Gallatin
© Bloomberg
A statue of Albert Gallatin, former U.S. Treasury secretary, stands outside the U.S. Treasury building in Washington, D.C.
Federal spending totaled $980 billion in April as government rushed assistance to those hurt by the economy's shutdown to fight the coronavirus A statue of Albert Gallatin, former U.S. Treasury secretary, stands outside the U.S. Treasury building in Washington, D.C. Bloomberg

The numbers

The federal government ran a budget deficit of $737.9 billion in April, up from $160 billion in the same month last year, the U.S. Treasury Department said Tuesday. This brought the fiscal year-to-date deficit to $1.48 billion up from $530.9 billion in the same period last year. The deficit in April was in line with estimates from the Congressional Budget Office.

What happened

Government spending for April was $979.7 billion. That's an increase of $604 billion over April 2019. Economic impact payments to consumers were $217 billion last month. States and local governments received $142 billion. Unemployment benefits totaled $46 billion.

Revenues totaled $241.9 billion in April. That's $294 billion lower than April 2019 as the government pushed out tax deadlines until July.

Big picture

The government is expected to record a $3.7 trillion deficit this fiscal year, according to CBO projections, released late last month. The widening of the fiscal deficit comes as the lockdowns of business and personal activity to slow the spread of the coronvirus pandemic hit economic growth, forcing Congress to rush to offer relief to consumers and firms.

Market reaction

The yield on the 10-year Treasury note TMUBMUSD10Y, 0.670% fell 3 basis points to 0.680%. Yields have moved a bit higher after the government announced plans last week to borrow $3 trillion in three months to pay for the relief efforts. Low interest rates will keep down the cost of this borrowing.