US Opens Fiscal 2027 With Record October Deficit of $404 Billion

The United States opened fiscal 2027 with an October budget deficit of $404 billion, a record for the month, the Treasury Department said on Thursday, Nov 12, 2026. The deficit rose $120 billion, or 42 percent, from October a year earlier.

Bloomberg Law reported the same Treasury figures independently. Its report matched the deficit, the spending total and the receipts total published by Reuters, which gives readers two separate reports of the same official release to check against each other.

Receipts fell as customs collections dropped

October receipts fell $35 billion, or 9 percent, to $369 billion. Part of that drop came from customs. Net customs collections fell 39 percent to $19.2 billion, down from $31.3 billion in October 2025, when tariff revenues peaked.

That change matters for the shape of the month. A year ago, customs collections were at their peak and helped lift total receipts. This October, customs brought in $12.1 billion less than that peak month, while total receipts fell by $35 billion overall. The Treasury figures do not assign the full receipts drop to customs alone, and this report does not do so either. The numbers show customs as one clear part of a wider fall in money coming in.

Spending set an October record

October outlays were $773 billion, a record for the month. Spending rose $84 billion, or 12 percent, from a year earlier.

Put the two sides together and the gap is plain. The government took in $369 billion in October and spent $773 billion. The difference between those two totals is the $404 billion deficit for the month. Money coming in fell at the same time as money going out rose to a record, and the monthly gap widened from both directions.

A calendar shift flattered and distorted the headline

Part of the October jump came from timing, not from a change in policy or in the economy. November benefit payments were moved into October because November 1 fell on a weekend. That shift pushed spending that would normally count in November into the October books instead.

Adjusted for those calendar shifts, the deficit would have been $285 billion. Even on that adjusted basis, the gap was larger than a year earlier. The adjusted deficit rose $94 billion, or 49 percent, from the year ago adjusted figure. The calendar explains part of the record headline. It does not explain the whole increase.

Close to the CBO estimate, far from the stated goal

The Congressional Budget Office had put the October deficit at $409 billion in an estimate published on Nov 10, 2026. The Treasury total of $404 billion came in $5 billion below that estimate, so the official release landed close to what the budget office had expected.

The new fiscal year starts from a large base. Fiscal 2026 closed with a deficit of $1.992 trillion, about 6.2 percent of GDP. That share rose from 5.8 percent in fiscal 2025. Treasury Secretary Scott Bessent has set a goal of reducing the deficit to 3 percent of GDP. On the fiscal 2026 share, that goal would require the deficit share to fall by more than half from 6.2 percent.

One month does not set a full year. October is the first month of fiscal 2027, and its total was lifted by benefit payments moved forward from November. The adjusted figure, the fall in receipts and the record level of spending are the parts of this release that carry into the months ahead, because they describe the starting point for receipts, spending and customs collections in the new year.