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For R e l e a s e i n MORNING Newspapers of Monday, J u l y 23, 1956 SECURITIES AMD EXCHANGE COMMISSION Washington, D.C. STATISTICAL SERIES R e l e a s e No, 1393 VOLUME AND COMPOSITION OF INDIVIDUALS' SAVING, JAN.-MARCH, 1956 1 / According t o e s t i m a t e s made p u b l i c t o d a y by t h e S e c u r i t i e s Commission, i n d i v i d u a l s i n t h e United S t a t e s saved $ 5 . 0 b i l l i o n q u a r t e r of 1956, 2 / an amount h i g h e r t h a n f o r any p e r i o d s i n c e of 1952 o This r a t e of s a v i n g compares w i t h $ 3 . 3 b i l l i o n i n t h e and $ 1 . 7 b i l l i o n i n t h e f i r s t q u a r t e r of 1955. and Exchange during the f i r s t the t h i r d quarter fourth quarter The most i m p o r t a n t form of l i q u i d s a v i n g by i n d i v i d u a l s i n t h e f i r s t q u a r t e r was i n v e s t m e n t i n s e c u r i t i e s , i n c l u d i n g t h e l a r g e s t n e t p u r c h a s e of U n i t e d S t a t e s Government i s s u e s s i n c e t h e f i r s t q u a r t e r of 19l;7» Aside from u n u s u a l l y l a r g e i n v e s t m e n t s i n s e c u r i t i e s , i n d i v i d u a l s i n c r e a s e d t h e i r ownership of o t h e r f i n a n c i a l a s s e t s somewhat more t h a n i n t h e f i r s t q u a r t e r of l a s t y e a r . I n d i v i d u a l s 1 checking a c c o u n t s , a l t h o u g h showing a s e a s o n a l r e d u c t i o n , d i d n o t drop as much as i n t h e f i r s t q u a r t e r of 1955, w h i l e t h e i r c u r r e n c y h o l d i n g s , a l s o a f f e c t e d by s e a s o n a l f a c t o r s , were r e d u c e d by t h e same amount as i n t h e p r e c e d i n g y e a r * During t h e f i r s t q u a r t e r t h e r e was some s l a c k e n i n g i n t h e growth of i n d i v i d u a l s T mortgage d e b t w h i l e consumer i n d e b t e d n e s s was r e d u c e d c h i e f l y due t o s e a s o n a l payments of c h a r g e a c c o u n t s • During t h e f i r s t q u a r t e r of 1956, i n d i v i d u a l s added $ 3 . 8 b i l l i o n t o t h e i r s e c u r i t i e s i n v e s t m e n t s , of w h i c h over 60 p e r c e n t was U. S . Government o b l i g a t i o n s 0 T h i s c o n s i s t e d of $200 m i l l i o n of Savings Bonds and $ 2 . 2 b i l l i o n of o t h e r Government i s s u e s » During t h i s p e r i o d , U. S . Government i s s u e s h e l d i n p o r t f o l i o s of n o n - i n d i v i d u a l s , c h i e f l y banks and n o n - f i r a n c i a l c o r p o r a t i o n s , were reduced by a l m o s t $6*7 b i l l i o n w h i l e a t t h e same t i m e , Government s e c u r i t i e s o u t s t a n d i n g d e c l i n e d more t h a n $b»b b i l l i o n . Thus, t h e r e was an a d d i t i o n t o i n d i v i d u a l s 1 h o l d i n g s ( a f t e r a n e t repayment of over $150 m i l l i o n l o a n s ) of $2.14. b i l l i o n . I t s h o u l d be n o t e d t h a t " i n d i v i d u a l s " i n c l u d e s p e r s o n a l t r u s t f u n d s and n o n - p r o f i t f o u n d a t i o n s , which i t i s u n d e r s t o o d made l a r g e p u r c h a s e s of Government i s s u e s i n t h e f i r s t quartero I n v e s t m e n t s i n c o r p o r a t e and o t h e r s e c u r i t i e s , i n c l u d i n g s t o c k s and bonds, c o n t i n u e d a t a h i g h l