Full text of E.8 Volume and Composition of Individuals' Saving : December 1963

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MISS BURGESS

FEDERAL RESERVE BOA S E C U R I T I E S
] rioyy-

AND EXCHANGE COMMISSION
Washington, D C.

S T A T 1 ST( GAI^b^ER IES

release NO.
For Release

1943

December 13. 1963

VOLUME AND COMPOSITION OF INDIVIDUALS' SAVING, JULY-SEPTEMBER, 1963.
Individuals saved at a fairly high rate during the third quarter of 1963,
according to estimates made public today by the Securities and Exchange Commission
Saving in financial form 1/ totaled $5.2 billion, compared to $3.3 billion in
the preceding quarter and $6.4 billion in the third quarter of 1962. However,
after adjustment for seasonal influences the volume of saving in the third quarter of this year was lower than the preceding period.
During the third quarter of this year financial assets of individuals continued to accumulate at a rapid rate. At the same time their indebtedness, an
offset to saving, also mounted. One of the more important developments was the
substantial rise in individuals' checking accounts, partly reflecting seasonal
factors. Holdings of marketable U. S. Government obligations also rose by a
sizeable amount, partially representing increased inventories of dealers included
with "individuals" in this series. Savings accounts at commercial and mutual
savings banks grew by almost the same amount as in the second quarter, lower
than in any period since the beginning of 1962. Net purchases of U. S. Savings
Bonds continued at a rate much larger than last year and net acquisitions of
investment company shares were more than in any period since the second quarter
of 1962. Individuals again were net sellers of other stock issues as well as of
corporate bonds. Mortgage debt and securities borrowing expanded close to the
high rate of the preceding period, but the increase in consumer indebtedness was
moderated by seasonal factors.
Individuals increased their ownership of U. S. Government marketable issues
by $1.5 billion during the third quarter period which included a major refinancing
offer in September at favorable terms. This was the largest growth in acquisitions of Government issues by individuals since the first quarter of 1960, and
contrasted with net sales in the first two quarters of this year. Net purchases
of U. S. Savings Bonds Series E and H amounted to $400 million, the same as in
the second quarter of this year, but double the acquisitions in the third quarter
of 1962. Individuals' holdings of tax exempt obligations showed no change as
against acquisitions of $600 million in the second quarter. The volume of new
state and local issues was not as great as in the second quarter, while commercial banks continued to buy large amounts of these issues.
Individuals' net sales of common and preferred stocks, other than investment
company issues, amounted to $600 million during the third quarter, comparing
with net sales of $1.0 billion in the second quarter. Preferred and common stock
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,
saving and loan association and credit union shares, and insurance and
pension reserves, net of the increase in individuals' debt.

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S-1943

offerings in the third quarter remained at about the same low level which
has prevailed since the second quarter of 1962 despite rising stock prices.
It is estimated that stock acquisitions of institutional investors were somewhat lighter than in the preceding period. Net sales of mutual fund shares
increased slightly during the third quarter and an exchange of portfolio
securities for shares in a newly organized investment company brought the
increase in individuals' investment company shares to almost $400 million,
the highest figure since the second quarter of 1962. Holdings of corporate
bonds and notes declined by $500 million, the sharpest quarterly drop in the
post-war period. The increase in new debt issues, net of retirements, was
$1.1 billion during the third quarter, or half the second quarter total,
partly reflecting the lighter volume of foreign issues offered in this country.
It is estimated that institutional investors, principally state and local
retirement systems, private pension funds and life insurance companies, acquired on balance approximately $1.6 billion of corporate debt issues during
the three months July-September, 1963.
Saving in currency and bank deposits totaled $4.6 billion, over $2.0
billion higher than the preceding quarter, but considerably less than the
record $6.0 billion during the third quarter of 1962. Time and savings deposits increased by $2.4 billion in the third quarter, bringing such saving
to $8.7 billion in the first nine months of this year as compared to a rise of
$11.5 billion in the similar period of 1962. Currency holdings of individuals
declined $500 million while demand deposits rose $2.6 billion, principally
reflecting seasonal movements. Also affected by seasonal influences, a
smaller growth than in the preceding quarter occurred in accounts at savings
and loan associations and credit unions, the increase being $1.7 billion.
Equity of individuals in private insurance and pension reserves together
increased $1.7 billion, $200 more than in the preceding quarter. Noninsured
pension funds grew by $1.0 billion, unchanged from the second quarter. Government insurance and pension reserves rose $1.4 billion compared with $2.7
billion in the previous quarter when the self-employed made their annual
contributions to the old-age pension fund.
Indebtedness of individuals rose $6.3 billion in the third quarter. Consumer debt increased $1.5 billion compared with $2.3 billion in the second
quarter partly reflecting a decline in automobile sales before the new models
become available in quantity. The increase in mortgage debt was estimated at
$4.1 billion, slightly more than in the preceding period. The high level of
mortgage financing reflects strong housing activity, and also the continued
use of mortgage borrowing for nonhousing purposes. Securities loans rose $800
million,primarily to finance the U. S. Government securities inventories of
dealers and brokers.
Other concepts of saving
Besides the concept
individuals' saving with
personal saving estimate
ference between personal

