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The Personal Consumption Expenditures Price Index, commonly referred to as the PCE Price Index or PCEPI, is an economic indicator published monthly by the U.S.

2026-08-10·x-repost-20260810-002548

The Personal Consumption Expenditures Price Index, commonly referred to as the PCE Price Index or PCEPI, is an economic indicator published monthly by the U.S. Bureau of Economic Analysis (BEA) that tracks the amounts consumers spend on goods and services. The PCEPI is known by slightly different names across U.S. government agencies.

The BEA refers to it as the Implicit Price Deflator for Personal Consumption Expenditures (IPD for PCE), while the Federal Open Market Committee (FOMC) refers to it as the Chain-Type Price Index for Personal Consumption Expenditures (CTPIPCE).

The Federal Reserve tracks the PCE Price Index to measure consumer spending trends and the level of inflation in the U.S. economy. It uses the index as a reference when adjusting monetary policy. The Federal Reserve places even greater emphasis on the PCE Price Index than on another major economic indicator, the Consumer Price Index (CPI).

The PCE Price Index is calculated using data on consumer spending on goods and services. It compares current-period results with those from the previous period and uses chain weighting to analyze changes in prices.

This approach takes factors such as consumer spending habits and purchasing decisions into account, producing an economic indicator that more closely reflects changes in the market. The PCE Price Index covers both goods and services. Goods include durable and nondurable goods.

When all categories of goods are included, the result is referred to as the headline PCE Price Index. When the two categories with particularly volatile prices and transaction volumes—food and energy—are excluded, the result is the Core PCE Price Index. The public can access PCE Price Index reports through the BEA’s website to learn about changes in U.S.

consumer spending. Investors may also use PCE data when adjusting their investment strategies. As an economic indicator closely related to household finances, the PCE Price Index directly reflects changes in consumers’ purchasing power in the U.S. economy. Because consumer spending accounts for a large proportion of the U.S.

economy, tracking the PCE Price Index can also provide insight into the country’s overall economic development. The PCE Price Index covers goods and services purchased by households nationwide. Its scope is broader than that of the CPI, allowing it to provide a more comprehensive view of changes in Americans’ purchasing power.

The Core PCE Price Index excludes food and energy data, which substantially reduces volatility. This can help limit the impact of unusual events on the index and reduce the risk of biased analysis.

In its monetary policy report to Congress, known as the Humphrey–Hawkins Report, submitted on February 17, 2000, the Federal Reserve stated that it would use the PCE Price Index instead of the CPI as its primary measure of inflation [source]. After using the PCE Price Index to track trends in U.S.

inflation, the Federal Reserve adjusts monetary policy and interest rates based on its analysis. These changes can directly affect the financial strategies of consumers, producers, and investors. For example, when the PCE Price Index rises steadily, it may indicate that the U.S. economy is developing in a generally healthy manner.

However, if the index rises too quickly, it may signal excessive inflation. In that case, the Federal Reserve may raise interest rates or adopt other contractionary monetary policies to control economic activity and restore a more stable growth environment.

If the PCE index declines, especially over consecutive periods, it indicates that consumers’ purchasing power is weakening, with both purchase volumes and spending amounts declining. This can signal that economic growth is slowing or even stagnating.

The Federal Reserve may then take measures such as cutting interest rates to stimulate consumption and improve economic conditions. Therefore, the most important significance of the Personal Consumption Expenditures index today is that it provides a valuable economic indicator for the Federal Reserve when formulating monetary policy.

## How Is the Personal Consumption Expenditures Index Calculated? The PCE index includes all purchased goods and services. Goods are divided into durable goods and nondurable goods. Durable goods are products with a useful life of more than three years, such as automobiles, appliances, furniture, and electronic products.

Nondurable goods are products with a useful life of less than three years, such as gasoline, clothing, groceries, cosmetics, health products, and healthcare-related products.

“Services” in the PCE index refers to all services provided by businesses to individual consumers, including bank account maintenance, financial services, entertainment services, and even lawn-care services. When producing the Personal Consumption Expenditures index, the U.S.

Bureau of Economic Analysis (BEA) collects data from a wide range of sources, primarily through surveys of businesses conducted by various organizations, including: - Statistical reports published by the U.S.

