Fed Reports $4-Billion Drop in M1

The nation’s basic money supply fell $4 billion in the week ended Dec. 14, the Federal Reserve Board reported Thursday.

The Fed said M1 fell to a seasonally adjusted $750.9 billion in that week from a revised $754.9 billion the previous week. M1 includes cash in circulation, deposits in checking accounts and non-bank travelers checks.

For the latest 13 weeks, M1 averaged $756.9 billion, a 2.2% seasonally adjusted annual rate of gain from the previous 13 weeks.

Earlier this year, the Fed announced that it would not set a specific 1987 target range for M1 because of what the central bank called uncertainties about the figure’s underlying relationship to the economy and its sensitivity to a range of circumstances and assumptions.

In other reports:

- The Federal Reserve Bank of New York reported commercial and industrial loans at major New York City banks rose by $1.13 billion in the week ended Dec. 16, bringing the total to $57.9 billion. That compares to a $597-million decline in the previous week.

- The Federal Reserve said bank borrowings from the Federal Reserve System averaged $238 million a day in the week ended Wednesday, compared to $186 million in the previous week.