In the fourth quarter of 2010, in both the euro area (EA16) and the EU27, the household saving rate continued to decrease, while the household investment rate remained almost stable at low levels. In the euro area, household disposable income fell by 0.1% in real terms, after an increase of 0.1% in the previous quarter.

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

Household saving rate decreasing further in both zones

In the fourth quarter of 2010, the gross saving rate of households was 11.3% in the EU27, compared with 11.6% in the third quarter of 2010. In the euro area, the household saving rate was 13.4% in the fourth quarter of 2010, compared with 13.6% in the previous quarter. The saving rates for the fourth quarter of 2010 were the lowest since the first quarter of 2006 in the euro area and since the third quarter of 2008 in the EU27.

Household real disposable income and real final consumption nearly stable in the euro area

In the euro area, the drop in the household saving rate was due to real disposable income6 decreasing slightly (-0.1%), while real final consumption expenditure recorded a small increase (+0.1%). Real disposable income decreased because the growth of nominal disposable income (+0.5%) was lower than the growth of prices of goods and services consumed by households (+0.6%).

The increase in household nominal disposable income (+0.5%) was mainly due to compensation of employees (wages and social contributions) which accounted for +0.4 percentage points (pp), while net property income had a downward impact (-0.2pp).

Household investment rate still at low levels in both zones

In the EU27, the gross investment rate of households was 8.0% in the fourth quarter of 2010, compared with 8.1% in the previous quarter. In the euro area, the household investment rate was 8.8% in the fourth quarter of 2010, compared with 8.9% in the previous quarter.

In the euro area, the slight decrease of the household investment rate was due to investment (gross fixed capital formation, mostly in dwellings) falling (-0.4%), while nominal disposable income grew (+0.5%).