Census Bureau and other government agencies; - Reports published by administrative and regulatory agencies; and - Reports published by private organizations such as industry associations. After collecting the data, the BEA calculates the index using a Fisher-Ideal index model to obtain the Personal Consumption Expenditures index value for the current period.

To calculate the rate of change in the PCE index, the Personal Consumption Expenditures index uses a chain-type index methodology. This measures the rate of change by comparing PCE index values across two consecutive periods. Chain-type index analysis can account for changes in consumers’ spending habits and purchasing strategies.

For example, when the price of a product increases, consumers may choose a cheaper substitute. This change in consumption behavior is incorporated into the chain-type index calculation by comparing values across consecutive periods. ## What Types of Personal Consumption Expenditures Indexes Are There?

There are two main types of Personal Consumption Expenditures indexes: - The headline Personal Consumption Expenditures index (Chain-Type Price Index); and - The core Personal Consumption Expenditures index (Core PCE Index).

The headline Personal Consumption Expenditures index measures personal consumption expenditures on all goods and services, including food and energy. The core Personal Consumption Expenditures index measures personal consumption expenditures excluding food and energy.

The core Personal Consumption Expenditures index is produced because food and energy prices can experience significant volatility due to financial investment. Some financial investments can also affect the trading volume and transaction values of food and energy products, but these changes are not caused by consumers’ everyday spending.

As a result, fluctuations driven by these factors may not accurately reflect economic trends, and the headline PCE index may not provide an accurate measure of inflation. For this reason, the Federal Reserve and other institutions place greater emphasis on tracking the core Personal Consumption Expenditures index when measuring inflation.

## How Can You Check the Personal Consumption Expenditures Index? Users can find data for both the headline and core Personal Consumption Expenditures indexes on the Personal Consumption Expenditures portal of the Federal Reserve Economic Data website. Step 1: Go to the Federal Reserve Economic Data website.

Step 2: Enter “Chain-Type PCE Price Index” in the search bar to access the Personal Consumption Expenditures data page. The first result is the headline Personal Consumption Expenditures index, while the second is the core Personal Consumption Expenditures index.

Below is a chart of the headline Personal Consumption Expenditures index as of December 25, 2024. ### Data Source Below is a chart of the core Personal Consumption Expenditures index as of December 26, 2024.

The charts for overall personal consumption expenditures and core personal consumption expenditures show clear upward trends during the 1970s, 1980s, the beginning of this century, and the COVID-19 period in 2020.

This suggests that consumer spending indexes increased significantly during several economic crises, and that the increases were broad-based, since the same pattern appeared after food and energy were excluded. ## What Is the Difference Between PCE and CPI?

The CPI and PCE indexes are two of the most important financial indicators for measuring consumer spending. The Federal Reserve tracks these indicators to assess consumers’ purchasing power and understand changes in the inflation rate. Based on its analysis, the Fed adjusts monetary policy, interest rates, and other financial policies.

However, CPI and PCE differ in several important ways: Data sources: CPI uses consumer spending data based on household surveys, while PCE uses consumer spending data based on business surveys. Categories included in the data: CPI and PCE differ in several notable ways. First, CPI includes owners’ equivalent rent for housing, while PCE does not.

Second, for healthcare spending, CPI considers only medical costs paid directly by households. PCE also includes healthcare expenses purchased on behalf of households by third parties, such as health insurance paid for employees by their employers.

Calculation methods: CPI uses a statistical calculation based on the Laspeyres index and does not account for changes in consumer spending habits or purchasing strategies. PCE uses a calculation based on the Fisher Ideal index and accounts for changes in consumer spending habits and purchasing strategies.

Issuing agencies: CPI is produced and published monthly by the U.S. Bureau of Labor Statistics (BLS), while PCE is produced and published monthly by the U.S. Bureau of Economic Analysis (BEA). How the indexes are reported: CPI publishes detailed statistics by category, allowing analysts to conduct more granular analysis.

PCE does not provide the same level of category-level detail. ## More Macroeconomic Concepts What Is the Federal Reserve’s Balance Sheet? Exploring the Federal Reserve’s 24 Primary Dealers What Is the National Financial Conditions Index? Published by the Federal Reserve Bank of Chicago What Is the Buffett Indicator? What Is the U.S.

Treasury Volatility Index? The MOVE Index What Is the U.S. Dollar Index? What Are Bank Reserves? What Are Open Market Operations? What Is the Interest Rate on Reserve Balances?

