Eurozone consumers turning cautious - ABN AMRO

Analysts at ABN AMRO point out that details of the consumer sentiment survey show that participants planned to increase their savings during the next twelve months.

Key quotes:

"Eurostat published its quarterly Eurozone sector accounts today. They showed that the savings rate of households (gross savings divided by gross disposable income, and therefore the flipside of private consumption) jumped to its highest level in more than four years in 2019Q1, rising to 12.6%, up from 12.1% in 2018Q4."

"This rise in savings seems to mainly reflect higher precautionary savings. Indeed, the details of the European Commission’s consumer sentiment survey show that consumer confidence has fallen since the middle of 2018, particularly because consumers became less positive about the economic outlook and the prospects for the labour market."

"The rise in the savings rate, combined with our expectation that employment growth will slow down in the coming quarters, suggest that private consumption will grow modestly throughout this year."