Rise Attributed to Income Tax Refunds : Nation’s Money Supply Takes a Sharp Jump

NEW YORK — The nation’s money supply grew sharply in the week ended April 25, the government reported Thursday, but the increase had no effect on financial markets and economists regarded it as largely inconsequential.

They attributed the rise to an unexpectedly higher rate of federal tax refunds as well as government sluggishness in cashing taxpayer checks, which inflated the categories of money included in the supply figures.

The narrowest measure of the money supply, known as M1, rose $11.7 billion to a seasonally adjusted average of $778 billion, from a revised $766.3 billion the previous week, the Federal Reserve Board said.

M1 includes cash in circulation, deposits in checking accounts and non-bank travelers checks.

A broader measure of money known as M2 averaged a seasonally adjusted $2.996 trillion, up $5.1 billion from a week earlier. M2 equals M1 plus accounts such as savings deposits and money market mutual funds.

The broadest measure of the money supply, called M3, averaged a seasonally adjusted $3.7635 trillion, up $3.5 billion from the previous week. M3 equals M2 plus less-liquid accounts, such as certificates of deposit in minimum denominations of $100,000.

In judging monetary policy, the Fed has indicated that it is monitoring the value of the dollar, commodity prices and the difference between short- and long-term interest rates.

In other reports:

- The Federal Reserve Bank of New York reported that commercial and industrial loans at major New York banks rose $331 million in the week ended April 27, compared to a gain of $234 million the previous week.

- The Federal Reserve said bank borrowings from the Federal Reserve System averaged $575 million a day in the week ended Wednesday, up from $300 million in the previous week.

- 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 $277.1 billion in the two-week period ended Wednesday, up from $276.2 billion two weeks earlier.