The numbers: The U.S. federal budget deficit narrowed sharply to $192.7 billion in March, down from $659.6 billion in the same month last year, the Treasury Department said Tuesday.
Last March, the government was still sending out payments to Americans under the final stimulus package during the pandemic.
Key details: For the first six months of the fiscal year, the deficit was $668 billion, down roughly 40% from $1.706 trillion in the same period last year.
Government receipts totaled $315.2 billion in March, the highest for any March on record.
Big picture: Economists at Contingent Macro see the deficit for the entire fiscal year falling to $1.8 trillion, down from $2.8 trillion in the prior year.
The waning fiscal stimulus will be a drag on GDP growth this year, economists say. With the Federal Reserve set of on raising its benchmark interest rate “expeditiously,” there is some concern economic growth could even slow below a 1% annual rate this year or even tilt into recession.
Market reaction: The yield on the 10-year Treasury note
fell Tuesday on softer-than-expected core consumer inflation data in March.