Should we be worrying about consumers?

Annual revisions to the income and spending data released this week mean that the household saving rate is now estimated to have fallen sharply over the past year, calling into question the sustainability of recent economic growth. While those revisions suggest that there is less scope for consumption to receive a boost from households running down their savings, we think the fundamentals remain strong. This should be enough to fuel consumption growth of around 2.5% annualised in the coming quarters.