Belgian Consumer Index Skims Along Further Below Zero

The National Bank of Belgium Consumer Confidence Indicator fell to -5 in July from -1 in June. It stands one point above where it stood in January 2020 before COVID struck. Since the early-1990s, the index has been lower than its current value about 59% of the time, marking it as above its historic median by a modest amount, near the upper one trend of its historic queue of values.

The assessment of the economic situation for the next 12 months deteriorated slightly in July, as it fell by one point. The backward-looking assessment by comparison worsened by 3 points compared to June. The outlook has a weak 29.6 percentile standing.

Price trends show more inflation ahead is expected while looking backward participants see slightly less pressure on a month-to-month comparison. The look-ahead on inflation has a 20.2 percentile standing, marking it as low historically.

The look-ahead on unemployment is higher in July, rising to 19 from 12 in June. That index number on expectations has a 41-percentile standing, below its historic median (the median occurs at a ranking of 50). While it is up month-to-month, it is lower than the May reading of 23 but higher than the year-ago reading of 15. Unemployment expectations are somewhat volatile and close to historic norms.

The financial situation is little-changed month-to-month. The next 12-month assessment improved by 3 points month-to-month, the look backward shows conditions worsened in July compared to June but only by a tick, and the current appraisal remained dead flat at a reading of 23. Unfortunately, the look-ahead, which is most important, produces the lowest standing among these three horizons. The look ahead rank standing has been weaker about one-third of the time, the look backward at the last 12 months has been better only about 30% of the time, and the current assessment is at a strong 89.6 percentile standing. While the current situation is quite strong, the outlook is poor. There is a good deal of let-down between how things appear now, and what is expected for the financial situation ahead. That is disconcerting.

Household savings over the next 12 months worsened to a reading of 16 in July from 20 in June. This reading has an 85.3 percentile standing. The assessment on the favorability of the environment to save has a 91.4 percentile standing. That response improved by one tick in the month.

The Belgian metrics show the weakest readings in the ‘looking ahead’ module, which is unfortunate. The fortunate response, however, is the low reading for price trends expected over the next 12 months. This report is not reassuring nor is it a call to action. But it embraces the notion of risk as well as the possibility of ongoing progress. It is a mixed report.