Full text of E.8 Volume and Composition of Individuals' Saving : October 1968

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U N I T E D STATES
SECURITIES A N D E X C H A N G E COMMISSION
WASHINGTON,D C. 20549
For Release

October

15.

1968

STATISTICAL SERIES

RELEASE NO.

2316

VOLUME AND COMPOSITION OF INDIVIDUALS' SAVING, APRIL-JUNE, 1968.
Individuals1 net financial saving amounted to $1.2 billion in the second
quarter of 1968, according to estimates made public today by the Securities
and Exchange Commission. This compares with $5.6 billion during the first
three months and $8.3 billion during the same period last year. These estimates have not been adjusted for seasonal influences and reflect the high
rate of consumption expenditures for this time of the year as well as the
settlement of 1967 Federal income taxes early in the quarter. Seasonally
adjusted estimates of saving indicate a gain in saving during the quarter
over the preceding period.
During the first six months of 1968, individuals' net financial saving
grew by $6.8 billion. The half-yearly comparisons below highlight the major
changes in individuals' saving:
First half-year
(Billions of dollars)
Saving in:

1965

1966

1967

1968

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

11.6
2.7
8.5
22.8
11.1
11.7

5.7
7.5
8.5
21.6
9.3
12.4

21.0
-6.9
9.2
23.2
2.4
20.9

5.5
- .3
10.0
15.2
8.4
6.8

Asset Changes
These estimates, unadjusted for seasonal influences, show a contraction
in all forms of liquid saving by individuals. There was a decline in currency
and demand deposits amounting to $7 billion during the first part of the year,
compared to a greater than seasonal increase in these assets during the first
six months of 1967. The rate of accumulation in savings accounts declined
when compared with the growth in these accounts for the first half of 1967.
Investment by individuals in savings and loan associations and credit unions
rose $4 billion; this was $2.5 billion less than in the comparable period of
1967.
The moderate reduction in security investments during the January-June
period consisted of the net sale by individuals of corporate stock, other
than investment company shares, which was offset by continued investment in
debt securities and mutual fund shares. In the first six months, individuals
ownership of U. S. Governments increased and they also added $2.1 billion to
their portfolio of tax-exempt issues. Individuals bought corporate debt issues



S-2316

on balance. During this period there were large offerings of convertible
debentures. Individuals had net sales of corporate stock, other than investment company shares, of $6.2 billion in the first six months of the
year. During the same period corporations sold $170 million of new stock,
net of retirements. Private noninsured pension funds, mutual funds and
insurance companies acquired $5.1 billion of stock on balance during this
period with the remaining supply being absorbed by other institutional
investors and foreigners. Net purchases by individuals of investment company shares amounted to $2.3 billion in the January-June period, compared
with $2.2 billion in the first half of 1967.
In the first half of 1968, individuals increased their equity in life
insurance at about the same pace as they did a year ago. Private pension
reserves expanded by $5 billion as compared to $4.2 billion during the same
period last year. The growth in government insurance and pension reserves
was also higher than last year as state and local retirement funds continued
their steady rise, accounting for approximately two-thirds of the increase
in government insurance and retirement reserves.
Individuals' Debt
Total indebtedness rose in the first six months, the gain amounting to
$8.4 billion. The amount of home mortgages outstanding increased $6.9
billion during the first half of 1968. In the comparable period last year
the growth was $3.5 billion. Consumer credit also increased sharply, in
contrast to a zero balance during the same period in 1967. Contributing
to the growth of consumer debt was the largest increase in automobile
financing since the first half of 1965. Borrowings on securities by individuals declined by $700 million during the first part of 1968. The
comparable period last year showed a $1.1 billion decrease.
Other Concepts of Saving
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 appeared in the July issue of
the Department's Survey of Current Business and the August issue of the
Commission's Statistical Bulletin.




CHANGES IN SAVINGS BY INDIVIDUALS IN THE UNITED STATES V
1966 - 1968

( B i l l i o n s of D o l l a r s )
1966

1967

1967
Jan.Mar.

Apr.June

JulySept.

Oct.Dec.

1968
Jan. Apr.Mar.
June

Type of Saving
1.

-1.2

9.3

- .2

2.4

4.8

2.3

-7.8

.8

2,

12.5

20.2

5.7

6.7

5.2

2.6

5.0

3.5

3.

4.7

11.5

2.6

3.9

2.1

3.0

1.6

2.3

4.

13.7

1.5

- .5

-6.4

3.6

4.7

2.5

-2.8

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
.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

.1
2.0
.1
.2
.4
1.6
-1.7

.1
.1
-1.8
2.0
-3.0
.8
.7
-4.5

13.0

14.5

3.6

3.0

3.8

4.1

3.9

3.2

4.7
2.1
6.2

5.4
2.2
6.9

1.5
.6
1.6

.9
.6
1.5

1.4
.6
1.8

1.6
.6
2.0

1.3
.7
1.9

.8
.7
1.7

5.0

5.5

1.1

1.4

1.4

1.5

1.4

1.5

18.9

14.8

- .3

2.7

5.4

7.0

1.1

7.3

3.5

3.4

a.

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

(2)
(3)
5.

6.

Investment company shares 4/...,..
Other preferred and common stock..

Private insurance and pension reserves

Government insurance and pension reserves 6/

7.
8.

11.8

9.5

1.8

1.7

2.6

3.4

9.

6.5

4.1

-1.9

1.9

1.1

3.0

-1.0

3.2

10.

.5

1.2

- .2

- .9

1.7

.6

-1.4

.7

11.

28.8

47.6

12.5

8.3

15.5

11.2

5.6

1.2

*
JL/

If
3/
4/
5/
6/
JJ
8/
9f

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 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 multi-employer 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 che purpose of purchasing or carrying securities.