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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,D.C. 2 0549
For Release

May

16,

1968

STATISTICAL SERIES

release NO.

2282

VOLUME AND COMPOSITION OF INDIVIDUALS' SAVING IN 1967
Net financial saving by individuals in the United States rose to a new
high in 1967, according to estimates made public today by the Securities and
Exchange Commission. Individuals increased their financial assets by $62 1/2
billion while the gain in individuals' debt, an offset to saving, amounted to
$15 billion, the smallest debt increase since 1961. As a result, net financial
saving by individuals amounted to $47 1/2 billion, up approximately $19 billion
from the 1966 rate of saving.
There was a return to the more normal pattern of individuals' saving
during 1967, as individuals shifted from being direct suppliers of funds to
the financial markets to the traditional financial intermediaries such as
commercial banks and saving institutions. While these changes did not produce
a change in the rate of saving, the reduced rate of individuals' spending,
relative to income, was a major factor in the rapid expansion of saving last
year. The slower pace of spending by individuals on durable goods was reflected in a lessened increase in the expansion of consumer debt. Mortgage
debt expansion in 1967 also advanced less rapidly than in earlier periods,
reflecting the slowdown of spending on new housing. The table below provides
a comparison of the annual savings flows:
Calendar years
(Billions of dollars)
Saving in:

1964

1965

1966

1967

Cash and deposits
Securities
Insurance & pension reserves
Total financial saving
Less increase in debt
Equals net financial saving

30.7
6.3
16.2
53.2
23.2
30.0

32.8
3.9
18.1
54.7
24.3
30.4

15.9
13.7
18.0
47.6
18.9
28.8

40.9
1.5
20.0
62.4
14.8
47.6

Asset Changes
As may be seen, during the year individuals increased their holding of
cash-type assets at an extremely rapid rate. The expansion of individuals'
bank deposits during 1967 was the largest on record. Time and savings deposits
grew $20 billion, as compared to a moderate increase of $12.5 billion in the
previous year, and a growth of $16 billion in 1965. Holdings of currency and
demand deposits increased by more than $9 billion, as compared to a decline in
the preceding year. Net inflows to savings and loan associations and credit
unions rose $11 1/2 billion during the year, the largest since 1963, resulting,
in part, from the improved competitive position of those institutions.



- 2-

S-2282

The greatly reduced net purchases of securities in 1967 represented steppedup net liquidation of holdings of corporate stock other than investment company
shares. Net sales of these securities amounted to $8.8 billion in 1967, the
largest to date, and the tenth consecutive year in which individuals have sold
stock on balance. Individuals continued to buy investment company shares at
the high rate prevailing in 1966, and net saving in these securities amounted
to $4.6 billion. They also purchased a large amount of corporate debt securities during 1967 — $ 4 . 8 billion as compared with $2.8 billion in 1966—perhaps
reflecting the record amount of convertible debt securities offered during the
year and acquired small amounts of tax-exempt issues. However, individuals
were net sellers of U.S. Government marketable obligations.
Individuals' equity in both Government and private insurance and pension
reserves increased moderately during the year. Net inflow to noninsured pension
funds increased steadily throughout the year and amounted to a record $6.9
billion. 1/
Individuals' Debt
The growth in individuals' liabilities was the smallest since 1961, amounting to less than $15 billion. Mortgage debt, mirroring the weak recovery of
the housing market, grew less rapidly than in recent years. Consumer credit
had the smallest expansion in six years as the extension of automobile credit
dropped while repayments continued to grow. Securities loans increased $1.2
billion, partly reflecting the active market during the year.
Quarterly Trends
Net financial saving during the fourth quarter of 1967 totaled $11.2 billion, $4 billion less than in the third quarter but $3.5 billion more than in
the comparable period of 1966. Individuals increased their financial assets
by $18 billion during the quarter and their indebtedness rose seasonally to a
high of $7 billion. Bank deposits and saving shares showed the largest gain
among forms of saving in the fourth quarter.
Ownership of Financial Assets
The estimates of financial saving discussed previously and shown in Table
1 do not reflect changes in market values. In Table 2, however, rough estimates
of the market values of accumulated financial assets and liabilities of individuals are presented for the years 1963-1967. At the end of 1967 individuals'
financial assets totaled $1,513 billion, $160 billion higher than a year ago.
This increase, in addition to the high rate of saving, primarily reflected the
rise in stock prices as the market advance during the year added an estimated
20 percent to the value of individuals* stockholdings. Other securities held
included $83 billion of U.S. Government obligations, $42 billion of tax-exempt
securities, $25 billion of corporate debt and $58 billion of investment company
shares. Insurance and pension reserves totaled over $308 billion, while currency, bank deposits and savings shares comprised $444 billion at year-end.

l_!

See S.E.C. release, Private Noninsured Pension Funds, 1967.




-3-

S-2282

Offsetting their holdings of financial assets, individuals1 liabilities
added up to $323 billion, and consisted of $222 billion in mortgage debt, $91
billion in consumer debt and $10 billion in borrowing for purchasing or carrying securities.

Other Concepts of Saving
There are other concepts of individuals1 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
included estimates of gross saving and net financial investment of households.




TABLE 1
SAVING BY INDIVIDUALS IN THE U N I T E D STATES 1/
1964 - 1967
(Billions of dollars)

1964

1965

1966

1967

1966
Oct. Dec.

1967
Mar.

Apr. June

JulySept.