e v e l , amounting t o $800 m i l l i o n . Such i n v e s t m e n t s amounted t o $1*0 b i l l i o n in t h e f o u r t h q u a r t e r of 1955 and $U00 m i l l i o n i n t h e f i r s t quarv t e r of t h a t y e a r 0 Ownership of p r e f e r r e d and common s t o c k was i n c r e a s e d $500 m i l l i o n of which about h a l f r e p r e s e n t e d i n c r e a s e d e q u i t y t h r o u g h payment d u r i n g t h e q u a r t e r of s e c u r i t i e s l o a n s . I n t h e p r e c e d i n g q u a r t e r i n d i v i d u a l s had borrowed on c o r p o r a t e s t o c k s t o t h e e x t e n t of about $500 m i l l i o n , so t h a t t h e i r e q u i t y i n s t o c k s i n c r e a s e d by l e s s t h a n $200 m i l l i o n . C o r p o r a t e and o t h e r bond i n v e s t m e n t s t o t a l l e d $300 m i l l i o n f o r t h e f i r s t q u a r t e r , s u b s t a n t i a l l y l e s s t h a n i n t h e p r e ceding q u a r t e r when a l a r g e volume of n o n - g u a r a n t e e d government i s s u e s ( i n c l u d e d i n t h i s c a t e g o r y ) were m a r k e t e d 0 1 / I n d i v i d u a l s ' s a v i n g , 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 , c o v e r s s a v i n g of u n i n c o r p o r a t e d b u s i n e s s , t r u s t f u n d s , and n o n - p r o f i t i n s t i t u t i o n s i n t h e forms specified. 2 / R e p r e s e n t s change i n n e t c l a i m s and i n c l u d e s i n d i v i d u a l s 1 s a v i n g i n t h e form ~~ of cash and d e p o s i t s , s a v i n g s and l o a n a s s o c i a t i o n s , s e c u r i t i e s and i n s u r a n c e , n e t of t h e i n c r e a s e i n i n d i v i d u a l s T d e b t s * S.-1393 — 2 — Net p u r c h a s e s by I n d i v i d u a l s of s t a t e and l o c a l o b l i g a t i o n s i n t h e f i r s t q u a r t e r amounted t o $600 m i l l i o n , $100 m i l l i o n l e s s t h a n i n t h e f o u r t h q u a r t e r of 19$5), b u t $500 m i l l i o n more t h a n i n t h e f i r s t q u a r t e r of t h a t y e a r . There was a moderate d e c l i n e i n i n d i v i d u a l s 1 cash and bank d e p o s i t s of $500 m i l l i o n , I n d i v i d u a l s r e d u c e d t h e i r c u r r e n c y h o l d i n g s by $800 m i l l i o n , p r a c t i c a l l y t h e same as i n t h e f i r s t q u a r t e r of 1955, and t h e i r checking a c c o u n t s dropped by $900 m i l l i o n * This l a t t e r d e c l i n e i s comparable t o a d e c r e a s e of $ 1 . 2 b i l l i o n i n t h e f i r s t q u a r t e r of 1955. Time and s a v i n g s d e p o s i t s , on t h e o t h e r h a n d , r o s e by $ 1 . 3 b i l l i o n , a somewhat l a r g e r i n c r e a s e than i n t h e 1955 f i r s t q u a r t e r . I n a d d i t i o n , I n d i v i d u a l s p l a c e d $ 1 . 1 b i l l i o n i n s a v i n g s and l o a n a s s o c i a t i o n s , t h e same as i n t h e f i r s t q u a r t e r of t h e two p r e c e d i n g y e a r s * The growth i n i n d i v i d u a l s 1 e q u i t y i n p r i v a t e i n s u r a n c e and p e n s i o n r e s e r v e s was e s t i m a t e d a t $1*9 b i l l i o n , c o n t i n u i n g c l o s e t o t h e r i s e i n t h e p r e c e d i n g y e a r . Saving i n Government i n s u r a n c e and p e n s i o n r e s e r v e s t o t a l l e d $800 m i l l i o n , $300 m i l l i o n h i g h e r t h a n i n t h e f i r s t q u a r t e r of 1955* Mortgage d e b t of i n d i v i d u a l s i n c r e a s e d by $ 2 . 