The numbers: The US budget deficit skyrocketed in March after the government approved a $ 1.9 trillion coronavirus bailout that included a $ 1,400 stimulus check for most Americans.
The budget gap more than doubled to $ 659.6 billion in March compared to February, the US Treasury Department said on Monday. This is the third highest monthly deficit ever recorded.
What happened: Federal spending rose to $ 927.2 billion last month, a figure that only exceeded the record increase in expenditures last spring when the pandemic began.
The government has spent hundreds of billions of dollars on stimulus expenditures, higher unemployment benefits and other social welfare policies to help Americans weather the pandemic. The most recent bill signed by President Joe Biden is the third federal bailout package since last year.
Meanwhile, tax revenue reached $ 267.6 billion in March. They were up 13% from the same month a year earlier, suggesting that the economy is continuing to recover.
The US deficit in the first six months of fiscal 2021 has now risen to 1.71 trillion USD. Before the pandemic hit in 2020, the United States had never had such a high annual deficit.
Last year’s budget deficit was a record 3 trillion dollars.
Big picture: The US is likely to have a huge deficit for at least the next few years as it deals with radioactive dust from the coronavirus pandemic. The White House in Biden plans to spend $ 2.3 trillion on infrastructure and other initiatives that will further increase national debt.
Market reaction: Dow Jones industrial average
and S&P 500
fell in trading on Monday.