By Ryan McMaken

Money supply growth fell again in April, plummeting further into negative territory after turning negative in November 2022 for the first time in twenty-eight years. April’s drop continues a steep downward trend from the unprecedented highs experienced during much of the past two years.

Since April 2021, money supply growth has slowed quickly, and since November, we’ve been seeing the money supply repeatedly contract—year-over-year— for six months in a row. The last time the year-over-year (YOY) change in the money supply slipped into negative territory was in November 1994. At that time, negative growth continued for fifteen months, finally turning positive again in January 1996.

During April 2023, the downturn accelerated even more as YOY growth in the money supply was at –12.0 percent. That’s down from March’s rate of –9.75 percent, and was far below April’s 2022’s rate of 6.6 percent. With negative growth now falling near or below –10 percent for the second month in a row, money-supply contraction is the largest we’ve seen since the Great Depression. Prior to March and April of this year, at no other point for at least sixty years has the money supply fallen by more than 6 percent (YoY) in any month.

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