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Every month the U.S. Treasury releases data on the federal budget, including the current deficit. including the current deficit. The following contains budget data for January 2022, which was the fourth month of fiscal year (FY) 2022.
The budget ran a surplus of $119 billion in January 2022; an improvement of $282 billion from the deficit recorded in January 2021. This January, outlays were $201 billion lower than they were in the same month last year, and revenues were $80 billion higher.
In addition, outlays in both years were affected by shifts in the timing of federal payments. Without such timing shifts, the surplus in January 2022 would have been $95 billion and the deficit in January 2021 would have been $210 billion, or an adjusted improvement of $305 billion.
The cumulative deficit for the first four months of FY22 was $477 billion less than it was through the first three months of FY21, reflecting a $329 billion increase in revenues and a $148 billion decrease in outlays.
The growth in revenues stems primarily from higher total wages and salaries that resulted in increased withholding of individual income and payroll taxes. The decrease in outlays was driven by lower payments for unemployment insurance and the fact that there were no recovery rebates issued during the first four months of FY22.
Since the onset of the COVID-19 pandemic, debt held by the public has increased by about 35 percent. Once the situation has stabilized, policymakers should turn their focus to the country’s underlying fiscal situation.