U.S. budget deficit widens to a record $432 billion in July due to higher outlays and negative tariff receipts.

The U.S. federal budget deficit for July 2026 reached a record $432 billion, driven by increased government spending and negative tariff revenues. This pushed the fiscal year-to-date budget gap to $1.799 trillion, surpassing the entire deficit of the previous fiscal year with two months remaining. Calendar shifts in benefit payments contributed $99 billion to July's outlays, which were a record for the month at $766 billion. Unadjusted July receipts decreased by $4 billion, or 1%, to $334 billion, including an $8.55 billion outflow in net customs receipts after $33.38 billion in tariff refunds, marking the third consecutive month of tariff outflows.