Full text of E.8 Volume and Composition of Individuals' Saving : December 1965

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'Resesve m
LIDRARY

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For Release

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
ib'UJ
WASHINGTON,D C. 2 0549

December 21. 1965

STATISTICAL

SERIES

release NO.

2096

VOLUME AND COMPOSITION OF INDIVIDUALS* SAVING, JULY-SEPTEMBER 1965
Individuals saved $10.7 billion in financial form 1/ during the third
quarter of 1965, according to estimates made public today by the Securities
and Exchange Commission. This was a record quarterly total for the post-war
period, exceeding the previous high in the fourth quarter of last year by
$2.2 billion. The high rate of saving reflected the sharp rise in disposable
personal income not completely offset by increased consumer expenditures.
The principal development in the pattern of saving in the third quarter
was a large rise in individuals' bank deposits, including checking accounts
and savings deposits. During the period individuals' indebtedness, an offset
to saving, grew much less than usual primarily because of large repayments of
securities loans by brokers and dealers (included in this series as "individuals"). Among other categories of saving, there was lower investment than in
the second quarter in savings and loan association shares, corporate and
tax-exempt bonds, and government insurance. Net sales of stock, other than
investment company issues, continued heavy for the fourth consecutive quarter.
Saving in currency and deposits in the third quarter totaled $7.9 billion,
comparing with $5.0 billion in the preceding quarter and a high of $8.2 billion
in the fourth quarter of last year. Time and savings deposits grew by $4.2
billion, or only slightly less than during the first three months of this year
when higher interest rates on these deposits went into effect. The expansion
in currency and demand deposits of individuals amounted to $3.7 billion in the
third quarter, or one billion dollars larger than in the similar period of 1964.
Social Security checks issued in September to cover the retroactive increase in
benefits possibly contributed to the rise in these accounts. Investments in
savings and loan associations and credit unions totaled $1.4 billion in the
third quarter, or approximately one billion dollars less than in the preceding
quarter and $700 million less than in the same three months of 1964.
Individuals' ownership of U. S. Government marketable securities rose by
$1.1 billion during the third quarter, half of the increase representing nonguaranteed federal agency issues. Net purchases of U. S. Saving Bonds, series
E and H, amounted to $100 million, the smallest amount since the second quarter
of 1960. Net acquisitions of tax-exempt bonds totaled $500 million, half as
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.

-2-

S-2096

much as in the preceding quarter when a larger amount of these obligations was
offered. Individuals' net purchases of corporate debt issues totaled $700
million as compared to $1.2 billion during the preceding period and no change
during the third quarter of 1964. This year a record volume of new corporate
debt issues has been marketed, including a substantial amount of convertible
issues; while financial institutions have acquired the major part of the
increased supply, individuals' acquisitions have been greater than at any other
time.
Individuals' ownership of preferred and common stock, other than investment company shares, decreased by $1.6 billion, the largest quarterly decline
to date. Contributing to the decrease were the continued large acquisitions
of common stock by financial institutions, the low level of new stock issues,
and larger retirements of outstanding issues. Individuals' net purchases of
investment company shares amounted to $600 million, $100 million above the
figure for the third quarter of 1964.
Equity in private insurance and pension reserves increased $3.5 billion,
10 percent more than the preceding quarter. Equity in government insurance
and pension reserves grew $1.0 billion compared with $1.9 billion in the same
period last year and $3.6 billion during the seasonally high second quarter of
this year.
Individuals' mortgage indebtedness increased $4.1 billion, the rise
accompanying increased investment in housing by individuals. Consumer credit
of individuals rose $2,3 billion during the third quarter as compared to $3.4
billion in the preceding period and $1.6 billion in the third quarter of 1964.
The slackening in the recent period was reflected in both installment and noninstallment debt. While new automobile loans were almost as high as the record
figures of the preceding quarter, the volume of repayments also was greater.
Borrowing on securities by individuals declined $2.0 billion during the quarter,
the sharpest drop in any quarter of the post-war period. The decrease was
largely attributed to liquidation of loans by dealers and brokers .
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. The Federal
Reserve Board's flow-of-funds system of accounts includes estimates of gross
saving and net financial investment of households. A comparison of the Securities and Exchange Commission estimates and the Department of Commerce series,
which recently has been revised, is being prepared.

S A V I N G S BY INDIVIDUALS IN THE UNITED STATES 1/
1962 — 1965
(Billions of dollars)
1962

1963

1964

1964
JulySept.

Type of Saving

b.
2.

Time and savings deposits

Savings shares 2/

U. S. savings bonds
(1) Series E & H....
(2) Other.

(2) Investment company shares 4/
(3) Other preferred and crin—nn stock....

c.
5.

Mortgage debt 7/

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

!
17.5

19.8

5.7

8.2

1.9

3.1
14.9

6.6
10.9

7.4
12.4

2.7
3.0

'
|

4.9
3.3

-2.7
4.6

*
1/
2/
3/
4/
5/
6/
7/
8/
9/
10/

i
i
,

5.0

|
!

11.8

11.3

2.1

3.5

2.1

- .9

4.4

1.4

'
1

1.5

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

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

1.2
- .3
2.4
1.7
- .6
.3
1.8
-2.7

.3
- .1
1.1
.4
- .3
*
.5
- .7

'
1
,
I
j

.3
- .1

1
j

.1
- .3
-5
.6
-1.4

.3
"-I
1.3
- .1

10.8

11.2

12.9

3.0

3.6

5.0
1.4
4.4

4.9
1.7
4.7

5.6
2.0
5.4

1.3
.5
1.2

3.0

4.4

5.4

1.9

19.6

23.2

22.1

5.6

13.4
5.0
1.1

15.9
6.3
.9

15.6
6.5
.1

21.2

22.3

31.8

8.5

17.9

18.3

18.8

4.6

3.8
1.6
.3

Construction and equipment of nonprofit
Consumer durable goods.

1965
Apr.June

10.0

3.5
10.

Jan.Mar .

18.0

Government insurance and pension

Noninsured pension funds 5/

Oct.Dec.

3.7

4.1

1.1

48.4

52.1

56.9

13.1

91.1

96.3

111.6

27.4

3.6

'
1
j
,
1
1

6.9

2.8

j"
1
|
1

!
|

1.9
3.1

3.4
- .4
- .1

7.9

3.7
4.2

2.5

j
'

.2
" 1
.4
1.0

.6
-1.2
3.2

J
;
1
|
1

1.3

.1
" .1
l.l
,5
"
.6
-1.6
3.5

1.2
.5
1.4

'
|

1.6
.5
1.4

3.6

i
|

1.0

7.9

4.4

3.8
3.4
.7

4.1
2.3
-2.0

1
|

8.5

6.7

[

8.3

5.2

4.5

4.1

10.7
|

4.8

1.1

1.0

16.9

14.5

15.8

31.6

26.6

29.3

1.1
14.8

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 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 revisions.
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 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 corporations, largely attributed 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.
0oe«to-four-family n o e f a m dwellings.

1.4

;

4.2
3.0
-.3

2.0

. 8 |
-1.1
j

1.6
.5
1.5

! July| Sept.

31.3

Full text of E.8 Volume and Composition of Individuals' Saving : December 1965

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