投行报告-欧洲经济分析师：欧元区消费将逐步复苏 Euro Area-Consumption to Recover More Gradually

18September2024|4:30PMBST

EuropeanEconomicsAnalyst

EuroArea—ConsumptiontoRecoverMoreGradually

(Stott/Vashkinskaya)

nOneofthemoststrikingfeaturesofthiscycleintheEuroareahasbeentheabsenceofanimprovementinhouseholdconsumptiondespitethereboundinrealincome.Orconversely,thehouseholdsavingrateincreasedafurther2ppoverthelastthreequarters,wellaboveourandECBstaffexpectations.We

thereforerevisittheoutlookforhouseholdincome,savings,andconsumption.

nWeexpectrealdisposableincomegrowthtodeceleratetotrendbyearly2025,asthecatch-upofhouseholdrealincomecompletes.Non-wageincome—whichincludessourcesofincomesuchasprofits,nettransfers,interestreceipts,anddividends—madeasignificantcontributiontoincomegrowthinQ1,butwearepencillinginmoreconservativeassumptionsgoingforward.Ourbasecaseisstillthattheprocessofrebalancinglabourandcapitalincomeconcludeswithout

derailingthereturnofinflationtotargetorofemploymentgrowthtotrend.

nTheincreaseinthehouseholdsavingrateinthefirsthalfofthisyearishardto

explaininourstandingframework,asthefundamentaldriversweconsider—

economicuncertainty,depositrates,andthegapofwealth-to-incometo

trend—alleitherstabilisedorimproved.Weseeseveralpotentialexplanationsfortherecentincreaseinthehouseholdsavingrate,includingstickyconsumption

behaviour,changesinthecompositionofincome,ahighersensitivitytodepositrates,andpost-pandemichabit-resets.Takentogether,wenowexpectthesavingratetomoregraduallydeclinetoahigherterminallevel.

nOurrevisedforecastsforincomegrowthandthesavingrateimplyasmall

sequentialpick-upinconsumptioninthesecondhalfoftheyear,beforereturningtotrendinearly2025.OurforecastisabovetheECBstaffprojectionsoverthe

nextfewquarters,asweexpectslightlyhigherincomegrowthandanearlierdeclineinthesavingrate.OurforecastforGDPgrowthisbelowtrendinthesecondhalfof2024,givensignificantweaknessinothercomponents.

SvenJariStehn

+44(20)7774-8061|

jari.stehn@

GoldmanSachsInternational

FilippoTaddei

+44(20)7774-5458|

filippo.taddei@

GoldmanSachsInternational

AlexandreStott

+33(1)4212-1108|

alexandre.stott@

GoldmanSachsBankEuropeSE-ParisBranch

JamesMoberly

+44(20)7774-9444|

james.r.moberly@

GoldmanSachsInternational

KatyaVashkinskaya

+44(20)7774-4833|

katya.vashkinskaya@

GoldmanSachsInternational

EuroArea—ConsumptiontoRecoverMoreGradually

OneofthemoststrikingfeaturesofthiscycleintheEuroareahasbeenthe

absenceofanimprovementinhouseholdconsumptiondespitethereboundinrealincome(Exhibit1,left).Orconversely,thehouseholdsavingrateincreasedafurther2ppoverthelastthreequarters(Exhibit1,right).

Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertificationandotherimportantdisclosures,seetheDisclosureAppendix,orgoto

/research/hedge.html.

GoldmanSachsEuropeanEconomicsAnalyst

Exhibit1:HouseholdIncomeGainsHaveOutpacedConsumption,ResultinginaHigherSavingRate

Ontheleft,disposableincomeinQ2isderivedfromourforecast.

Source:GoldmanSachsGlobalInvestmentResearch,HaverAnalytics

Thisweek’sAnalystthereforerevisitstheoutlookforhouseholdincome,savings,andconsumption.

RealIncomeGrowthPastthePeak

Wageincomeaccountsfor80%ofgrossdisposableincomeandhasbeenthemain

driverbehindtherecoveryinhouseholdrealincome.Compensation-per-employee

growthaveraged4.5%(annualised)inthefirsthalfofthisyear,andwelookforagradualdecelerationto3%bytheendof2025,asthe

catch-up

ofhouseholdrealincome

completes(Exhibit2,left).WeseerisksskewedtowardsafastercoolinginwagegrowththanprojectedbytheECBstaffinSeptember(Exhibit2,right).

