Full text of E.8 Volume and Composition of Individuals' Saving : December 1964

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UNITED STATES
SECURITIES A N D E X C H A N G E COMMISSION
WASHINGTON,D C.

2 0549

For R e l U i s e D e f c & i n b e r 2 1 , 1964

STATISTICAL SERIES

RELEASE NO.

2019

VOLUME AND COMPOSITION OF INDIVIDUALS' SAVING, JULY-SEPTEMBER, 1964.
During the third quarter of 1964 individuals in the U. S. continued to save
at a high rate, although at a lower rate than the preceding quarter if adjusted
for seasonal influences. Saving in financial form \) totaled $8.3 billion, according to estimates released today by the Securities and Exchange Commission.
This was a record quarterly total for the post-war period, exceeding the preceding record figure in the second quarter by $700 million and the third quarter of
1963 by $1.5 billion.
Reflecting the tax cut and also the higher level of personal income, individuals' financial saving in the first nine months of this year was one-third
larger than in the same period of last year and aggregated $22% billion. The
increased saving has been largely directed into greater acquisitions of U. S.
Government marketable obligations and tax-exempt state and local issues, as
well as increased equity in private and government insurance and pension reserves . Other types of financial saving which have risen significantly include bank deposits and investments in mutual fund shares. While individuals
have continued as net sellers of stock other than mutual fund shares, the liquidation has been much less than during the first nine months of 1963, mainly
because of interest in two major stock offerings. Individuals' indebtedness,
which is an offset to saving, advanced more than during the first nine months
of last year, with greater expansion in both mortgage and consumer credit, but
a smaller rise in securities loans.
Largest gain in individuals' third quarter saving was in savings and checking accounts at banks, which rose $5.9 billion, $2.2 billion more than in the
preceding quarter, and $400 million more than in the 1963 third quarter. Of the
total increase in bank accounts, time and savings deposits accounted for $2.7
billion, $400 million more than the 1963 comparable period, with a record inflow
in deposits at mutual savings banks. Demand deposits and currency holdings of
individuals rose $3.2 billion, the same as in the third quarter of last year,
but $1.8 billion above the preceding quarter, reflecting seasonal factors.
Although saving in credit union and savings and loan association shares
declined seasonally in the third quarter to $2.0 billion as compared with $3.3
billion in the second quarter, the amount was a record for a third quarter
period. However, the nine months' inflow this year has been somewhat lower
than the peak investments of 1963.
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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Individuals (which in this series includes nonprofit institutions, brokers and dealers) increased their ownership of U. S. Government marketable securities by $1.4 billion in the third quarter, bringing their net acquisitions
of these issues for the first nine months of 1964 to $3.0 billion. This was
three times the amount acquired in the first nine months of last year, and reflected the favorable terms of the two advance refunding offers made in the
course of the year, and the generally higher level of yields.
Net purchases of D. S. Savings Bonds Series B and H amounted to $300 million, the same as in the preceding two quarters. Individuals' holdings of
state and local government issues increased $300 million, a lower amount than
in the preceding period; however, for the first nine months of 1964, individuals' net purchases of tax-exempt issues totaled $1.5 billion, compared with
$500 million in the same 1963 period.
Net acquisitions of investment company shares totaled $500 million during
the third quarter, the same as in the second quarter period. For the first nine
months of 1964 such investments have amounted to $1.2 billion, comparing with
the first three quarters of the preceding years as follows: 1963, $900 million;
1962, $1.6 billion; and $2.1 billion in the peak year 1961. This year redemptions of mutual fund shares have been greater than at any prior time, but new
sales have reached near-record levels. Individuals' net sales of common and
preferred stock, other than investment company issues, amounted to $800 million
in the third quarter. The liquidation in individuals' holdings over the first
nine months has totaled $1.5 billion, as against $2.7 billion in the 1963 period. The decrease has been less severe this year because the volume of new
stock offerings was swelled by the $1.2 billion A. T. & T. issue and the $200
million Comsat offering. During this year further increases have been indicated in net stock acquisitions of institutional investors and foreigners.
Holdings of corporate debt issues by individuals also declined during the
third quarter, reflecting a sharp drop in debt issues net of retirements. For
the first nine months of this year individuals' holdings of such issues were
reduced by $700 million compared with a drop of $200 million in the same period
of 1963.
Equity of individuals in private insurance and pension reserves together
increased $3.1 billion, slightly higher than the preceding quarter. Of this
increase, insurance reserves accounted for $1.3 billion, the same as the preceding quarter. There was a growth in noninsured pension funds of $1.3 billion in the third quarter, and for the first nine months it is estimated that
the increase was $3.8 billion compared to $3.4 billion in the similar 1963
period. Government insurance and pension reserves rose $1.9 billion, considerately less than in the second quarter which is the period when the selfemployed make their annual contributions to the old-age pension fund.
Indebtedness of individuals rose $5.9 billion in the third quarter, and
for the nine months increased a record $15.7 billion, or more than $500 million above the 1963 similar period. Although consumer indebtedness had reached
record levels by the end of September, in the third quarter the growth was less
than in the second quarter, $1.6 billion as compared with $2.6 billion. There
was a slackening of automobile financing during the model change-over period,
while repayments continued at record levels. The increase in individuals '
mortgage debt for the third quarter was estimated at $4.1 billion, unchanged
from the preceding quarter. However, the total for the first nine months was
$600 million greater than the 1963 comparable period, the larger amount primarily reflecting increased investment in new homes. 1 Securities loans increased $100 million in the third quarter with greater borrowing by dealers

