(Sept 12): The US federal budget deficit for August shrank to US$167 billion (RM680 billion) due largely to some calendar shifts in benefit payments rather than any underlying trend, leaving the fiscal-year-to-date budget gap essentially flat at US$1.97 trillion, the US Treasury said on Friday.

The budget gap for the 11 months through August exceeds the full-year fiscal 2025 deficit of US$1.775 trillion. For August alone the budget gap was down 52% from a year earlier, but that was largely due to the fact that Aug 1 was a Saturday, meaning that Medicare and social security payments normally paid on the first of the month were made instead in July.

Adjusting for those items, among the largest chunks of federal outlays, the month's deficit was US$248 billion, up US$7 billion from a year earlier, the Treasury said.

Unadjusted outlays in August fell by 24%, to US$527 billion, and interest payments on the federal debt fell by US$14 billion. A Treasury official said the drop was due to changes in inflation accruals, and pointed to the fiscal year-to-date data showing an increase of US$143 billion, or 13%, from the same period a year earlier.

Unadjusted August receipts were up US$16 billion, or 5%, to US$360 billion. This included a US$12.84 billion inflow of net customs receipts, the first uptick since April, after tariff refunds totalling US$10.54 billion for the month, about a third of the July refunds total of US$33.38 billion.

In February, the Supreme Court ruled the Trump administration did not have the legal authority to collect tariffs under the International Emergency Economic Powers Act as it had been doing for nearly a year. The Trump administration moved promptly to impose levies under other authorities. Year to date, the Treasury has collected US$292.5 billion in customs duties, even as it has had to refund about US$125.2 billion, resulting in a net inflow of US$167.3 billion.

Uploaded by Tham Yek Lee