US budget deficit shrinks in August, year-to-date flat at $1.97 trillion

Sept 11 (Reuters) - The U.S. ‌federal budget deficit ​for ​August shrank to $167 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 $1.97 trillion, the U.S. Treasury said on ⁠Friday.

The budget gap for the 11 months through August exceeds the full-year fiscal 2025 deficit ‌of $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 August 1, 2026 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 $248 billion, up $7 billion from a ​year earlier, the Treasury said.

Unadjusted outlays in August fell by 24%, to $527 billion, and interest payments on the federal ​debt fell by $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 $143 billion, or 13%, from the same period a year earlier.

Unadjusted August receipts were up $16 billion, or 5%, to $360 billion. This included a $12.84 billion inflow of net customs ⁠receipts, the first uptick since April, after tariff refunds totaling $10.54 billion for the month, ​about a third of the July refunds total of $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 $292.5 ⁠billion in customs duties, even as ‌it has had to ​refund about $125.2 billion, resulting in a net inflow of $167.3 billion.

(Reporting by Ann Saphir; Additional reporting by David Lawder; Editing by ‌Andrea Ricci)

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