Money Supply Climbs $4.4 Billion

NEW YORK —  The Federal Reserve Board said Thursday that the nation’s basic money supply rose $4.4 billion in late November, an increase that exceeded expectations but that analysts attributed in part to technical factors.

The Fed said the measure of money readily available for spending, known as M1, increased to a seasonally adjusted $621 billion in the week ended Nov. 25 from $616.6 billion in the previous week. M1 includes cash in circulation, deposits in checking accounts and non-bank travelers checks.

For the latest 13 weeks, M1 averaged $612.7 billion, a 10.9% seasonally adjusted annual rate of gain from the previous 13 weeks.

The Fed has said it would like to see M1 grow between 3% and 8% from the second quarter of this year through the fourth quarter.

Computer Breakdown

The latest increase “is not overly bothersome,” said Ray Stone, manager of financial economics for the Merrill Lynch investment firm. “It is larger than ordinary because of our securities transfer problem on Nov. 21.”

On that day, a computer broke down at the Bank of New York, which is the largest clearer of Treasury securities sales. The bank was unable to complete transactions involving about $22 billion.

As a result, “if you were buying securities, the money sat in your checking account,” Stone said.

In other reports:

- The Federal Reserve Bank of New York reported that commercial and industrial loans at major New York City banks fell $180 million, compared to a decline of $270 million a week earlier.

- The Federal Reserve said the federal funds rate averaged 8.49%, up from 7.71% in the previous week.

- The Federal Reserve said bank borrowings from the Federal Reserve System averaged $2.425 billion in the two-week period ended Wednesday, up from $656 million in the previous two-week period.

- The Federal Reserve said total adjusted reserves of member banks averaged $45.043 billion in the two-week period, up from $44.126 billion in the prior two-week period.

- The Federal Reserve said net borrowed reserves totaled $1.341 billion in the two weeks ending Wednesday, up from $238 million in the prior two-week period.