The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
For Release i n MORNING Newspapers of F r i d a y , A p r i l 17, 1953 u. W;H!AL h e , ; m > S B C W T I E S AND EXCHANGE COMMISSION ~ r D < } 119^1 Washington, D. C. STATISTICAL S ERIE$ Release No. 1153 VOLUME AND COMPOSITION OF INDI7IDUAI51 SAVING IN 19$2~ During 1952 i n d i v i d u a l s i n t h e United States, saved more i n l i q u i d form than i n any year s i n c e t h e end of the War, according t o e s t i m a t e s made p u b l i c today by the S e c u r i t i e s and Exchange Commission, Liquid saving i n 1952 t o t a l l e d $ l i | e 6 b i l l i o n s , compared t o $11.8 b i l l i o n i n 1951, t h e previous peak i n t h e post-war period* The i n c r e a s e d r a t e of l i q u i d saving during t h e l a s t two y e a r s r e f l e c t s not only t h e f a c t t h a t d i s p o s a b l e p e r s o n a l income has r i s e n at a f a s t e r r a t e than consumer e x p e n d i t u r e s , but a l s o t h a t , as compared with t h e years 19ll7-1950, saving has been i n more l i q u i d forms while t h e p r o p o r t i o n i n v e s t e d i n new homes and other durable goods has declined* I n 1952 l i q u i d saving was c h a r a c t e r i z e d by a sharp r i s e i n t h e more permanent types of saving such as i n s u r a n c e , time and savings d e p o s i t s i n banks, and s h a r e s i n saving and loan a s s o c i a t i o n s 0 Corporate s e c u r i t i e s purchased by i n d i v i d u a l s were g r e a t e r i n 1952 than i n any year s i n c e 1929 and amounted t o $3o9 b i l l i o n , $2*1 b i l l i o n i n e q u i t y i s s u e s and $1*8 b i l l i o n i n debt i s s u e s * I t should be noted t h a t c o r p o r a t e pension funds are included with i n d i v i d u a l s and accounted f o r almost o n e - t h i r d of i n d i v i d u a l s ! net purchases of c o r p o r a t e s e c u r i t i e s . The amount of saving i n t h i s form corresponded with t h e very l a r g e volume of s e c u r i t i e s o f f e r i n g s * Corporate s e c u r i t i e s sold i n 1952, net of r e t i r e m e n t s , amounted t o $8*6 b i l l i o n , comprising debt i s s u e s of $5«5 b i l l i o n 2/ and e q u i t y i s s u e s of $3*1 b i l l i o n , including over $700 m i l l i o n of conversions i n t o common stock* I n d i v i d u a l s 1 net purchases of investment company shares amounted t o over $500 m i l l i o n i n 1952* Of t h e debt i s s u e s , t w o - t h i r d s were absorbed by i n s t i t u t i o n a l groups, p a r t l y r e f l e c t i n g t h e continued l a r g e volume of i s s u e s sold d i r e c t l y by i s s u e r s t o insurance companies. I n d i v i d u a l s 1 holdings of cash and bank d e p o s i t s i n c r e a s e d by $6*7 b i l l i o n i n 1952* Most of t h e i n c r e a s e was i n time and savings d e p o s i t s which r o s e by $Ue3 b i l l i o n , t h e l a r g e s t i n c r e a s e s i n c e 191+6, Currency holdings expanded by $1*1 b i l l i o n , as compared with an i n c r e a s e of $800 m i l l i o n i n 1951 • However, amounts i n checking accounts rose by only $1*3 b i l l i o n l a s t y e a r , compared with $3*0 b i l l i o n i n 1951 and $3*8 b i l l i o n i n 1950* I n a d d i t i o n t o t h e sharp r i s e i n Savings accounts i n banks, i n d i v i d u a l s made n e t investments i n savings and loan a s s o c i a t i o n s of $3*1 b i l l i o n * This was $1*0 b i l l i o n higher than i n 1951 and r e p r e s e n t e d a record amount placed i n such savings i n s t i t u t i o n s . \ [ I n d i v i d u a l s * saving i n a d d i t i o n t o p e r s o n a l h o l d i n g s , covers saving of unincor** p o r a t e d b u s i n e s s , t r u s t and pension funds and n o n - p r o f i t i n s t i t u t i o n s i n the forms s p e c i f i e d . Liquid saving comprises saving i n the form of currency and bank d e p o s i t s , e q u i t y i n savings and loan a s s o c i a t i o n s , p