Full text

The Personal Consumption Expenditures Price Index, commonly referred to as the PCE Price Index or PCEPI, is an economic indicator published monthly by the U.S.

The Personal Consumption Expenditures Price Index, commonly referred to as the PCE Price Index or PCEPI, is an economic indicator published monthly by the U.S. Bureau of Economic Analysis (BEA) that tracks the amounts consumers spend on goods and services. The PCEPI is known by slightly different names across U.S. government agencies. The BEA refers to it as the Implicit Price Deflator for Personal Consumption Expenditures (IPD for PCE), while the Federal Open Market Committee (FOMC) refers to it as the Chain-Type Price Index for Personal Consumption Expenditures (CTPIPCE). The Federal Reserve tracks the PCE Price Index to measure consumer spending trends and the level of inflation in the U.S. economy. It uses the index as a reference when adjusting monetary policy. The Federal Reserve places even greater emphasis on the PCE Price Index than on another major economic indicator, the Consumer Price Index (CPI). The PCE Price Index is calculated using data on consumer spending on goods and services. It compares current-period results with those from the previous period and uses chain weighting to analyze changes in prices. This approach takes factors such as consumer spending habits and purchasing decisions into account, producing an economic indicator that more closely reflects changes in the market. The PCE Price Index covers both goods and services. Goods include durable and nondurable goods. When all categories of goods are included, the result is referred to as the headline PCE Price Index. When the two categories with particularly volatile prices and transaction volumes—food and energy—are excluded, the result is the Core PCE Price Index. The public can access PCE Price Index reports through the BEA’s website to learn about changes in U.S. consumer spending. Investors may also use PCE data when adjusting their investment strategies. As an economic indicator closely related to household finances, the PCE Price Index directly reflects changes in consumers’ purchasing power in the U.S. economy. Because consumer spending accounts for a large proportion of the U.S. economy, tracking the PCE Price Index can also provide insight into the country’s overall economic development. The PCE Price Index covers goods and services purchased by households nationwide. Its scope is broader than that of the CPI, allowing it to provide a more comprehensive view of changes in Americans’ purchasing power. The Core PCE Price Index excludes food and energy data, which substantially reduces volatility. This can help limit the impact of unusual events on the index and reduce the risk of biased analysis. In its monetary policy report to Congress, known as the Humphrey–Hawkins Report, submitted on February 17, 2000, the Federal Reserve stated that it would use the PCE Price Index instead of the CPI as its primary measure of inflation [source]. After using the PCE Price Index to track trends in U.S. inflation, the Federal Reserve adjusts monetary policy and interest rates based on its analysis. These changes can directly affect the financial strategies of consumers, producers, and investors. For example, when the PCE Price Index rises steadily, it may indicate that the U.S. economy is developing in a generally healthy manner. However, if the index rises too quickly, it may signal excessive inflation. In that case, the Federal Reserve may raise interest rates or adopt other contractionary monetary policies to control economic activity and restore a more stable growth environment. If the PCE index declines, especially over consecutive periods, it indicates that consumers’ purchasing power is weakening, with both purchase volumes and spending amounts declining. This can signal that economic growth is slowing or even stagnating. The Federal Reserve may then take measures such as cutting interest rates to stimulate consumption and improve economic conditions. Therefore, the most important significance of the Personal Consumption Expenditures index today is that it provides a valuable economic indicator for the Federal Reserve when formulating monetary policy. ## How Is the Personal Consumption Expenditures Index Calculated? The PCE index includes all purchased goods and services. Goods are divided into durable goods and nondurable goods. Durable goods are products with a useful life of more than three years, such as automobiles, appliances, furniture, and electronic products. Nondurable goods are products with a useful life of less than three years, such as gasoline, clothing, groceries, cosmetics, health products, and healthcare-related products. “Services” in the PCE index refers to all services provided by businesses to individual consumers, including bank account maintenance, financial services, entertainment services, and even lawn-care services. When producing the Personal Consumption Expenditures index, the U.S. Bureau of Economic Analysis (BEA) collects data from a wide range of sources, primarily through surveys of businesses conducted by various organizations, including: - Statistical reports published by the U.S. Census Bureau and other government agencies; - Reports published by administrative and regulatory agencies; and - Reports published by private organizations