Euro area consumers: Not buoyant, but still resilient

While not buoyant, consumption remains resilient despite a more persistent energy shock. Nominal incomes have picked up despite soft jobs gains, providing some offset to rising energy prices. The purchasing power squeeze is set to intensify in 2H26, but the still-elevated savings rate remains a cushion. J.P. Morgan lowers its prior 1.4%ar 2H26 consumption forecast to a still-decent 0.75%ar, assuming households absorb part of the income squeeze through a gradual decline in the still-elevated saving rate, and expects private consumption to strengthen more meaningfully once easing inflation supports a recovery in real income growth in 2027.