JPM Euro area Saving rate

J P M O R G A N Europe Economic Research 28 July 2026

Euro area: Saving rate stable in 1Q, set to edge lower in 2Q

Eurostat has recently released household balance sheet data for 1Q26 as part of the Economic and Policy Research household sectoral accounts. As usual, the release arrives with a considerable lag, Mariana Monteiro is prone to revisions, and can diverge from the national accounts over short ( horizons (though annual changes tend to be more aligned). Even so, we monitor it closely as a cross-check on household saving behavior. J.P. Morgan Securities plc

Nominal gross disposable income (GDI) growth decelerated by 0.5%-pt to 3.0% q/q saar, below our expectation of a 3.7% q/q saar increase. With consumer prices up 3.6% q/q saar, real disposable income appears to have fallen by 0.6% q/q saar. National accounts data showed consumption growing at a 1%ar in 1Q, consistent with households initially smoothing the shock by drawing down savings. However, household final consumption expenditure in the sectoral accounts fell at a 0.4%ar, leaving the saving rate – the share of income set aside – unchanged at 14.3% of GDI. Still, we continue to expect households smoothed the income squeeze from higher energy prices in 2Q: our baseline implies a sharp contraction in real disposable income, even as consumption indicators are tracking a positive increase.

Labour income adjusted for taxes and social contributions – the main component of GDI (see here for details on our special aggregates) – firmed to a 3.3%ar. Gross mixed income and compensation of employees both rose at a 3.6%ar, while self- employment income rebounded as well, albeit at a slightly softer 2.7% q/q saar. With the number of employees up only 0.1% q/q saar in 1Q, growth in compensation of employees was driven primarily by compensation per employee, which appears to have accelerated to 3.5% q/q saar versus 2.3% q/q saar in the national accounts (though over-a-year-ago growth is similar in both sources, at roughly 3.5%). Social security contributions, which have been a drag on labour income, rose more modestly in 1Q, though still at a 4% annualized pace.

Elsewhere, financial income growth stepped down sharply to 0.8%ar, amid rising interest payments. Transfer income (i.e., social benefits – primarily pensions and, in downturns, unemployment benefits) continued to grow at a brisk 4%ar pace, even as unemployment remained at historically low levels.

See page 5 for analyst certification and important disclosures.

Mariana Monteiro Europe Economic Research ( July 2026 JPMORGAN

Euro area household income and spending €bn, % and %oya Q25 3Q25 4Q25 1Q26 €bn %q/q, saar Income sources (+) Compensation of employees ( Gr. Operating surplus ( Self-empl. Income ( Social benefits ( Net interest income ( ow: Interest income (+) ow Interest cost (-) Dividend/insurance income ( Net current transfers ( Deductions (-) Taxes ( Social security contrib. ( Disposable inc. (=) Consumption (-) Pension Fund equity (+) Gross saving (=) Saving rate (%) Special post-tax aggregates (*) Labour income (1 Financial income (2+5 Transfer income (4 Real GDI 2.8 -0.7 1.0 -0.6 Real consumer spending (sec. account) 2.5 1.0 2.2 -0.4 Source: Eurostat, J.P. Morgan estimates. (*) Taxes deducted from each special aggregate on a pro-rata basis.

Nominal gross disposable income % 15 %oya %q/q, saar Source: Eurostat, J.P. Morgan