such as industry associations. After collecting the data, the BEA calculates the index using a Fisher-Ideal index model to obtain the Personal Consumption Expenditures index value for the current period. To calculate the rate of change in the PCE index, the Personal Consumption Expenditures index uses a chain-type index methodology. This measures the rate of change by comparing PCE index values across two consecutive periods. Chain-type index analysis can account for changes in consumers’ spending habits and purchasing strategies. For example, when the price of a product increases, consumers may choose a cheaper substitute. This change in consumption behavior is incorporated into the chain-type index calculation by comparing values across consecutive periods. ## What Types of Personal Consumption Expenditures Indexes Are There? There are two main types of Personal Consumption Expenditures indexes: - The headline Personal Consumption Expenditures index (Chain-Type Price Index); and - The core Personal Consumption Expenditures index (Core PCE Index). The headline Personal Consumption Expenditures index measures personal consumption expenditures on all goods and services, including food and energy. The core Personal Consumption Expenditures index measures personal consumption expenditures excluding food and energy. The core Personal Consumption Expenditures index is produced because food and energy prices can experience significant volatility due to financial investment. Some financial investments can also affect the trading volume and transaction values of food and energy products, but these changes are not caused by consumers’ everyday spending. As a result, fluctuations driven by these factors may not accurately reflect economic trends, and the headline PCE index may not provide an accurate measure of inflation. For this reason, the Federal Reserve and other institutions place greater emphasis on tracking the core Personal Consumption Expenditures index when measuring inflation. ## How Can You Check the Personal Consumption Expenditures Index? Users can find data for both the headline and core Personal Consumption Expenditures indexes on the Personal Consumption Expenditures portal of the Federal Reserve Economic Data website. Step 1: Go to the Federal Reserve Economic Data website. Step 2: Enter “Chain-Type PCE Price Index” in the search bar to access the Personal Consumption Expenditures data page. The first result is the headline Personal Consumption Expenditures index, while the second is the core Personal Consumption Expenditures index. Below is a chart of the headline Personal Consumption Expenditures index as of December 25, 2024. ### Data Source Below is a chart of the core Personal Consumption Expenditures index as of December 26, 2024. The charts for overall personal consumption expenditures and core personal consumption expenditures show clear upward trends during the 1970s, 1980s, the beginning of this century, and the COVID-19 period in 2020. This suggests that consumer spending indexes increased significantly during several economic crises, and that the increases were broad-based, since the same pattern appeared after food and energy were excluded. ## What Is the Difference Between PCE and CPI? The CPI and PCE indexes are two of the most important financial indicators for measuring consumer spending. The Federal Reserve tracks these indicators to assess consumers’ purchasing power and understand changes in the inflation rate. Based on its analysis, the Fed adjusts monetary policy, interest rates, and other financial policies. However, CPI and PCE differ in several important ways: **Data sources:** CPI uses consumer spending data based on household surveys, while PCE uses consumer spending data based on business surveys. **Categories included in the data:** CPI and PCE differ in several notable ways. First, CPI includes owners’ equivalent rent for housing, while PCE does not. Second, for healthcare spending, CPI considers only medical costs paid directly by households. PCE also includes healthcare expenses purchased on behalf of households by third parties, such as health insurance paid for employees by their employers. **Calculation methods:** CPI uses a statistical calculation based on the Laspeyres index and does not account for changes in consumer spending habits or purchasing strategies. PCE uses a calculation based on the Fisher Ideal index and accounts for changes in consumer spending habits and purchasing strategies. **Issuing agencies:** CPI is produced and published monthly by the U.S. Bureau of Labor Statistics (BLS), while PCE is produced and published monthly by the U.S. Bureau of Economic Analysis (BEA). **How the indexes are reported:** CPI publishes detailed statistics by category, allowing analysts to conduct more granular analysis. PCE does not provide the same level of category-level detail. ## More Macroeconomic Concepts What Is the Federal Reserve’s Balance Sheet? Exploring the Federal Reserve’s 24 Primary Dealers What Is the National Financial Conditions Index? Published by the Federal Reserve Bank of Chicago What Is the Buffett Indicator? What Is the U.S. Treasury Volatility Index? The MOVE Index What Is the U.S. Dollar Index? What Are Bank Reserves? What Are Open Market Operations? What Is the Interest Rate on Reserve Balances?

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