US government's budget deficit soars to all-time high

·1-min read

The US government's budget deficit has soared to an all-time high of $1.7trn (£1.24trn) for the first six months of the fiscal year.

The figure compares with $743bn (£541bn) at the same time a year earlier, an amount that largely does not include spending aimed at lessening the effect of the coronavirus pandemic on the economy and workers' lives.

The government posted a March deficit of $660bn (£480bn), which was a record-high for the month.

It comes as direct payments to Americans were distributed under President Joe Biden's $1.9trn (£1.3trn) stimulus package.

The package includes payments of $1,400 (£1,020) sent to many people under the American Rescue Plan Act and more measures will be rolled out over coming months.

March included receipts of $268bn (£195bn) and outlays of $927bn (£674bn), which was a record high for the month.

Meanwhile, Boston Federal Reserve Bank president Eric Rosengren said on Monday that the US labour market could tighten significantly this year and next year as more people return to work.

Mr Rosengren said it is possible that unemployment could fall to pre-pandemic levels of around 4% during that time.

Employers who postpone hiring could face strong competition for workers and some businesses are already raising pay to attract people to relatively low-wage roles, he said.

"Assuming virus variants do not become especially problematic, we should see an unusually strong post-recession recovery."