of saving presented here, there are other concepts of
different degrees of coverage currently in use. The
of the Department of Commerce is derived as the difincome (after taxes) and expenditures. A complete

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S-1943

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 individual
saving, there are some statistical and conceptual differences in the two sets
of data.

SAVING BY INDIVIDUALS IN THE U N I T E D STATES 1/
1960 - 1963
(Billions of d o l l a r s )

1960

1961

1962
JulySept.

T v o e of Saving

1962
Oct.:
Dec.
1

1KM
April
June

Jan.Mar.

JulySept.

1
2.8

19.1

6.0

5.4

3.5

2.4

4.6

.6
- .1
8.8

.9
3.2
15.0

- .1
2.8
3.3

'
I
i

.5
1.5
3.5

- .3
.1
3.8

1.4
-1.6
2.6

- .5
2.6
2.4

8.3

9.3

-2.2
5.0

9.4

10.1

1.7

3.5

3.2

3.3

1.7

- .2

-1.2

- .3

1.1

.5
.1
.5
.4
.6
.1
.3
- .8

.4
- .1
- .8
.6
- .4
.3
.2
-1.0

.4
- .1
1.5
- .7
- .5
.4
• - .6

2.7

2.6

-2,5

2.7

1.3
.4
1.0

1.1
.4
1.1

1.2
.4
1.0

1.3
.4
1.0

— L _
- .1

1.2

- .7

1
1

U . S . savings b o n d s
(1) Series E & H
**
*
(2) Other
b . Other U. S. Government 3/
c. State and local government
.
d . Corporate and o t h e r . .
(1) Bonds and notes.................•••••••••••
(2) Investment coopany shares 4 /
(3) Other preferred and c o m m o n stock

a.
b.

Insurance reserves.
Insured pension reserves

••

1.3
- .5
-1.4
1.0
.8
.2
2.7
-2.2

.9
- .5
.5
- .1
"1.5
.2
1.8
-3.5

9.2

.5
- .7
-2.7
1.7
1.1
1.5
1.5
-1.9

9.9

10.2

4.2
1.3
3.7

4.5
1.4
4.0

4.8
1.4
4.0

.2
- .2
.3
! - .1
- .4
.1
.2
, - .7
*

;i !

- .4
2.6

:i !
.9

- .1

2.7

1.4

9.1

1.9

7.2

6.3

Mortgage debt 7
Consumer Indebtedness 8/
Securities loans 9/

4.4
2.9
1.8

4.1
- .9
-1.3

4.0
2.3
.9

4.1
1.5
.8

2.3

6.6

3.3

5.2

5.0

4.3

3.9

4.5

1.0

14.6

11.2

12.9

11.7

22.7

23.0

2.8

1.0

21.9

5.2

11.0
4.2
.3

12.5
1.5
1.1

15.4
5.3
1.1

15.9

19.6

6.4

18.4

a.
b.
c.

1.2
15.0

8.1

3.4

1
|

15.4

Government Insurance and pension

16.8

17.6

4.4

|
Construction and equipment of nonprofit

3.2

3.4

3.6

1.0

|
44.8

10.

43.7

47.5

10.8

|
1

74.5

79.8

88.4

22.5

21.0

22.3

:EiE™!E-E;E i r r L = & ? . £ s s r j r . m r i
£/

estimates and, therefore, are subject to revision.
Includes shares in savings and loan associations and shares and deposits in credit unions.

3/
4/
5/
6/

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, milti-employer plans and union-administered plans.
Includes Social Security, unemployment, civil service, railroad retirement and state and local retirement funds.

7/
8/
"

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

9/
Ifi/

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 or properties by nonlndivlduals.

Full text of E.8 Volume and Composition of Individuals' Saving : December 1963

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