The federal surplus broke a record in April 2022 as taxes and other revenue nearly doubled compared with a year earlier, reaching an all-time-high and driving a monthly government surplus of $308 billion.

Higher tax receipts result from strong job growth and a broader economic recovery since a brief recession in 2020. The expansion has stimulated wage increases. Meanwhile, government spending declined as pandemic aid and spending receded.

Government revenue from taxes and other receipts for the month rose by 97% from a year earlier to $864 billion, the Treasury Department reported. Federal outlays in April fell by 16% to $555 billion. Still, the federal government spent 32% more on servicing its debt in April compared with a year earlier as persistently high inflation pushed borrowing costs higher.

In a speech, President Biden said the deficit reduction could help combat inflation, which ran at an 8.3% annual rate in April as measured by the consumer-price index. Republicans, including Senate Minority Leader Mitch McConnell (R., Ky.), have blamed Mr. Biden and Democrats’ policies for helping fuel inflation. That includes passing a close to $2 trillion pandemic-aid package early last year in a party-line vote. 

The annual inflation rate in the US likely accelerated to 8.8% in June of 2022 from 8.6% in May, which would constitute a fresh high since December of 1981, driven once again by a surge in gasoline and food costs. The monthly rate is seen picking to 1.1% from 1%.