Money Supply Rises by $5.3 Billion

The nation’s basic money supply expanded by a sizable $5.3 billion in late September, the Federal Reserve said Thursday.

The increase was about twice what many credit analysts had expected. But the analysts also had suggested earlier that an unusual factor--the recent passage of Hurricane Gloria through the Northeast--might contribute to a bigger than expected increase.

The central bank said the basic money supply, called M1, climbed to a seasonally adjusted $615 billion in the week ended Sept. 30 from $609.7 billion in the previous week.

Averaged $604.5 Billion

M1 represents funds readily available for spending and includes cash in circulation, checking deposits and non-bank travelers checks.

For the latest 13 weeks, M1 averaged $604.5 billion, a 14.8% seasonally adjusted annual rate of gain from the previous 13 weeks. The Fed also issued data on two broader measures of money, M2 and M3, which are reported only monthly.

M2 averaged $2.5285 trillion in September, up $14.7 billion from the previous month. M3 rose to an average $3.1633 trillion last month from $3.1378 trillion in August.

M2 is made up of M1 and such accounts as savings deposits and money-market mutual funds. M3 is the sum of M2 plus less-liquid accounts, such as certificates of deposit in minimum denominations of $100,000.

Other indicators released by the Fed included:

- Commercial and industrial loans at major New York City banks rose $181 million in the week ended Oct. 2, compared to a decline of $421 million a week earlier.

- Commercial paper--or corporate IOUs--outstanding nationally rose $694 million in the week ended Oct. 2, compared to a gain of $2.27 billion in the previous week. Paper issued by financial companies fell $776 million in the latest week, while paper issued by non-financial concerns rose $1.47 billion.

- Member bank borrowings from the Federal Reserve System averaged $768 million in the two weeks ended Wednesday, up from $515 million.