Exhibit2:WeLookforaRapidDecelerationinWageGrowthasRealCatch-upCompletes

Source:GoldmanSachsGlobalInvestmentResearch,HaverAnalytics,ECB

Weforecastsequentialrealincomegrowthtomoderatetotrendbyearly2025(Exhibit3,left).Non-wageincome—whichincludessourcesofincomesuchasprofits,net

18September20242

transfers,interestreceipts,anddividends—madeasignificantcontributiontoincome

growthinQ1,butwearepencillinginmoreconservativeassumptionsgoingforward.

Employmentalsogrewrapidlyinrecentquarters—followingstrongparticipationand

immigrationgains—butisnowbackattrendaccordingtoourforecast.Realincome

growsattrendin2025inourforecast,butstandsabovetheECBstaffprojections,partlybecauseoflowerinflationassumptions(Exhibit3,right).

Exhibit3:WeForecastRealDisposableIncometoReturntoTrendby2025H1

Source:GoldmanSachsGlobalInvestmentResearch,HaverAnalytics,ECB

Ourforecastforhouseholdrealincomereflectstheendofacatch-upprocesswhichrebalancedtheregion’stotalincomelossesbetweencapitalandlabourincome.Ourbasecaseisstillthatthisprocessconcludeswithoutderailingthereturnofinflationtotargetorofemploymentgrowthtotrend.

SlowerandShallowerSavingRateDecline

Theincreaseinthehouseholdsavingrateinthefirsthalfofthisyearishardtoexplaininour

standingframework

.Thefundamentalsdriversweconsider—economicuncertainty,

depositrates,andthegapofwealth-to-incometotrend—alleitherstabilisedor

improved(Exhibit4,left).OurmodelhascontinuedpointingtowardsadecreaseinthesavingrateandissettobesurprisedtotheupsideagaininQ2basedonGermanandFrenchdatareleasedsofar(Exhibit4,right).

18September20243

Exhibit4:TheHistoricalDriversoftheHouseholdSavingRateDoNotExplaintheUptickinH1

Ontheleft,seriesarescaledsuchthatanincreaseimpliesahighersavingrate.

Source:GoldmanSachsGlobalInvestmentResearch,HaverAnalytics

Weseeseveralpotentialexplanationsfortherecentincreaseinthehouseholdsavingrate.

First,thetimingofrecentincreasesinthesavingratecoincidingwithlargerealincomegainspointstoapotentialroleforstickyhouseholdconsumptionpatterns.Intuitively,

householdscouldbeslowtorampuptheirconsumptionwhenfacedwithasudden

increaseinincome.Wefindsomeevidenceofsuchconsumptionsmoothingbehaviourinthecross-sectionofthefivelargestEuroareaeconomies,asanexogenousincreaseinrealincomecontemporaneouslybooststhesavingrate(Exhibit5,left).Ourestimatesimplythattherecentrecoveryinrealincomecouldhaveboostedthesavingrateby

0.6ppinthefirsthalfofthisyear(Exhibit5,right).Ourresultsalsoimplythatthistemporaryboostwouldfadeasrealincomereturnstotrendbyearlynextyear.

18September20244

Exhibit5:StickyHouseholdConsumptionBehaviourCouldbeTemporarilyBoostingtheSavingRate

Ontheleft,weshowtheimpulseresponseofthehouseholdsavingratetoanincreaseinincomegrowth,estimatedwithlocalprojectionsonanEA10panelbetween2000and2024.

Source:GoldmanSachsGlobalInvestmentResearch

Second,thecompositionofhouseholdincomegainsinthefirstquarteroftheyearlooksparticularlyconducivetoahighersavingrate.Theshareofnon-wageincomeincreased0.5ppandistypicallyassociatedwithalowerpropensitytoconsume(Exhibit6,left).Thetworeasonsforthisarethatnon-wageincomeistypicallyreceivedinlessliquidformsandtendstobeskewedtowardsricherhouseholds.Estimatesfromtheacademic

literaturewouldbeconsistentwithanadditional0.2ppboosttothesavingratefromthechangeinthecompositionofhouseholdincomeinQ1.Apermanentincreaseinthe

shareofnon-wageincomewouldcontributetoincreasingtheterminalsavingrate.

