US deficit rises 39% year-on-year to $711 billion in Q1 FY2025

The U.S. government recorded an $87 billion budget deficit in December 2024, partially reduced by a $51 billion shift of benefit payments into November, according to the Treasury Department’s report on Tuesday.

The December shortfall contributed to a record $711 billion deficit for the first quarter of fiscal year 2025, a 39% increase from $510 billion in the same period last year.

Outlays surged while revenues declined slightly, driving the sharp rise in the deficit. Receipts in December increased by 6% to $454 billion, while reported expenditures fell 3% to $541 billion, aided by the calendar adjustment.

The report, the final one before President-elect Donald Trump assumes office next week, highlights a growing fiscal imbalance as spending pressures outpace revenue growth. The October-December 2024 deficit exceeded prior levels, reflecting continued fiscal challenges for the incoming administration.