(Continued on Page 4)

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SAVING BY INDIVIDUALS IN THE UNITED STATES 1/
1961 - 1964
(Billions of dollars)

1961

1962

1963
Jan.Mar.

Apr.June

1963
1 July| Sept.

Oct.Dec.

Jan.Mar.

1964
Apr.-

JulySept.

Type of Saving
8.7

18.0

17.5

3.2

2.3

|
|

5.5

6.5

2.0

3.7

- .2
8.8

3.1
14.9

6.6
10.9

- .6
3.8

3.2
2.3

4.2
2.3

- .8
2.8

1.4
2.3

3.2
2.7

9.4

10.0

11.8

3.2

3.3

1.7

3.7

2.5

3.3

2.0

- .9

- .3

1.5

1.1

1.7

1.3
- .5
-1.5
1.1
.5
.1
2.7
-2.3

.9
- .5
.6
.3
-2.2
- .2
1.8
-3.8

1.6
- .4
.5
1.5
-2.8
.2
1.2
-4.1

.4
- .1
1.9
- .7
- .4
.4
- .7

.4
- .1
- .4
1.0
- .8
.3
.3
-1.4

.3
- .1
1.1
.2
- .4
- .4
.3
- .4

.3
- .1
.5
1.0
.1
- .1
.5
- .3

10.2

10.8

4.4
1.4
4.4

U . S . savings bonds

(3) Other preferred and common stock
4.

Government insurance and pension

11.2

2.6

2.8

3.2

3.0

3.1

5.0
1.4
4.4

4.9
1.7
4.7

1.0
.4
1.2

1.3
.4
1.1

1.5
.4
1.3

1.2
.4
1.3

1.3
.4
1.2

1.3
.4
1.3

1.1

3.0

4.4

14.4

19.6

11.9
1.5
1.0

*13.4
5.0
1.1

1 - :i
':S
1

'
i

1.1

2.8

1.5

3.2

I"?

23.2

1.5

7.3

6.3

8.1

2.5

7.3

5.9

15.9
6.3
.9

3.5
- .7
-1.3

3.8
2.5
.9

1
j

4.0
1.5
.8

4.6
3.0
.5

3.7
- .7
- .6

4.1

7.6

4.2

4.6

1.0

1.1

13.1

27.2

2.6
.6

21.2

22.3

6.6

3.4

6.8

5.5

16.8

17.9

18.3

4.4

3.9

4.6

5.3

4.8

3.3

3.5

3.7

1.0

10.

43.7

48.4

52.1

11.4

12.9

11.6

16.2

12.6

14.2

11.

79.7

91.1

96.3

23.2

21.1

24.0

28.1

24.9

26.9

Construction and equipment of nonprofit

1 , 2

-l:2

15.9

5.9

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

6.5

i
I

1
4.1
! 1.6
.1
1 8.3

*
1/
-

have

2/
3/
4/
5/
6/
7/
8/
9/

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 fundo, includes reserves of nonprofit organization and multi-employer 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 eorpoxsfcicns, 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.
Changs in tank loans to bwoksre sad dealers and others made for the purpose of purchasing or carrying securities,

10/

Indicates less than $50 million.
Includes unincorporated business saving of the types specified. Figures are rounded and will not necessarily add to totals. The foregoing data
been compiled by the Commission from many different sources. Because of the nature of the figures, current data are necessarily estimates,

Construction of one-to-four-family nonfarm dwellings.

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to finance their inventories of U. S. Government obligations partly offset by
a 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.

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Full text of E.8 Volume and Composition of Individuals' Saving : December 1964

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