Full text of E.8 Volume and Composition of Individuals' Saving : December 1962

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SECURITIES AND EXCHANGE COMMISSION
Washington, D C.
STATISTICAL

S E R I E S

release NO. J

For Release

H

December 12, 1962

VOLUME AND COMPOSITION OF INDIVIDUALS' SAVING, JULY-SEPTEMBER, 1962.
Individuals continued to save at a high rate during the third quarter of
1962, according to estimates made public today by the Securities and Exchange
Commission. Saving in financial form 1/ totaled $6.8 billion, compared to
$4.5 billion in the preceding quarter and $5.9 billion in the third quarter of
1961. After adjustment for seasonal influences, the volume of saving in the
third quarter of this year was approximately the same as in the preceding quarter but lower than in the first quarter of this year.
Of importance in the third quarter was a further growth in individuals'
financial assets of the more liquid type, i.e., bank deposits and marketable
U. S. Government securities. This reflected not only the large amount of new
saving but some shifting of funds resulting from uncertainties in the stock
market following the break in late May of this year. Individuals purchased
the smallest amount of investment company shares since the fourth quarter of
1960, and also acquired a smaller amount of corporate bonds. Although individuals' sales of stock issues other than investment company issues again exceeded
purchases, the liquidation was less in amount than in the preceding four
quarters. Other changes in the pattern of saving principally reflected seasonal
factors and included a smaller investment in saving and loan shares, less saving in government insurance and pension reserves and reduced currency holdings.
Net purchases of all types of securities by individuals amounted to $700
million in the third quarter. Investments in U. S. Government obligations,
other than savings bonds, totaled $700 million in contrast to a $600 million
liquidation in the previous quarter and an increase of $1.1 billion in the
third -quarter of 1961. Net acquisitions of series E and H Savings Bonds,
amounted to $200 million, the same as in the preceding quarter. Individuals'
holdings of state and local government securities declined each quarter this
year, the drop in the third quarter amounting to $200 million. Yields on these
securities in 1962 have been less than in recent years reflecting primarily
the pressure of increased acquisitions by commercial banks. Net purchases of
corporate bonds during the third quarter totaled slightly less than $100 million
in contrast to net purchases of $700 million in the second quarter, due in part
to a smaller volume of new issues in the third quarter of this year.
Individuals' net sales of common and preferred stocks other than investment
company issues, amounted to $400 million, as compared with a liquidation of
1/

Individuals' financial saving, in addition to personal holdings, covers
saving of unincorporated business, trust funds and nonprofit institutions
and includes saving in the form of securities, currency and bank deposits,
savings and loan association and credit union shares, and insurance and
pension reserves, net of the increase in individuals' debt.




5-1869
over $1 billion in each of the first two quarters of the year. While there
was a sharp decline in the volume of net equity issues, acquisition of
stock by institutional investors was also much less than recently/. Openend investment companies, in contrast to their previous strong buying, in
the third quarter were net sellers of portfolio securities. Individuals,'
net acquisitions of investment company shares during the third quarter
amounted to $300 million, half as large as in the preceding quarter.
Saving in currency and bank deposits totaled $5.2 billion, almost $2.0
billion higher than in the preceding quarter or the comparable period last
year. Time and savings deposits in the third quarter rose $3.4 billion;
such accounts have increased by a record $11.6 billion for the first nine
months of 1962, compared to an increase of $8.8 billion for the entire year
1961. This growth was principally the result of higher interest rates on
savings deposits, which as noted above, attracted new savings as well as
funds from other types of investments. Currency holdings of individuals
declined $700 million while demand deposits rose $2.4 billion, principally
reflecting seasonal movements. Shares in savings and loan associations and
credit unions increased $1.7 billion.
Equity in private insurance and pension reserves rose $2.6 billion during the third quarter, slightly more than the previous period. Government
insurance and pension reserves increased $1.0 billion in the third quarter,
compared with $2.2 billion in the previous quarter, when annual contributions
to the old-age pension fund from the self-employed were received.
The growth in debts during the third quarter amounted to $4.5 billion.
Consumer indebtedness rose $1.0 billion, compared to $2.2 billion in the
preceding quarter, principally due to a slackening of automobile financing
with the supply of certain types and models being a factor in the sales
decline. The increase in mortgage debt amounted to $3.4 billion, $400 million higher than the third quarter of 1961, reflecting the higher level of
housing activity this year. Securities loans increased $100 million with
increased borrowings on U. S. Government obligations by brokers and dealers
(included with individuals in this series) offset in part by a continued
decline in borrowings on corporate securities.
Other concepts of saving
Besides the concept of saving presented here, there are other concepts
of individuals' saving with different degrees of coverage currently in use.
The personal saving estimate of the Department of Commerce is derived as the
difference between personal income (after taxes) and expenditures. A complete reconciliation of the Securities and Exchange Commission and Commerce
Department series appears annually in the July issue of the Statistical
Bulletin of the Securities and Exchange Commission and in the Survey of
Current Business.
The Federal Reserve Board's flow-of-funds system of accounts includes
capital expenditures as well as financial components of saving and covers
saving of Federal, state and local governments, businesses, financial
institutions and consumers. While the Federal Reserve Board's estimates are
similar to the Securities and Exchange Commission estimates of individuals'
saving, there are some statistical and conceptual differences in the two
sets of data.




