(Washington) The public deficit widened and reached a new “record” between September and December in the United States, the Treasury Department reported Thursday, the country having collected less revenue and spent more, in particular because of repeated losses due to hurricanes.
Published yesterday at 2:30 p.m.
Over this period, the deficit reached $711 billion, up 39% year-on-year.
In the United States, the last quarter of 2024 is the first quarter of fiscal year 2025, which ends September 30, 2025.
This level of deficit represents “a record for the first three months of the fiscal year,” a department official commented to journalists.
It was fueled by also “record” spending: nearly $1,800 billion over three months, up 11% compared to the same period last year.
At the same time, revenues fell by 2%.
Among the spending items that have increased the most are those related to pensions as well as the health of low-income and elderly people (Medicare and Medicaid programs), as well as defense due to “increased activity and operations maintenance,” according to the head of the Treasury Department.
The federal government also spent more to deal with the damage from powerful and deadly hurricanes Helene et Miltonend of September and beginning of October.
Interest on the debt has further widened the deficit, while the rates at which the State borrows have soared.
These data are published a few days before Donald Trump’s return to the White House.
-The president-elect, who is due to take office on January 20, has reiterated his desire to continue reducing taxes while slashing federal government spending.
Energy prices push up the producer price index
U.S. wholesale inflation accelerated last month due to rising energy prices.
The Labor Department announced Tuesday that its producer price index, which tracks inflation before it reaches consumers, rose 0.2% last month from November, a slowdown after a increase of 0.4% the previous month. Compared to the previous year, producer prices increased by 3.3%, the largest increase since February 2023 and up from a 3% increase in November.
A 3.5% increase in energy prices from November to December, fueled by a 9.7% rise in gasoline prices, pushed the overall index higher. Food prices fell by 0.1% in December.
Still, the increases overall were slightly lower than economists had expected. US markets surged higher on the heels of new inflation data.
Excluding food and energy prices, so-called core wholesale inflation was unchanged from November, but up 3.5% from a year earlier.
The report on producer prices was released a day before the Labor Department’s report on consumer prices. Its consumer price index is expected to rise 0.3% from November and 2.8% from December 2023, according to a survey of forecasters by data firm FactSet.
Wholesale prices can offer a first glimpse of where consumer inflation might be headed. Economists are also watching it because some of its components, including health care and financial services, enter into the Federal Reserve’s preferred inflation gauge — the personal consumption expenditures index, or PCE.
Paul Wiseman, Associated Press
