European consumption to slow as winter bites
SPY•SPY•SPY•SPY•Goldman Sachs expects euro area real consumption growth to stall at around 0% quarter on quarter over the winter and remain below trend for most of 2027. Consumption has grown around 1.2% year on year, supported by a decline in household saving.
Euro area real private consumption has grown around 1.2% year on year, while real income growth slowed to 0.1%. A one percentage point decline in the household saving rate over the past year helped make up the difference.
Goldman Sachs expects consumption growth to stall at around 0% quarter on quarter over the winter and remain below trend for most of 2027. Higher energy costs, slower borrowing and worsening consumer views of personal finances are expected to weigh on spending.
European retail stocks have risen 8.4% this year and are trading at record highs. A rotation out of AI-related stocks has also helped the sector, the article said.
