United States - Money Stock: Travelers Checks

For the U.S., the money supply measures represent the value of certain financial assets held by households, businesses, nonprofit organizations, and state and local governments. The types of assets included - which vary with each of the four money supply measures - are cash, bank deposits, money market instruments, federal securities, and trade credit notes. The money supply reflects assets, which are very liquid and, consequently, are readily available for future spending.

The money supply measures are based on data from several sources. The main sources are: demand, savings, and time deposits (from weekly reports of large commercial banks and quarterly reports from small and large commercial banks and savings and loan associations); money market mutual funds, treasury securities, commercial paper, bankers acceptances and term Eurodollars from various surveys.

• Weekly data are week-ending Monday.
• Components may not add to totals due to rounding.
• Tables are numbered differently in the published report (1-7) and historical data files (1-12).

Changes in corpus

• March 1996 -- M3 components terminated.
• September 1998 -- Liquid assets terminated.
• December 2018 -- Traveler's checks terminated.

Moody's Analytics supplements

Monetary velocity

The velocity of money is the rate at which money is exchanged from one transaction to another. It is how much a unit of currency is used in a given period of time. Velocity of money is measured as a ratio of nominal GDP to a measure of money supply.

Moody's Analytics calculates the velocity of money stock, using nominal GDP from the U.S. Bureau of Economic Analysis (BEA) and money stock (M1, M2, MZM) from the U.S. Federal Reserve Board (FRB). Expect revisions to the series with each update of the underlying fundamental series. The method is this:

1. Frequency-convert money stock from monthly to quarterly, to match GDP.
2. Velocity = (GDP/(money stock))

The lag of the monetary velocity series is tied to GDP, because it has the longer lag among the fundamentals.

Definitions

Footnote text is taken from the H.6 as of May 2009.

These definitions apply to the U.S. The terms "M0" through "M4" have different meanings in the U.K., EU, Australia, New Zealand, India, and Japan.

M0

(Not reported in H.6) Currency (physical tender), plus central bank accounts that can be exchanged for currency.

M1 (Table 1 footnote 1)

(M1.IUSAM XM1.IUSA M1W.IUSA XM1W.IUSA) Consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) travelers checks of nonbank issuers; (3) demand deposits at all commercial banks other than those due to depository institutions, the U.S. government, and foreign banks and official institutions, less cash items in the process of collection and Federal Reserve float; and (4) other checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union share draft accounts and demand deposits at thrift institutions. Seasonally adjusted M1 is calculated by summing currency, travelers' checks, demand deposits, and OCDs, each seasonally adjusted separately.

M2 (Table 1 footnote 2)

(M2M.IUSA XM2M.IUSA M2W.IUSA, XM2W.IUSA) Consists of M1 plus savings deposits (including money market deposit accounts), small-denomination time deposits (time deposits-including retail Repos in amounts of less than $100,000), and balances in retail money market mutual funds (money funds with minimum initial investments of less than $50,000). Excludes individual retirement account (IRA) and Keogh balances at depository institutions and money market funds. Seasonally adjusted M2 is computed by summing savings deposits, small denomination time deposits, and retail money fund balances, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.

M3

(Discontinued in 1996) Consists of M2 plus large-denomination time deposits (in amounts of $100,000 or more), balances in institutional money funds (money funds with minimum initial investments of $50,000 or more), Repo liabilities (overnight and term) issued by all depository institutions, and Eurodollars (overnight and term) held by U.S. residents at foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom and Canada. Excludes amounts held by depository institutions, the U.S. government, money funds, and foreign banks and official institutions. Seasonally adjusted M3 is calculated by summing large time deposits, institutional money fund balances, Repo liabilities, and Eurodollars, each adjusted separately, and adding this result to seasonally adjusted M2.

Nontransaction components of M2 and M3

(NCM2.IUSA XNCM2.IUSA NCM2W.IUSA XNCM2W.IUSA) A.k.a. Non-M1 M2 and Non-M2 M3.

