $5.6 billion a year ago. That includes tariffs U.S. companies paid on imports of Chinese merchandise, though it accounts for a relatively small share of total receipts.