This US fiscal picture isn’t improving but it might not be quite as bad as it looks.
The July deficit of $432 billion compared to last year’s level of $291 billion and exceeded the consensus estimate of $346 billion. The main problem is government spending as it hit a record for the month of July at $766 billion. That also put the deficit at the highest of any month since 2021.
Now some of the monthly numbers can skew because of how the days of the week (and pay periods) fall in any given month but the trajectory of US government debt is undeniable. The US deficit so far in this fiscal year is $1.799 trillion compared to $1.629 trillion a year earlier.
It might not be quite as dismal as it looks as tariff refunds were part of the story as net customs receipts were $8.55 billion in the month on $33.38 billion in refunds. Still, tariffs are coming nowhere close to plugging the holes in the US budget and the market continues to notice.
Today the US solid 10-year notes at the highest rate since the financial crisis. In related news, gold is up $41 to $4407 today.
This article was written by Adam Button at investinglive.com.