March U.S. deficit shrinks, but virus budget storm seen in April

WASHINGTON (Reuters) – The March U.S. budget deficit shrank to $119 billion from $147 billion a year earlier as receipts grew and calendar shifts reduced outlays, but the data reflect only a minimal impact from massive coronavirus rescue spending, the U.S. Treasury said on Friday.

Large outlays from the $2.3 trillion coronavirus legislation passed on March 27 and reduced receipts due to higher unemployment and delayed tax returns should have a significant impact on April’s budget, a Treasury official said.

For the first six months of the 2020 fiscal year, the U.S. deficit rose 8{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to $744 billion from $691 billion a year earlier, with receipts up 6{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} and outlays up 7{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}.

In March, receipts totaled $237 billion, up 3{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} from a year earlier, while outlays fell 5{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to $356 billion. But significant March benefit payments were pushed into February, reducing outlays by $51 billion.

Accounting for calendar effects, March had an adjusted deficit of $170 billion compared with an adjusted deficit of $136 billion in March 2019. For the fiscal year, the adjusted deficit was $744 billion compared with $690 billion in the same period the prior year.