I

SAVINS BY INDIVIDUALS IN THE UNITED STAIRS

1

1/

S-1869

1959 - 1962
->

(Billions of dollars)

X
1959

1960

1961
Jan.-I
Mar. |

1961
Apr.• 1 JulyJonst | Sept.

2.1

.9
| -1.6
2.7

Jan. ^
Mar. |

1 3.3

3.0

4.2 1

3.3

1 5.2

1- .5

- .6 1

i:89

1.0
.3
1.7

1.2
-1.3
3.4

1 - .7
1 2.4

1 1.5

3.2

2.1 1

2.8

' 1,
1
1

Type of Saving

I

>•

1

%

1.

4.4

3.8

9.7

1.3

.7
- .4
4.1

*
-1.2
5.0

.6
.3
8.8

- .8
- .4
2.5

'

1962
Apr.- I July
June | Sept.

Oct.Dec.

1

i

1

j i

I

i
2.

7.2

8.3

9.3

2.0

|

2.7

|
3.

9.9
U. S. savings bonds
(1) Series B & H
(2) Other
b. Other U. S. Government 5/

*

1.1

- .9

1 - .7

Corporate and other
(2) Investment company shares 4/...
(3) Other preferred and common

1 1.5

1.2

- .2 | - .6

1

a.

d.

1

- .1
-1.7
9.1
1.8
.9
.1
1.7

.5
- .7
-2.1
1.2
1.1
1.5
1.5

1.3
- .5
-1.4
.2
1.6
.9
2.7

- .9

-1.9

-2.0

.4
- .1
-1.1
"

1
.3
I - .1
-2.1
- .2
e 2
1
.2
1.5
.8
.1 1
.6
.6

- .5

|

.1

1

1 .3
1 " .1
i':!

!•:!
' - .7

Private insurance and pension reserves.
b«

Insured pension reserves

.

: l !

•

-

.2
- .1
- .6
- .2
.1
.7
.6

.2
- .1
.7
• .2
*
.1
.3

- .9

-1.1 1 -1.2

- .4

-:!i

1

7.

9.1

10.0

2.6

|

2.2

I 2.4

2.8

2.6 I

2.5

2.6

4.2
1.3
3.7

4.5
1.4
4.0

1.1
.4
1.1

1
,

.9
.4
.9

1 1.1

1.4
.4
1.0

1.1 1

1.0
.4
1.1

1.3
.4
1.0

2.3

3.4

1.3

- .2

- .6

- .2 1

2.2

1.0

7.3

2.0 j

5.7

4.5

3.8
2.2
. M l
- .5 | - .4

3.4
1.0
.1

1

;t

!

9.

15.3

15.2

.1

Consumer indebtedness 8/

13.2
6.1
.2

10.9
4.2
.3

13.0
1.2
1.1

2.9
-1.7
-1.0

Net financial saving (1+2+3+4+5-6)

13.3

9.3

16.2

4.7

1

19.2

18.4

16.8

4.2

1

1 4.4
,

2.9
.7
1
.9
3.2
3.8

1

i
i

3 , 4

| 3.0
*2
.2

4.1
2.1
1.1

5.9

2.4

6.6

; 4.1

4.7

4.4 j

.9

.8 I

1
1
1
1

1

2.9

3.2

3.4

.8

.8

43.6

44.8

43.7

9.1

| 10.9

1

4.5

6.8

3.9

4.4

.9

.8

13.6

1
10.4 | 12.0

10.8

21.6

22.2 1 21.3

22.8

i

Construction and equipment of nonprofit

10.

1::,

i

| 1.4

19.4

8.

~h

3.5
2.0
3.4

-!

b.

*7

8.9

' 5. Government insurance and pension

6.

1
1

.4
- .1
.7
.4
- .1
.1
.6

•
4.

1 "

1

i
i
| 10.2

|
78.9

11.

75.8

80.1

18.7

j 18.7

j 21.1
1

*
It
2/
3/
4/
2/
6/
£/
8/
9/
JO

1

1

Indicates less than $50 million. ** Revised.
Includes unincorporated business saving of the types specified. Figures are rounded and will not necessarily add to totals. The foregoing
data have been compiled by the Commission from many different sources. Because of the nature of the figures current data are necessarily
estimates and, therefore, are subject to revision.
Includes shares in savings and loan associations and shares and deposits in credit unions.
Includes nonguaranteed Federal agency securities.
Includes closed-end investment companies as well as mutual funds.
In addition to corporate funds, includes reserves of nonprofit organization, multi-employer plans and union-administered plans.
Includes Social Security, unemployment, civil service, railroad retirement and state and local retirement funds.
Mortgage debt to institutions on one-to-four-family nonfarm dwellings.
Consumer debt owed to corporations, largely attributable to purchase of automobiles and other durable consumer goods, although including
some debt arising from purchases of consumption goods. Policy loans on government and private life insurance have been deducted from those
items of saving
Change in bank loans to brokers and dealers and others made for the purpose of purchasing or carrying securities.
Construction of one-to-four-family nonfarm dwellings less net acquisitions of properties by nonindividuals.