6 b i l l i o n , s l i g h t l y l e s s t h a n i n t h e comparable p e r i o d of 1955, and r e f l e c t i n g somewhat lower amounts s p e n t f o r r e s i d e n t i a l c o n s t r u c t i o n . Consumer I n d e b t e d n e s s d e c l i n e d by $U00 m i l l i o n due t o s u b s t a n t i a l f i r s t - q u a r t e r payments on c h a r g e a c c o u n t s , o f f s e t t o a minor e x t e n t by a s m a l l i n c r e a s e i n i n s t a l l m e n t d e b t . The s m a l l r i s e i n i n s t a l l m e n t d e b t cont r a s t e d w i t h a f a i r l y l a r g e e x p a n s i o n i n t h e f i r s t q u a r t e r of 1955, r e f l e c t i n g lower automobile p u r c h a s e s t h i s y e a r . B e s i d e s t h e c o n c e p t of s a v i n g p r e s e n t e d h e r e , t h e r e a r e o t h e r c o n c e p t s of i n d i v i d u a l s ' s a v i n g w i t h d i f f e r e n t d e g r e e s of c o v e r a g e c u r r e n t l y i n u s e . The s e r i e s w i t h t h e most c o m p l e t e c o v e r a g e , t h e p e r s o n a l s a v i n g e s t i m a t e s of t h e D e p a r t ment of Commerce, i s d e r i v e d 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 e x p e n d ] t u r e s . C o n c e p t u a l l y , Commerce s a v i n g i n c l u d e s t h e f o l l o w i n g i t e m s n o t i n c l u d e d w i t h S,EoC. g r o s s s a v i n g : u n i n c o r p o r a t e d b u s i n e s s and farm i t e m s such as n e t p l a n t and equipment, changes i n n e t 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 . Government i n s u r a n c e and consumer d u r a b l e s a r e e x c l u d e d f r o m Commerce s a v i n g which, i n a d d i t i o n , r e f l e c t s d e p r e c i a t i o n on homes. 3 / A more r e s t r i c t e d c o n c e p t of I n d i v i d u a l s 1 s a v i n g i s t h e s e l e c t e d i t e m s e r i e s of t h e Home Loan Bank B o a r d . T h i s s e r i e s c o v e r s t h e f o l l o w i n g components i n eluded i n S . E , C . s a v i n g : time and s a v i n g s d e p o s i t s , s a v i n g s and l o a n 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* 3 / For a complete r e c o n c i l i a t i o n , see Table 6, i n t h e J u l y 1956 i s s u e of t h e Survey of C u r r e n t B u s i n e s s . S.-1393 - 3 - Table 1 Saving by I n d i v i d u a l s i n t h e United S t a t e s 1 / 1953-195:6 ( B i l l i o n s of d o l l a r s ) -A r * ¥ ' Jan.- | Mar. | . 1955 Apr.- 1 JulyJune | Sept. j Oct.j Dec, 1956 Jan.— Mar. l4.il .4 .4 3.5 -1.0 - .8 -1.2 1.0 .2 .3 -1.2 1.0 1 1 3.2 .1 2ol4 .8 1 1 1 1 2.0 .7 .5 .7 - .5 - ,8 - .9 1.3 1 Type of Saving 1953 1951 1955 1, U.8 06 - .L I4.6 7.0 - a3 2.5 L.8 Currency and d e p o s i t s a . Currency b 0 Demand d e p o s i t s c . Time and s a v i n g s d e p o s i t s 2 / | | | 1 2. S a v i n g s and l o a n a s s o c i a t i o n s 3.6 4.4 b.9 l.l 1.5 .7 1.6 1.1 3o Securities 3/ a . U. So S a v i n g s bonds b 0 O t h e r U. S . Government Co S t a t e and l o c a l Government d . C o r p o r a t e and o t h e r (1) Bonds and n o t e s ( 2 ) P r e f e r r e d and common s t o c k 2.9 - .5 .6 -1.6 .5 -x* 5.7 .3 1.6 I.I4 2.4 2,1 .3 1.8 1 • 2 | 1.2 j a .4 .3 1 a | 1 .8 1.8 * l * | ol 1 98 .3 1 .3 .3 .6 .6 ' .3 .2 ' .3 1 1.2 .1 | — .6 | .7 1.0 ' .8 1 .2 1 3.8 .2 2.2 .6 .8 .3 .5 