r i v a t e and government i n s u r a n c e , s e c u r i t i e s , and repayment of mortgage debt and o t h e r consumer d e b t . Estimates of i n d i v i d u a l s ' saving using d i f f e r e n t coverages and concepts are published by the Department of Commerce and the Federal Home Loan Bank Board. A f u r t h e r d e s c r i p t i o n of t h e s e s e r i e s appears on Page 3# 2 j I n c l u d i n g $200 m i l l i o n of f o r e i g n bonds Insurance again c o n s t i t u t e d the l a r g e s t form of l i q u i d s a v i n g , as i n a l l y e a r s since 19U6. Equity i n p r i v a t e l i f e insurance rose by a record $1|»9 b i l l i o n . Equity i n government i n s u r a n c e and pension r e s e r v e s , i n c l u d i n g S o c i a l S e c u r i t y f u n d s , i n c r e a s e d by 4>1|.6 b i l l i o n , t h e l a r g e s t amount since t h e end of t h e War0 The growth i n saving i n t h e form of insurance during r e c e n t y e a r s r e f l e c t s not only a l a r g e r number of persons covered but a l s o l a r g e r amounts p e r i n d i v i d u a l » Mortgage debt on homes i n 1952 showed an i n c r e a s e of $6.0 b i l l i o n , a somewhat smaller r a t e of i n c r e a s e than i n 1951 and 195)0. However, i n the l a s t h a l f of 1952 the r a t e of mortgage debt f i n a n c i n g i n c r e a s e d , the r i s e being a s s o c i a t e d with the sharp expansion i n home c o n s t r u c t i o n i n t h i s p e r i o d . I n s t a l l m e n t and other consumers indebtedness r o s e by $ 3 . 1 b i l l i o n , t h r e e - q u a r t e r s of t h e i n c r e a s e occuring i n the l a s t q u a r t e r of the year i n connection with a sharp r i s e i n automobile s a l e s following t h e s t e e l s t r i k e s e t t l e m e n t , as well as l a r g e r s a l e s of t e l e v i s i o n s e t s and other consumer goods. The s u b s t a n t i a l r i s e in consumer indebtedness l a s t year was i n c o n t r a s t t o t h e very small r i s e i n 1951 when r e s t r i c t i v e c r e d i t r e g u l a t i o n s were i n e f f e c t , but i s about equal t o the i n c r e a s e i n 1950 when purchases of consumer goods were a t an a l l - t i m e h i g h . At t h e end of 1952 i n d i v i d u a l s had accumulated a t o t a l of $359 b i l l i o n of l i q u i d a s s e t s excluding corporate s e c u r i t i e s . 3 / O f f s e t t i n g t h e s e a s s e t s , i n d i v i d u a l s had debts t o t a l l i n g $70 b i l l i o n . The composition of t h e s e holdings excluding c o r p o r a t e s e c u r i t i e s i s shown below f o r 1951 and 1952: ( B i l l i o n s of D o l l a r s ) I n d i v i d u a l s held t h e s e l i q u i d assetsx Dec. 31 1951 Currency $ 2iul Demand d e p o s i t s i n banks 53oil Savings d e p o s i t s i n banks 58.8 Savings and loan a s s o c i a t i o n shares . . . . * l5»9 P r i v a t e insurance 66.5 Government insurance UUeO U. S. Savings Bonds 1+9 »7 Other U. S. Government s e c u r i t i e s 17.3 S t a t e and l o c a l government s e c u r i t i e s . . . . . . . . . . . 9»7 Total liquid a s s e t s . « 339.3 I n d i v i d u a l s owed: Mortgage debt Consumer d e b t . . . . . . . . . . . . . . . . . . . . . . Total debts. . . . . . . . . . . . . . . . . . . I n d i v i d u a l s 1 e q u i t y f l i q u i d a s s e t s l e s s debts) Dec. 31 1952 $ 25*2 5U®7 63.2 18.9 71*L J48.6 50.0 l6.li 10.6 359.0 L3o2 17.9 61.1 I4.9.I 21.0 70.1 278.2 288.9 3 / R e l i a b l e d a t a on t h e value of i n d i v i d u a l s 1 holdings of c o r p o r a t e s e c u r i t i e s are not a v a i l a b l e „ However, rough"estimates i n d i c a t e an order of magnitude of s l i g h t l y more than $200 b i l l i o n at t h e end of 1952. I n a d d i t i o n t o the concept of l i q u i d saving d i s c u s s e d above t h e r e are other concepts of i n d i v i d u a l s 1 saving with varying degrees of coverage c u r r e n t l y i n use* The s e r i e s with t h e