In the first quarter of 2010, in both the euro area (EA16) and the EU27, the seasonally adjusted household saving rate and the household investment rate decreased. In the euro area, household disposable income fell by 0.6% 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 down in both zones for the third quarter in a row

In the first quarter of 2010, the seasonally adjusted gross saving rate of households was 13.0% in the EU27, compared with 13.4% in the fourth quarter of 2009. In the euro area, the household saving rate was 14.6% in the first quarter of 2010, compared with 15.0% in the previous quarter.

Household saving rate (seasonally adjusted)

Household real disposable income in the euro area fell for the third quarter in a row

In the euro area, the fall in the household saving rate was due to real disposable income6 decreasing faster (-0.6%) than real final consumption expenditure (-0.1%). Real disposable income dropped because nominal disposable income fell (-0.2%), while the prices of goods and services consumed by households increased (+0.4%), as shown in table 3.

Real growth of household gross disposable income and final consumption expenditure (euro area)(seasonally adjusted data, change compared to the previous quarter)

The decrease (-0.2%) in household nominal disposable income was mainly due to small negative contributions from compensation of employees (wage costs), net property income & other current transfers and taxes (-0.1 percentage points each), while net social benefits had a small positive impact (+0.1 pp).

Contributions of components to the growth of nominal household gross disposable income(euro area)(seasonally adjusted data, change compared to the previous quarter)

Household investment rate still decreasing in both zones

In the EU27, the gross investment rate of households7 was 7.7% in the first quarter of 2010, compared with 8.0% in the fourth quarter of 2009. In the euro area, the household investment rate was 8.7% in the first quarter of 2010, compared with 8.8% in the previous quarter.

Household investment rate (seasonally adjusted)

In the euro area, the decrease in household investment rate was due to gross fixed capital formation (investment, mostly in dwellings) falling faster in nominal terms (-2.2%) than nominal disposable income (-0.2%).