FX.co ★ US Budget Deficit Narrows in May

The US government posted a budget deficit of $293 billion in May 2026, narrowing from a $316 billion shortfall in the same month a year earlier but exceeding market expectations of a $275 billion gap.

Total federal outlays fell to $628 billion from $687 billion a year before. The largest spending categories were Social Security at $140 billion, net interest payments at $107 billion, Medicare at $87 billion, and other health programs at $82 billion.

Federal receipts declined to $335 billion from $371 billion. The main revenue sources were social insurance and retirement contributions totaling $157 billion, individual income taxes at $152 billion, and corporate income taxes at $11 billion.

Over the first eight months of fiscal year 2026, the cumulative federal budget deficit reached $1.25 trillion.