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NEW YORK (Reuters) - The amount of U.S. commercial paper outstanding contracted this week to its lowest level in seven months, suggesting reduced short-term corporate borrowing activity around quarter-end and the U.S. July Fourth holiday, Federal Reserve data showed on Thursday.
U.S. seasonally adjusted commercial paper (CP) outstanding fell $26.9 billion to $946.8 billion in the week ended July 5. It was the smallest amount since the $935.4 billion total in the Dec. 7, 2016 week.
Year-to-date, this short-term debt which companies sell to fund inventories and payrolls has fallen by nearly $40 billion since the end of 2016.
Non-seasonally adjusted commercial paper outstanding - which some analysts consider a more reliable reading than the seasonally adjusted one since it has been distorted by the financial crisis - fell $20.1 billion to $952.3 billion.
On June 30, CP issuance totaled $61.10 billion, well below its average. It recovered to $71.52 billion on Monday before the July Fourth holiday when U.S. financial markets were closed and rose to 93.2 billion on Wednesday, Fed data showed.
Reporting by Richard Leong; Editing by Andrew Hay