The highest level of core inflation in nearly 30 years has been stoked by the record high budget deficit in the first eight months of the federal government’s fiscal year.
The budget deficit grew to $2.1 trillion by the end of May, the Department of Treasury said Thursday. A year ago, the budget deficit stood at $1.9 trillion.
For the first eight months of the 2021 fiscal year, receipts were up 29 percent while outlays rose 20 percent. The increase in receipts is largely because tax day was delayed until July last year and only until May this year.
Analysts expect that the fiscal deficit will set a new record this year, topping last year’s record $3 trillion deficit.
Because the government moved tax day until May 17th, the monthly deficit last month was substantially lower than it was a year ago. The government spent $132 billion