Oct. Dec.

Type of Saving
1.

3.

Currency and demand deposits

Savings shares 2/

a.

b.
c.
d.

5.

U.S. savings bonds
(1) Series E & H
(2) Other
Other U.S. Government 3/
State and local government
Corporate and other
(L) Bonds and notes
(2)
Investment company shares 4/
(3) Other preferred and common stock

Private insurance and pension reserves

c.

Noninsured pension reserves 5/

6.

Government

insurance and pension reserves 6/...

7.

Increase in debt

(8+9+10)

7.0

7.3

-1.2

9.3

1.3

-.2

2.4

4.8

2.3

12.3

16.0

12.5

20.2

3.5

5.7

6.7

5.2

2.6

11.4

9.4

4.7

11.5

2.6

2.6

3.9

2.1

3.0

6.3

3.9

13.7

1.5

1.5

-.5

-6.4

3.6

4.7

1.2
-.3
3.3
1.9
.2
.6
2o 1
-2.5

.9
-.2
1.7
1.9
-.3
1.9
2.2
-4.4

1.0
-.4
8.0
3.2
1.9
2.8
4.5
-5.4

1.1
-.2
-1.2
1.3
.5
4.8
4. 6
-8.8

.3
-.1
.5
1.3
-.5
.3
1.2
-1.9

.3
-. 1
.4
-.7
-.5
.9
1.2
-2.6

.3
-. 1
-6.1
.6
-1.1
.8
1.0
-2.9

.3
*
2.3
.6
.5
1.9
.6
-2.1

.2
-.1
2.1
.9
1.6
1.2
1.7
-1.3

11.6

13.2

13.0

14.5

4.0

3.6

3.0

3.8

4.1

4.8
2.0
4.9

5.5
2.1
5.6

4.7
2. 1
6.2

5.4
2.2
6.9

1.3
.5
2.2

1.5
.6
1.6

.9
.6
1.5

1.4
.6
1.8

1.6
.6
2.0

4.5

4.8

5.0

5.5

1.4

1.1

1.4

1.4

1.5

23.2

24.3

18.9

14.8

6.8

-.3

2.7

5.4

7.0

15.6

15.2

11.8

9.5

2.4

1.8

1.7

2.6

3.4

7.5

9.0

6.5

4.1

2.8

-1.9

1.9

1.1

3.0

.1

.5

1.2

1.5

-.2

-.9

1.7

.6

30.4

28.8

47.6

7.5

12.5

8.3

15.5

11.2

. 1

Net

*
1/

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 m a n y different sources.
Because of the nature of the figures,
current data are necessarily estimates, 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 funds, includes reserves of nonprofit organizations and m u l t i - e m p l o y e r plans.
Includes 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.
Policy loans on life insurance have been deducted from that item of saving.
Change in bank loans to brokers and dealers and others made for the purpose of purchasing or carrying securities.

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

financial saving




(1+2+3+4+5+6-7)

30.0

11.

TABLE 2

FINANCIAL ASSETS AND LIABILITIES OF INDIVIDUALS IN THE UNITED STATES
Year-end 1963 - 1967
(Billions of dollars)

Financial Assets

1963

1964

1965

1966

1967

89.6

96.8

104.2

103.0

112.3

136.2

148.6

164.7

177.2

197.4

97.3

108.6

118. 1

122.8

134.3

1.

Currency and demand deposits

2.

Time and saving deposits

3.

Savings shares

4.

Securities
a. U.S. savings bonds
b. Other U.S. Government 1/
c. State and local government....
d. Corporate and other 1/
(1) Bonds and notes
(2) Investment company shares.
(3) Other preferred and common
stock

617.7
48.0
28.4
32.9
508.3
21.5
34.8

686.8
49.0
30.2
35.3
572.3
22.4
39.8

735.0
49.6
30.4
37.1
617.9
22.5
46.4

665.2
50.1
37.3
40.4
537.4
23.2
44. 1

761.3
51.0
32.4
41.6
636.3
25.2
57.6

452.0

510.1

549. 1

470.0

553.5

Private insurance and pension
reserves
a. Insurance reserves
b. Insured pension reserves
c. Noninsured pension reserves...

178.2
100.2
23.3
54.6

193.7
105.1
25.2
63.4

209.3
110.5
27.3
71.4

214.9
114.5
29.4
71.0

236.0
120.6
31.6
83.8

52.3

56.8

61.6

66.7

72.1

1,171.2

1,291.4

1,393.0

1,349.7

1,513.4

221.6

5.

6.
7.

Government insurance and pension
reserves
Total financial assets
(1 through 6)

Liabilities
8.

Mortgage debt

167.0

182.6

200.1

210.1

9.

Consumer debt

63.9

71.4

80.4

87.0

91. 1

8.1

8.2

8.4

8.9

10.1

10.

Securities loans

11.

Total liabilities (8+9+10)

239.0

262.3

288.9

306.0

322.8

Total individuals' net equity 2/ (7-11)..

932.2

1,029.1

1,104.1

1,043.8

1,190.6

1/
2/

Estimated market value. Nonguaranteed Federal agency issues are included with U.S.
Government issues.
The year to year changes in the above data are not equivalent to individuals' saving
which does not reflect revaluations in certain of the components.