U.S. Markets

U.S. May budget deficit shrinks as revenues rise sharply, Treasury says

FILE PHOTO: The United States Department of the Treasury is seen in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kelly

WASHINGTON (Reuters) - The U.S. government posted a May deficit of $132 billion, about a third of the May 2020 deficit of $399 billion, as higher employment and an earlier tax deadline this year boosted receipts sharply, even as COVID-19 pandemic-related outlays grew, the U.S. Treasury said on Thursday.

Receipts for May rose 167% to $464 billion, an increase partly attributed to last year’s delay of the Internal Revenue Service income tax filing deadline until July 15. This year’s deadline shifted by a month to May 17.

The Treasury also said taxes withheld from wages increased by 20% to $204 billion during May compared to a year ago, while May corporate taxes rose to $18 billion from $2 billion last year.

Outlays for May increased 4% from a year earlier to $596 billion as benefits from President Joe Biden’s $1.9 trillion COVID-19 aid package continued to be paid out.

This spending also helped push the fiscal year-to-date deficit to a record $2.064 trillion from $1.88 trillion for the first eight months of the prior fiscal year, Treasury officials said.

Year-to-date receipts rose 29% from a year earlier to $2.607 trillion, while outlays grew 20% to $4.671 trillion.

Reporting by David Lawder; Editing by Andrea Ricci