Full text of E.8 Volume and Composition of Individuals' Saving : July 1955

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

* w w

For Release in MORNING Newspapers of Friday, July 15, 1955
SECURITIES AND EXCHANGE COMMISSION
G.iAn.a of 30VF"rjc.-;3 f.W^hington, D . C .
FEDERAL RESERVE SYSTEM

STATISTICAL SERIES „„
inrr
Release No. 1318 jUL 11 Id^CI
I tBRARY
VOLUME AND COMPOSITION OF INDIVIDUALS' SAVING, JAN.-MAR., 1955^/
According to estimates made public today by the Securities and Exchange
Commission, individuals in the United States saved $1.7 billion during the
first quarter of 1955 compared with $2.8 billion in the first quarter of 195H
and Si,9 billion in the first quarter of 1953 .&/ The lower rate of saving
this year primarily reflects t"he substantial growth in individuals1 debts.
In addition to the greater expansion in debt, there were other changes
in the composition of individuals * saving in the first three months of 1955 as
compared with the similar period of 19%k» Because of the new payment date for
income taxes, checking accounts at banks declined only moderately in contrast
to the usual sharp first-quarter decline. Individuals purchased a larger
amount of U. S. Government securities this year, and also saved more in the
form of private life insurance than in any other first-quarter period. About
the same amount of new investment in savings and loan association shares and
state and local bonds was made, while there was a reduction in currency holdings due to seasonal factors« Individuals added substantially to their savings
accounts at banks and to their investments in corporate securities, although
at a lower rate than in the first quarter of 195k• Equity in Government
insurance and pension reserves showed a comparatively small increase.
Investment in securities, including Government and corporate issues, was
the most important component of individuals' saving in the first quarter of
this year, amounting to $2.1 billion. Net purchases of corporate and other
bonds and stocks totalled somewhat over $900 million. Net new additions to
stocks outstanding amounted to $800 million with about half being taken by
non-individuals and foreigners. While $U00 million was added to individuals*
accounts, there was an increase in borrowing of over $100 million, resulting
in increased equity in stock issues of $300 million. Corporate and other debt
issues outstanding increased $1.5 billion, of which $800 million was absorbed
by institutional investors and $700 million by individuals. Holdings of U. S.
Government bonds were enlarged by $1.0 billion, consisting of $300 million
U. S. savings- bonds and $700 million other Government issues, while net purchases of state and local issues totalled $2500 million.
l/ Individuals' saving, in addition to personal holdings, covers saving of
unincorporated business, trust and pension funds and non-profit institutions
in the forms specified.
2/ Beginning with the preceding release on saving, this series is no longer
designated as "liquid saving" but is shown in the accompanying table,
item 9, as "change in net claims" of individuals. This and the change in
the placement of the government insurance item are tentative pending completion of the general review of savings estimates now in progress. The
 changes have been made because the series has frequently, but incorrectly,
http://fraser.stlouisfed.org/
been taken to measure saving readily available in cash form.
Federal Reserve Bank of St. Louis

- 2 -

S -1318

Equity in private life insurance rose by $1.5 billicni, the highest first
quarter of record. Saving in Government insurance and pension funds amounted
to only #300 million, chiefly reflecting higher benefit payments from the Old
Age and Survivors Insurance Trust Fund as well as large unemployment insurance
payments.
Individuals1 holdings of currency and bank deposits declined by $700 million during the first quarter. Cash held by individuals dropped $1.1 billion
from the high level at the end of 195k, and checking accounts were reduced
#600 million. As mentioned above, the decline in demand deposits during the
quarter was less than in preceding years due to the new income tax payment date.
Savings deposits rose $900 million, compared with #1.3 billion in the first
quarter of 195U» New investment in savings and loan shares amounted to $1.1
billion, about the same as in the first quarter of last year.
Mortgage debt of individuals rose by $2,7 billion, only slightly less
than the record increase in the fourth quarter of 19%k> and $1.1& billion
greater than the first quarter of last year, the continued growth reflecting
the high level of residential building. In th'e first three months of 1955 the
value of home construction amounted to $3.5 billion, an all—time record for
the first quarter of the year.
Although total consumer credit of individuals remained unchanged over the
quarter, there was a sharp rise in installment debt, principally for purchase
of automobiles* This was offset by an equal decline in non-installment debt
due to the usual seasonal repayment of charge accounts.
Besides the concept of saving presented here there are other concepts of
individuals1 saving with different degrees of coverage currently in use. The
series with the moat complete coverage, the personal saving estimates of the
Department of Commerce, is derived as the difference between personal income
and expenditures. Conceptually, Commerce saving includes the following items
not included with S.E.C. gross saving: unincorporated business and farm items
such as net plant and equipment, changes in net receivables and changes in
inventories. Government insurance and consumer durables are excluded from
Commerce saving which, in addition, reflects depreciation on homes.2/
A more restricted concept of individuals1 saving is the selected item
series of the Home Loan Bank Board. This series covers the following components included in S.E.C. saving: time and savings deposits, savings and
loan associations, private life insurance, and D. S. savings bonds.

