In the second quarter of 2010, in both the euro area (EA16) and the EU27, the seasonally adjusted household saving rate continued to decrease while the household investment rate recovered slightly. In the euro area, household disposable income fell by 0.3% in real terms.

These data come from a detailed set of quarterly European sector accounts released by Eurostat, the statistical office of the European Union, and the European Central Bank (ECB).

Household saving rate still decreasing in both zones

In the second quarter of 2010, the seasonally adjusted gross saving rate of households was 12.1% in the EU27, compared with 12.9% in the first quarter of 2010. In the euro area, the household saving rate was 14.3% in the second quarter of 2010, compared with 14.5% in the previous quarter.

Household real disposable income fell in the euro area

In the euro area, the fall in the household saving rate was due to real disposable income decreasing faster (-0.3%) than real final consumption expenditure (-0.1%). Real disposable income dropped because nominal disposable income increased more slowly (+0.5%) than the prices of goods and services consumed by households (+0.8%).

The increase (+0.5%) in household nominal disposable income was mainly due to compensation of employees (wages) and gross operating surplus (together with mixed income which accrues to self-employed households), which contributed +0.5 and +0.2 percentage points (pp) respectively. Taxes also had a small positive impact (+0.1 pp), while net social benefits had a negative impact (-0.2 pp).

Household investment rate recovered slightly in both zones

In the EU27, the gross investment rate of households was 8.1% in the second quarter of 2010, compared with 7.9% in the first quarter of 2010. In the euro area, the household investment rate was 8.9% in the second quarter of 2010, compared with 8.8% in the previous quarter.

In the euro area, the increase in household investment rate was due to gross fixed capital formation (investment, mostly in dwellings) growing faster in nominal terms (+1.4%) than nominal disposable income (+0.5%).