Third,theequilibriumlevelforthesavingrate—consistentwithfundamentaldrivers—couldbehigherthiscyclethanimpliedbyhistoricalpatterns.Forinstance,lookingatthecross-sectionofthefivelargestEuroareaeconomiessuggeststhatsavingratesweremoreresponsivetoincreasesindepositratessince2022(Exhibit6,right).Thehigher

sensitivityofhouseholdtodepositratescouldberelatedtothesalienceofpolicyrate

increasesoverrecentyears,whichbroughtdepositinstrumentsbackintothemainstream.Weestimatethatthischannelcouldcurrentlybepushinguptheequilibriumratebyupto0.6pp.

18September20245

Exhibit6:TheCompositionofIncomeandaHigherSensitivitytoDepositRatesareLikelyPushingtheEquilibriumSavingRateHigher

Ontheright,theslopeofthefittedlinesisequivalenttothepanelOLScoefficientofthesavingrateondepositratesaftercontrollingforcovariates.

Source:GoldmanSachsGlobalInvestmentResearch,HaverAnalytics

Fourth,weseereasonsforaresetinconsumptionhabitstoleavethesavingratehigherthanbeforetheCovidpandemic.Ourglobalteamhas

shown

thattheshortfallin

consumptioncomparedto2019ismostpronouncedforcategorieswhichunderwentlargedeclineduringthepandemic(Exhibit7,left).Intuitively,thereassessmentof

preferencesorspendinghabitspromptedbytheCovidpandemicmaybeweighingonspendingandboostingsavings.Thischannelwouldalsocontributetoincreasingtheterminalsavingrate.

Exhibit7:WeNowLookforaSlowerandShallowerSavingRateDecline

Ontheleft,bubblesizesareproportionaltocategoryweightsintheconsumptionbasket.

Source:GoldmanSachsGlobalInvestmentResearch,HaverAnalytics,ECB

Takentogether,wenowexpectthesavingratetomoregraduallydeclinetoahigher

terminallevel.Wearepencillingina0.3ppnormalisationinthesecondhalfofthisyeartoreflectfurtherimprovementinfundamentalsandsomeadjustmentinconsumptionbehaviour.WeassumeanearliernormalisationthaninECBstaffprojectionsbutamore

18September20246

gradualdeclineinto2025(Exhibit7,right)

ConsumptiontoRecoverMoreGradually

Ourrevisedforecastsforincomegrowthandthesavingrateimplyasequentialpick-upinconsumptioninthesecondhalfoftheyearbeforereturningtotrendinearly2025

(Exhibit8,left).OurforecastisabovetheECBstaffprojectionsoverthenextfew

quarters,asweexpectslightlyhigherincomegrowthandanearlierdeclineinthesavingrate(Exhibit8,right).

Exhibit8:WeForecastHouseholdConsumptiontoRunModeratelyAboveTrendin2024H2

Source:GoldmanSachsGlobalInvestmentResearch,HaverAnalytics,ECB

Theoutlookforhouseholdconsumptionhasshiftedfromarapidrecoveryinearly2024—whichdidnotmaterialise—toamoregradualimprovementinlate2024.OurforecastforGDPgrowthisbelowtrendinthesecondhalfof2024,givensignificantweaknessinothercomponents.

AlexandreStott

KatyaVashkinskaya

18September20247

GoldmanSachsEuropeanEconomicsAnalyst

DisclosureAppendix

RegAC

We,SvenJariStehn,FilippoTaddei,AlexandreStott,JamesMoberlyandKatyaVashkinskaya,herebycertifythatalloftheviewsexpressedinthisreportaccuratelyreflectourpersonalviews,whichhavenotbeeninfluencedbyconsiderationsofthefirm’sbusinessorclientrelationships.

Unlessotherwisestated,theindividualslistedonthecoverpageofthisreportareanalystsinGoldmanSachs’GlobalInvestmentResearchdivision.

Disclosures

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principalindebtsecurities(orinrelatedderivatives)ofissuersdiscussedinthisreport.

Thefollowingareadditionalrequireddisclosures:Ownershipandmaterialconflictsofinterest:GoldmanSachspolicyprohibitsitsanalysts,professionalsreportingtoanalystsandmembersoftheirhouseholdsfromowningsecuritiesofanycompanyintheanalyst’sareaofcoverage.

Analystcompensation:AnalystsarepaidinpartbasedontheprofitabilityofGoldmanSachs,whichincludesinvestmentbankingrevenues.Analyst

asofficerordirector:GoldmanSachspolicygenerallyprohibitsitsanalysts,personsreportingtoanalystsormembersoftheirhouseholdsfromservingasanofficer,directororadvisorofanycompanyintheanalyst’sareaofcoverage.Non-U.S.Analysts:Non-U.S.analystsmaynotbe

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