The U.S. federal budget deficit widened to $291 billion in July, the second-largest shortfall ever recorded for that month and about 20 percent higher than a year earlier, according to Treasury Department figures released Tuesday. The gap reversed June’s $27 billion surplus and underscores the fiscal pressure facing the government despite a surge in tariff revenue championed by President Donald Trump. Customs-duty collections reached a record $27.7 billion in July—nearly four times the level of a year earlier and roughly in line with June’s windfall—bringing fiscal-year-to-date tariff receipts to $135.7 billion. Even so, overall revenues rose only 2 percent to $338 billion, while federal outlays jumped 10 percent to a July record of $630 billion, driven by higher spending on Social Security, health-care programs and interest on the public debt. After the first 10 months of fiscal 2025, the cumulative deficit stands at $1.63 trillion, up 7 percent from the same period last year. Treasury Secretary Scott Bessent told Fox Business that accelerating tariff inflows could exceed $300 billion this year, although analysts noted the additional income is being eclipsed by rising mandatory spending and debt-service costs. Separate Labor Department data showed consumer prices rose 0.2 percent in July and 2.7 percent from a year earlier, unchanged from June, while core inflation edged up to 3.1 percent. Prices for tariff-sensitive items such as footwear and furniture climbed, but cheaper gasoline and modest food costs helped offset broader pressure, suggesting the full impact of higher import duties has yet to appear in headline inflation.