Preliminary figures for the December money supply released yesterday by the Federal Reserve showed that money growth exceeded the Fed's targets for the year. M1, until October the money measure most closely watched by the Fed, rose 8 1/2 percent from the fourth quarter of 1981 to the fourth quarter of 1982, compared with a target range of 2 1/2 percent to 5 1/2 percent set last February. Because of distortions in M1 associated with new types of accounts at financial institutions, the Fed has been placing more emphasis on M2 and on the level of interest rates. But M2, as it had all year, remained above target in the fourth quarter with growth over the year of 9.9 percent compared with a goal of 6 percent to 9 percent.
But the faster money growth was to some extent deliberate because the relationship between money and the economy went awry during 1982. Normally, the economy and M2 have grown more or less in line with each other, while the economy usually has expanded about 3 to 3 1/2 percent faster than M1.
Last year, however, M2 rose 9.9 percent and the gross national product only a little over 4 percent. The 6 percent gap between the M2 and GNP growth rates was unprecedented in the postwar period, and Federal Reserve officials who next month have to set official money targets for this year are uncertain whether the old relationship between money and economic growth will be reestablished in 1983.