The U.S. federal deficit was slightly smaller through the first five months of the budget year than the previous year. Still, the imbalance is on pace to exceed $1 trillion for the fourth straight year, a troubling sign for President Barack Obama's re-election prospects.

The Treasury Department says last month's budget deficit was $232 billion. The imbalance for the first five months of the budget year grew to $581 billion, or 9 percent lower than the same period in fiscal 2011.

The Obama administration expects the deficit will reach $1.3 trillion when the budget year ends on Sept. 30. That would nearly match last year's imbalance. The government ran a record deficit of $1.41 trillion in 2009 and a $1.29 trillion gap in 2010.