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US deficit grows by 26% to $ 984 billion in 2019, its highest in 7 years



The US Treasury said on Friday that the federal fiscal 2019 deficit was $ 984 billion, a 26% increase from 2018, but still short of the administration's mostly predicted $ 1 trillion mark.

The gap between revenue and expense was the widest in seven years, as defense spending, Medicare and interest payments on national debt had all but gone.

The government said corporate tax revenue was $ 230 billion, up 12%, thanks to a recovery in the second half of the year. Individual tax revenue rose 2% to $ 1.7 trillion.

Proceeds total $ 3.4 trillion, up 4% from September, while federal spending rose 8% to $ 4.4 trillion.

The US Government also collected nearly $ 71

billion in duties, ie. or tariffs, an increase of 70% over the previous year. As a percentage of US economic output, the deficit is 4.6%, 0.8 percentage points higher than the previous year.

"President Trump's economic agenda is working: The nation is experiencing the lowest unemployment rate in nearly 50 years, there are more jobs to fill than there are job seekers, and Americans are experiencing a steady increase in wages year over year," he said US Treasury Secretary Steven Mnuchin in a press release.

"In order to truly put America on a sustainable financial path, we must adopt proposals – similar to the President's 2020 budget plan – to reduce wasteful and irresponsible spending," he added.

Annual deficits have almost doubled in the tenure of President Donald Trump, despite the unemployment rate at multi-decade lows and better income numbers. The deficit usually shrinks during economic growth as higher Wall Street earnings and profits rely on Treasury bills, while the automatic cost of goods as food stamps decreases.

However, two large bipartisan spending bills, combined with a remarkable reduction in administration taxes, were disproved. typical trends and, instead, aggravated deficits. The Congressional Budget Bureau projects that the trillion-dollar deficit could come immediately after fiscal 2020.

Still, the Treasury report is likely to come as a relief to the Trump administration, which previously predicted that the deficit would reaches $ 1 trillion in fiscal 2019. The White House tried to cut a $ 1.5 trillion tax nearly two years ago when President Trump swore he would pay.

– CNBC's Ilan Mui contributed to this report.


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