WASHINGTON — The federal deficit for the first two months of the new budget year is piling up faster than last year’s record imbalance.
Economists worry that the flood of red ink could push interest rates higher and raise the cost of borrowing for consumers and businesses, a potential drag on the fragile economic recovery.
The November deficit totaled $120.3 billion, the Treasury Department said Thursday. That’s less than analysts had expected and down from a $176.4 billion imbalance in October. It was a record 14th straight monthly deficit.
Even with the improvement, the deficit is 5.7 percent higher than the first two months of the 2009 budget year, when it hit a record $1.42 trillion. The Obama administration expects the 2010 deficit will set a new record at $1.5 trillion.
In a sign of the recession’s depth, the government said individual income-tax collections totaled $63.9 billion in November, less than the $70.5 billion the government collected in Social Security taxes and taxes for Medicare and disability insurance.
Analysts said it is not unusual for individual income taxes to fall sharply during a recession because the volatile category reflects not only the number of people working but also bonuses and individual investment earnings that plunged during the downturn.
