The U.S. government recorded a $244 billion budget deficit for July, up 10% from a year earlier, but accounting for calendar differences, the gap would have been $45 billion narrower, the Treasury Department said today.

The Treasury said last month’s deficit climbed $23 billion from the $221 billion deficit recorded in July 2023. Economists polled by Reuters had projected a $242 billion deficit for July.

The nominal increase was largely the result of lower-than-usual benefits outlays last July – for Medicare in particular – because those payments were made in June 2023 due to the beginning of last July falling on a weekend.

Taking those and other adjustments into account, the Treasury said last month’s deficit would have been 16% below the July 2023 gap.

July receipts were $330 billion, up 20% from a year earlier, but adjusting for deferred tax receipts would have been up 12%.

July outlays rose 16% to $574 billion, led by a $72 billion increase in Medicare outlays. Last year’s outlays, however, were artificially low because payments were distributed at the end of June 2023. Taking those and other adjustments into account, outlays would have been 1% lower.

Federal debt service costs, however, continue to rise. Interest on the debt was up 21% to $89 billion last month, and the weighted average interest rate was up 49 basis points to 3.33%, a Treasury official said.

For the first 10 months of the 2024 fiscal year, the U.S. deficit fell 6% to $1.517 trillion from $1.614 trillion in the same period of fiscal 2023. The government’s fiscal year ends Sept. 30.

Year-to-date receipts were up 11% to $4.085 trillion, while outlays for the period were up 6% to $5.602 trillion, the Treasury said.