FX.co ★ US Budget Gap Shrinks in January

The US federal government posted a budget deficit of $94.6 billion in January 2026, narrowing from a $128.6 billion shortfall in January 2025. Total receipts increased 9.1% year on year to $559.9 billion, supported primarily by individual income taxes ($317.30 billion), social insurance and retirement contributions ($169.80 billion), and customs duties ($27.74 billion). This rise was partly driven by seasonal factors and the timing of collections, which boosted tax and customs revenues during the month. On the spending side, outlays grew 2.0% from a year earlier to $654.6 billion. The largest expenditure categories were Social Security ($143.55 billion), Health and Medicare ($217.09 billion), and national defense ($70.75 billion), while the timing of several payments—especially for Medicare and veterans’ benefits—also affected the monthly figures.