U.S. posts smallest budget deficit in two years as employment rebounds

(Reuters) – The U.S. government posted a $21 billion budget deficit for December 2021, the smallest monthly gap in two years as individual income tax receipts surged with increased employment, the Treasury Department said on Wednesday.

© Reuters/Andrew Kelly
FILE PHOTO: Signage is seen at the United States Department of the Treasury headquarters in Washington, D.C.

The December deficit was 85% lower than the year-ago deficit of $144 billion, and was the smallest since a December 2019 deficit of $13 billion, just before the COVID-19 pandemic threw the global economy into a tailspin.

Load Error

December receipts grew 41% to a monthly record of $487 billion, while outlays grew 4% to a record $508 billion.

For the first three months of the 2022 fiscal year started Oct. 1 the federal deficit fell 34% from the prior year period to $378 billion, with receipts up 31% to a record $1.052 trillion and outlays up 4% to a record $1.430 trillion.

December’s results were driven by a 44% increase in individual withheld income and payroll taxes, while other individual tax payments rose 13% for the month.

A number of outlay categories were lower in December than a year ago, with Labor Department outlays — principally unemployment benefits — down 81% to $6 billion.

(Reporting By David Lawder; Editing by Andrea Ricci)