most complete coverage, t h e p e r s o n a l saving e s t i m a t e s of the Department of Commerce, i s derived as t h e d i f f e r e n c e between p e r s o n a l income and expenditureso Conceptually, Commerce saving includes t h e following items not included with S.E.C. l i q u i d saving: housing net of d e p r e c i a t i o n , unincorporated business and farm items such as net p l a n t and equipment, changes i n net r e c e i v a b l e s and changes i n i n v e n t o r i e s 0 Government insurance i s excluded from Commerce savingoU/ A more r e s t r i c t e d concept of i n d i v i d u a l s T saving i s t h e s e l e c t e d items s e r i e s of the F e d e r a l Home Loan Bank Board. This s e r i e s covers t h e following components included i n S.E.C. l i q u i d saving: time and savings d e p o s i t s , savings and loan a s s o c i a t i o n s , p r i v a t e l i f e i n s u r a n c e , and U.S. savings bonds* b / For a complete r e c o n c i l i a t i o n see Table 6, p . 16, Survey of Current Business, J u l y 19S2. YEARLY SAVING IN LIQUID FORM BY INDIVIDUALS 1 9 4 0 - 1 9 5 2 40 30 20 1940 42 44 46 48 50 1952 OS.3478 1 Saving by Individuals in the United States 1 / 19^8 - 1952 ( B i l l i o n s of dollars) Type of Saving 19L8 1919 1950 1951 1952 Jan. Mar. Apr.June 1952 JulySept. Oct.Dec. 1. Currency and bank d e p o s i t s a. Currency b . Demand deposits c . Time and savings deposits -1.8 -0.5 -2.2 0.8 -l.h -0.8 -l.lt 0.9 h.2 (*) 3.8 0.5 5.7 0.8 3.0 1.9 6.7 1.1 1.3 h.3 -1.9 -0.3 -2.6 1.0 0.9 o.h -0.6 1.2 3.5 O.li 2.3 0.9 h.2 0.6 2.3 1.3 2. Savings and loan a s s o c i a t i o n s 1.2 1.5 l.h 2.1 3.1 0.7 0.8 0.5 1.0 3. Insurance a. Private b. Government 7.3 3.7 3.6 6.1 3.7 2.3 5.0 3.9 1.1 8.1 3.9 h.2 9.5 h.9 h.6 2.1i 1.2 1.2 2.h 1.1 l.h 2.4 1.2 1.2 2.3 l.h 0.8 h. Securities 2/ a. U.S. savings bonds b. Other U. S. Government c . State and l o c a l government d. Corporate and other 3.2 2.1 -1.5 1.1 1.5 3.0 1.5 -0.3 0.6 1.1 1.2 0.6 -1.2 0.5 1.h 2.8 -O.li -0.3 0.3 3.1 h.3 0.3 -0.9 1.0 3.9 1.8 0.1 0.8 (*) 0.9 0.2 (*) -1.1 0.3 1.0 l.h 0.1 -0.1 0.6 0.9 0.9 0.2 -0.5 0.1 1.1 5. Liquidation of mortgage debt 3 / -U.6 -3.9 -7.2 -6.I1 -6.0 -1.3 -l.h -1.6 -1.6 6. Liquidation of debt not elsewhere c l a s s i f i e d h/ -2.5 -2.3 -3.2 -O.ii -3.1 1.1 -1.3 -0.6 -2.3 7. Total liquid saving 2.8 3.0 1.5 11.8 111.6 2.9 1.6 5.6 k.k 8. Nonfarm dwellings 5 / 8.5 8.1 12.6 11.5 11.6 2.3 2.9 3.2 3.2 9. Other durable consumers' goods 6 / 22.9 23.9 2.9.2 26.8 25.8 5.5 6.1i 6.0 7.9 Total Gross Saving 31.1 35.0 13.3 50.2 52.0 10.8 10.9 lit.9 15.5 10. l / Includes unincorporated business saving of the types s p e c i f i e d . 2 j After deducting change i n bank loans made f o r t h e purpose of purchasing or carrying s e c u r i t i e s . 3 / Mortgage debt t o i n s t i t u t i o n s on one-to four-family nonfarm d w e l l i n g s e hj Largely a t t r i o u t a b l e t o purchases of automobiles ana other durable consumers' goods, although including some debt arising from purchases of consumption goods. The other segments of individuals 1 debt have been allocated t o the assets t o which they pertain, v i z . , saving i n savings and loan a s s o c i a t i o n s , insurance and s e c u r i t i e s . 5 / Construction of one-to four-family nonfarm dwellings l e s s net acquisition of properties by non-individuals3 also includes a small amount of construction of nonprofit institutions. 6 / Consumer expenditures on durable goods as estimated by t h e Department of Commerce. NOTE: http://fraser.stlouisfed.org/ Federal Reserve f Bank < of St. LouisT Figures are rounded and w i l l not n e c e s s a r i l y add t o t o t a l s . Asterisk (*) indicates l e s s than $50 m i l l i o n . The foregoing data have been compiled by the Commission from many d i f f e r e n t sources. Because of the nature of the f i g u r e s , current data are n e c e s s a r i l y estimates and. therefore, are subject t o r e v i s i o n . ^ ® ®
@FedFRASER