WASHINGTON - The U.S. government ran a much higher budget deficit in July than a year ago, but it's still on track for the lowest full-year deficit in eight years.

The Treasury Department said Wednesday that the July deficit totaled $149.2 billion, up from a deficit of $94.6 billion a year earlier. The deterioration stemmed mainly from the fact that Aug. 1 fell on a Saturday. As a result, the government paid out $42 billion in August benefits in late July instead.

Through the first 10 months of this budget year, the deficit stood at $465.5 billion, 1.1 percent higher than a year ago. The outlook for the full year looks more promising. The Congressional Budget Office estimates that the year-end total will drop to around $425 billion, making it the lowest deficit since 2007.

The expected improvement this year reflects a strengthening economy, with tax revenues rising as more people find jobs and the government pays out less in unemployment benefits.

Last year's deficit dropped to $483.3 billion, down from $679.5 billion in 2013. For the four years before 2013, the deficit had ballooned to above $1 trillion as a deep recession cut into revenues and expanded spending on programs such as unemployment benefits.

Through the first 10 months of this budget year, tax revenues totaled $2.67 billion, an increase of 8 percent over the same period in 2014. Spending is up 6.9 percent to $3.14 trillion.

The huge deficits in the aftermath of the worst recession since the 1930s drove the national debt higher. It currently stands at $18.1 trillion, right below the current debt limit.

Since March, Treasury Secretary Jacob Lew has been employing emergency measures to keep the government operating without going over the current limit while appealing to Congress to increase the debt limit.

In a letter to Congress earlier this month, Lew said he expected to have enough maneuvering room to keep the government operating until late October or early November. Lew has urged Republican lawmakers to avoid using the need to raise the debt limit as a form of "brinksmanship" to force the president to accept some of their legislative goals.

It was a standoff over raising the debt limit in August 2011 that prompted the first-ever downgrade of the nation's credit rating by Standard & Poor's.

In addition to dealing with the debt limit, lawmakers will return from their August recess facing a deadline to pass a budget before the Oct. 1 start of the next fiscal year.

If lawmakers are not able to agree on at least a stop-gap funding measure by then, the government would face the prospect of a government shut-down. The last such stalemate occurred in October 2013 when there was a 16-day partial government shutdown before Republicans and Democrats could resolve their differences.