Money Supply Declines $1.2 Billion

The nation’s basic money supply contracted by $1.2 billion in early April, the Federal Reserve said Thursday.

The decline was not as steep as the $2-billion drop expected by some credit analysts.

The Fed said M1 fell to a seasonally adjusted $573.6 billion in the week ended April 8 from $574.8 billion in the previous week.

For the latest 13 weeks, M1 averaged $568.9 billion, a 10.3% seasonally adjusted annual rate of gain from the previous 13 weeks.

Other indicators released included:

- Commercial and industrial loans at major New York City banks fell $776 million in the week ended April 10, compared to a gain of $197 million in the previous week.

- Commercial paper outstanding fell $318 million in the week ended April 10 to $249.06 billion. Commercial paper rose $516 million in the previous week.

- Member bank borrowings from the Federal Reserve System averaged $335 million in the week ended Wednesday, down from $575 million the previous week.

- The nation’s banking system averaged free reserves of $33 million in the two weeks ended April 10, compared to $359 million for the previous two-week period.

- The Federal Reserve Bank of St. Louis reported that the monetary base, the seasonally adjusted total of member bank reserves held at Federal Reserve banks and cash in bank vaults and in circulation, was $223 billion in the week ended Wednesday, down from $223.7 billion a week earlier.

CH, Los Angeles Times