Money of zero maturity (MZM)

(MZM.IUSA XMZM.IUSA MZMW.IUSA XMZMW.IUSA) Measures the supply of financial assets redeemable at par on demand. By the definition used by the St. Louis Federal Reserve, equals: M2, minus small-denomination time deposits, plus institutional money funds.

Liquid assets

Consists of M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury securities, commercial paper and bankers acceptances, net of money market mutual fund holdings of these assets.

Debt of domestic nonfinancial sectors

The debt aggregate is the outstanding credit market debt of the domestic nonfinancial sectors: the federal sector (U.S. government, not including government-sponsored enterprises or federally related mortgage pools) and the nonfederal sectors (state and local governments, households and nonprofit organizations, nonfinancial corporate and nonfarm noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, which are derived from the Federal Reserve Board's flow of funds accounts, are break-adjusted (that is, discontinuities in the data have been smoothed into the series) and month-averaged (that is, the data have been derived by averaging adjacent month-end levels). The presentation of the debt data in this release differs, therefore, from the quarterly flow of funds statistics contained in the Federal Reserve releases Z.7 and Z.1. In those releases, published levels of credit market debt are measured on a quarter-end basis and contain discontinuities.

Currency (Tables 3 and 5, footnote 1)

(CURM.IUSA etc.) Currency outside U.S. Treasury, Federal Reserve Banks and the vaults of depository institutions. Part of M0. Terminated at the end of 2018.

Traveler's checks (Tables 3 and 5, footnote 2)

(TRAVELM.IUSA etc.) Outstanding amount of U.S. dollar-denominated traveler's checks of nonbank issuers. Traveler's checks issued by depository institutions are included in demand deposits.

Demand deposits (Tables 3 and 5, footnote 3)

(DDM.IUSA etc.) Demand deposits at domestically chartered commercial banks, U.S. branches and agencies of foreign banks, and Edge Act corporations (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float.

Checkable deposits at commercial banks (Tables 3 and 5, footnote 4)

(OCDCM.IUSA etc.) NOW and ATS balances at domestically chartered commercial banks, U.S. branches and agencies of foreign banks, and Edge Act corporations.

Checkable deposits at thrift institutions (Table 3 and 5, footnote 5)

(OCDTM.IUSA etc.) NOW and ATS balances at thrift institutions, credit union share draft balances, and demand deposits at thrift institution

Savings deposits (Tables 4 and 6, footnote 1)

(SAVM.IUSA SAVCM.IUSA SAVTM.IUSA etc.) Savings deposits include money market deposit accounts.

Small-denomination time deposits (Tables 4 and 6, footnote 2)

(STDM.IUSA STDCM.IUSA STDTM.IUSA etc.) Small-denomination time deposits are those issued in amounts of less than $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions are subtracted from small time deposits.

Retail money funds (Tables 4 and 6, footnote 3)

(MMMFRM.IUSA etc.) IRA and Keogh account balances at money market mutual funds are subtracted from retail money funds.

Institutional money funds (Tables 4 and 6, footnote 4)

(MMMFI.IUSA etc.) Institutional money funds are not part of non-M1 M2.

The figures are revised on a continuing basis (i.e., weekly) with the receipt of more accurate underlying data.

Each year (typically in late January) the seasonal factors are revised, and a new quarterly benchmark is applied. Concept definitions may be changed.

The 1996 benchmark incorporated historical data for a number of money market mutual funds that began reporting for the first time during 1994, raising the levels of M2 and M3. The benchmark also added new estimates of large time deposits held by banks. (This item is one of several that are subtracted from gross large time deposits to measure the quantity of such time deposits held by the nonbank public.) Also incorporated were new estimates of money funds' holdings of both Repos and Eurodollars, which are netted out of the aggregates at both the M2 and M3 levels. The benchmark includes other revisions as well, such as the incorporation of deposits data taken from the call reports of banks and thrifts that do not report on one of the more detailed deposits reports.

January 2016 -- Seasonal factors and quarterly benchmark.

January 2017 -- Seasonal factors and quarterly benchmark.

January 2018 -- Seasonal factors and quarterly benchmark.

February 2019 -- Seasonal factors and quarterly benchmark.

23 January 2020 -- Seasonal factors and quarterly benchmark.

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