"Overall F-35 program costs decreased $7.5 billion from $398.6 billion to $391.1 billion," the report said.
The report cited reduced labor costs and revised inflation estimates for the decline. However, the decreases were offset by an increase of $4.4 billion for revised costs for airframe estimates.
The estimated cost for the F-35 engine also decreased by $1.6 billion, or $2.3 percent, from $68.6 billion to $67.0 billion.
The Joint Strike Fighter program is largely funded by the United States, which plans to buy 2,443 F-35 aircraft, according to the aircraft’s producer Lockheed Martin. Nearly a dozen countries plan to use the F-35 fighter.
The fighter's development has been beset by delays, cost overruns and technical problems.
The 2016 Defense Department budget includes $10.6 billion in funding for the procurement of 57 F-35 aircraft for the US Air Force, Navy and Marines, out of total aircraft procurement for the three services of nearly $37 billion.