11.3 11.0 14.9 2.0 2.I4 | 5.7 | 4.8 4.5 2.1 1.3 .3 .5 1.9 1.0 .It .6 !i 1.6 1.1 .4 ol • 4. L i q u i d s a v i n g (1+2+3) 5o P r i v a t e i n s u r a n c e and p e n s i o n r e s e r v e s a. Insurance reserves b» Insured p e n s i o n r e s e r v e s Co N o n - i n s u r e d p e n s i o n f u n d s 6.8 3.9 1.1 1.8 7.4 4.4 1.2 1.8 8.0 Uo7 1.3 2.1 2.0 1.2 .3 .5 1 1 1 1 1.8 1.0 .3 .5 1 | | | 2.0 1.2 .3 .5 ' 1 ' ' 6. Government i n s u r a n c e and p e n s i o n reserves 4/ 3.2 2.7 3.2 .5 | | 1.0 1 I 1.0 ' ' .7 .8 Increase in individuals1 debts a . Mortgage d e b t 5 / b 0 Consumer i n d e b t e d n e s s 6 / 10.8 7.3 3.5 9.7 9.2 .5 18.0 12.2 5.8 2.7 2.7 * | j 5.6 3.14 2.3 5.2 3.5 1.7 1 1 | 4.4 2.7 1.8 2.2 2.6 - .4 8. Change i n n e t c l a i m s (14+5+6-7) 10.6 11.3 8.1 1.7 3.5 | 3.3 5.0 9o Non-farm homes 7 / 10.9 12.5 15.3 3.1 3.9 2.9 .5 .5 9.8 7.8 17.5 16.2 2.6 4.2 1 16.8 1 15.4 • 7« -.3 1 I4.0 1 10o ^ f . "* • +\ k* 2.0 .v 1 o5 | »5 | 8.8 Consumer d u r a b l e goods 29.6 29.4 35.7 7.9 1 9.2 T o t a l g r o s s s a v i n g (8+9+10+11) 52.8 55.0 61.2 13.2 | 13.3 13o Change i n n e t c l a i m s e x c l u d i n g Government i n s u r a n c e ( 8 - 6 ) 7.3 8.6 U.9 1.3 , | 49.6 52.3 58.0 12.7 ! 17.2 | 2.5 1 | -I.I4 1 12.2 1 1 1 1 | 1 I 16.2 1 1 1 * I n d i c a t e s l e s s t h a n $50 m i l l i o n 0 l / l n c l u d e s u n i n c o r p o r a t e d b u s i n e s s sgiving of t h e t y p e s s p e c i f i e d . Figures a r e rounded and w i l l n o t n e c e s s a r i l y add t o t o t a l s . The f o r e g o i n g d a t a have been compiled by t h e Commission from many d i f f e r e n t s o u r c e s . Because of t h e n a t u r e of t h e f i g u r e s , c u r r e n t d a t a a r e n e c e s s a r i l y e s t i m a t e s and, t h e r e f o r e , a r e s u b j e c t t o r e v i s i o n „ 2 / l n e l u d e s s h a r e s and d e p o s i t s i n c r e d i t unions and P o s t a l S a v i n g s System, 3 / A f t e r d e d u c t i n g change i n bank l o a n s made f o r t h e p u r p o s e of p u r c h a s i n g or c a r r y i n g s e c u r i t i e s . U / l n c l u d e s S o c i a l S e c u r i t y f u n d s and s t a t e and l o c a l r e t i r e m e n t systems«, ^ / M o r t g a g e d e b t t o i n s t i t u t i o n s on o n e - t o f o u r - f a m i l y nonfarm d w e l l i n g s 0 ^/Consumer d e b t owed t o c o r p o r a t i o n s , l a r g e l y a t t r i b u t a b l e t o p u r c h a s e s of a u t o m o b i l e s and o t h e r d u r a b l e consumers goods, a l t h o u g h i n c l u d i n g some d e b t a r i s i n g from p u r c h a s e s of consumption goods . The o t h e r segments of i n d i v i d u a l s ' d e b t have been a l l o c a t e d t o t h e a s s e t s t o which t h e y p e r t a i n , v i z . , s a v i n g i n i n s u r a n c e and s e c u r i t i e s . ^ / C o n s t r u c t i o n of one- t o . f o u r - f a m i l y nonfarm d w e l l i n g s l e s s n e t a c q u i s i t i o n s of p r o p e r t i e s by n o n - i n d i v i d u a l s 0 NOTE: . | 1.9 12. Total gross saving excluding Government i n s u r a n c e ( 1 2 - 6 ) | 1 1.5 11o H4 0 * C o n s t r u c t i o n and equipment of non-profit institutions ! S e v e r a l changes w h i c h were made r e c e n t l y i n t h e f o r m and p r e s e n t a t i o n of t h e above d a t a a r e d e s c r i b e d i n S t a t i s t i c a l R e l e a s e No. 1379.
@FedFRASER