FX.co ★ US Budget Deficit Narrows in August

The US government recorded a budget deficit of $167 billion in August 2026, a sharp improvement from the $345 billion shortfall in the same month a year earlier and significantly better than the projected $404 billion gap.

Total federal outlays declined to $527 billion from $689 billion. The largest spending categories were Social Security ($141 billion), net interest ($86 billion), health programs ($81 billion), and national defense ($72 billion).

Federal receipts increased to $360 billion from $344 billion, driven mainly by individual income taxes ($179 billion) and social insurance and retirement contributions ($141 billion).

For the fiscal year 2026 to date, the cumulative deficit stood at $1.966 trillion through August.