3/ For a complete reconciliation see Table 6 in the July 1955 issue of the
Business,

Survey
 of Current


Table 1
Saving by Individuals in the United States]/
1952 - 1955
law
Type of Saving

1952

Currency and bank deposits
a. Currency
b. Demand deposits
c. Time and savings deposits

6,8
1.1
1.5
1*.2

2. Savings and loan associations

1.

3.

Private insurance

1953

19Q1
Apr,- 1 July1 Sept.
June

19«
Jan.Mar,

195U

Jan.Mar.
-2.2
-1.0
-2.5
1.3

1.1*
0.1
(*)
1.3

1
1

3.6
-0,1

i:i

6,8
-0.3
2.7
l*.l*

!

b

3.1

3.6

4.5

1.1

1.3

1

0.7

lJt

1.1

h.9

5.2

5.3

1.3

1.2

1

1.3

1.6

1.5

1*.0
0,1

1.6
0.8
-2.5
0.7
2.6

1.9
0.2
0.3
0.2
1.2

0.2
0.2
-1.3
0.5
0.8

!

-1.0
0.1

I

0.5
0.2
(*)
0.1t

-8.6

-1.1*

-2.0

1

1*.8
0.6 «

6

Oct.Dec.
lt.O

0.8
2.1t
0.8

-0.7
-1.1
-0,6

0.9

1*. Securities^/
a. U . S . savings bonds
b. Other U. S. Government
c. State and local government
d. Corporate and other

0.8
3.1

5+1
0.3
0.3
2.0
2.5

5.

Liquidation of mortgage debt]/

-6.3

-7.0

6.

Liquidation of debt not elsewhere
classified*!/

-3*8

-3.2

-O.l*

1.1*

*0.6

|

7.

Subtotal (1 through 6)

8.7

8.5

9.2

2.1

iJl

1

8.

Government insurance

1*.3

3.3

2.6

0.7

0.9

9«

Change in net claims ( 7 * 8 )

13.0

11.8

11.9

2.8

2.2

Nanfarm dwellings^/

11.6

12,3

ti*.l

2.6

11. Other durable consumers* goods

3Jk

26.8

29.7

28.9

6.3

7.5

1

6.8

8.1t

7.7

12.

5l.lt

53,8

51.9

11.6

13.1

|

23.7

16.5

12,8

10.

NOTE*

\J
2/
3/
k/

Gross Saving (9 + 10 + 11)

(*)

1

1
1

1

~i.it

-0.3

2.1

0.3

0.7
0.2

0.6

-0.1

-2.lt

~2f8

-2.7

-0.1

*1.0

(*)

2.1

0.9

3.7

1.3

0.7

O^t

0,3

1

2.8

lt.l

1.7

|

lt.l

lwl

3.5

The earlier series designated "liquid saving" has been discontinued for reasons outlined on page 1, note 2.
The change in net claims (line 9) is conceptually the same as the earlier series, It includes all items that
are changes in net claims against assets regardless of degree of "liquidity," Figures are rounded and will hot
necessarily add to totals. Asterisk (*) indicates less than $50 million. 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 unincorporated business saving of the types specified.
After deducting change in bank loans made for the purpose of purchasing or carrying securities,
Mortgage debt to institutions on one- to four-family nanfarm dwellings,
Largely attributable to purchases of automobiles and other durable consumers t goods, although including some debt
arising from purchases of consumption goods. The other segments of individualst debt have been allocated to the
assets to which they pertain, viz,, saving in insurance and securities,
5/ Construction of one- to four-family nanfarm dwellings less net acquisition of properties by non-individuals; also
includes a small amount of construction of nonprofit institutions,