: U.S. budget deficit shrinks to $217 billion in February as end of stimulus slows the growth in debt
The numbers: The U.S. posted a budget deficit of $217 billion in February vs. a shortfall of $311 billion in the same month last year, reflecting slower growth in government debt after the end of pandemic-induced federal stimulus.
Key details: Spending in February totaled $506 billion, down from $559 billion a year earlier, the Treasury Department said Thursday.
The amount of taxes collected rose to $290 billion from $248 billion a year ago
For the first five months of the current fiscal year, the deficit was $476 billion compared to $1.01 trillion last year.
The fiscal year began Oct. 1 and ends Sept. 30.
Big picture: The deficit is on track to fall sharply because of the end of the massive federal stimulus. The government spent trillions in 2020 and 2021 to prop up the economy during the worst of the pandemic, but most of the stimulus has faded.
The gross national debt recently surpassed $30 trillion for the first time.
Federal Reserve Chairman Jerome Powell has said that the U.S. budget outlook is unsustainable over the long run, but the deficit has been rising for years and there’s little sign Washington is willing to sharply reduce it.
Market reaction: The yield on the 10-year Treasury note
rose above 2% again after the latest inflation report. The cost of living in the U.S. has jumped 7.9% in the past year.
Higher yields on government debt will make borrowing more expensive.