Paying It Down

   For the first time in at least two years, America's supply of money has dipped, according to one of the measures of money stock compiled by the Federal Reserve, even as another measurement has gone up. What it suggests is that consumers are tapping their savings accounts to pay down debt.
   Not that Robby the Robot is rolling down Wall Street yelling, "Danger, Will Robinson," but it does signal a couple of things worth considering. Specifically, the nation's money stock known as M2, which includes savings of various kinds, faded by $26.6 billion in February, even as M1, the amount of money in circulation, rose by $12.4 billion. (M1 measures cash and checkable deposits. M2 adds savings accounts of various kinds.) The numbers, adjusted for seasonal variations, showed up in data released today, March 28, by the Federal Reserve.
   Granted, the change is barely a blip on America's monetary radar. The actual totals were $2.4596 trillion for M1 in January and $2.472 trillion in February, a rise of a mere 0.5 percent. M2, meanwhile, faded from $10.4394 trillion in January to $10.4129 trillion in February, a dip of 0.25 percent.
   Nevertheless, this isn't chump change, either. An amount of $26.6 billion -- the M2 dip for the month -- is roughly the size of annual GDP for the island nation of Jamaica.
   So is it something to worry about? Maybe, and maybe not. Overall, the Fed has kept the growth rate of M1 -- mainly money in circulation -- to about 11.6 percent from a year ago. Growth of M2, however -- which adds savings accounts into the mix -- has faded to a 4.6 percent increase for the three months ending in February, down from an increase of 6.8 percent over the previous 12 months.
   On the whole, maybe it's a good thing. It seems consumers took more than $26 billion from their savings accounts and used almost half of it to pay down debts.
   An over-simplification? Perhaps. But if consumers add cash to the money flow, the Fed doesn't have to, and that should appease conservatives.