The US budget deficit has expanded significantly in the beginning of the fiscal year due to increased spending on health and defense. In October, the deficit reached $121 billion after adjusting for calendar differences, which is an 89% increase compared to the same month last year.

This increase in the deficit is attributed to a rise in health-related expenditures and a notable increase in defense spending, while the growth in debt-interest costs has slowed down. When considering the effects of deferred tax revenue from 2023, the deficit increase is reported at 22%. These figures highlight the ongoing fiscal challenges faced by the government as it deals with rising costs in key sectors.

This has raised concerns among economists and policymakers about the sustainability of current spending levels.