Personal Consumption Expenditures Price Index
Inflation · Bureau of Economic Analysis · Monthly · PCEPI
What it is
The Fed's preferred inflation measure, broader than CPI with dynamic weighting.
Why it matters
This is the inflation gauge the Fed explicitly targets at 2%.
Public research record
Research framework · page evidenceLatest completed assessment: Personal Consumption Expenditures Price Index
This is the inflation gauge the Fed explicitly targets at 2%.
| Type | Claim | Scope |
|---|---|---|
| Release fact | The Fed's preferred inflation measure, broader than CPI with dynamic weighting. | Monthly · % |
| Interpretation | The Fed preferred inflation gauge is running hotter; supports tighter policy. | Higher-reading interpretation |
| Interpretation | PCE is easing toward target; supports rate cuts. | Lower-reading interpretation |
Countercase, invalidators, and sources
Countercase
A single indicator does not identify causality; confirm the move against related funding, reserve, market, and asset data.
What would change the view
- · The next observation reverses the move.
- · Related indicators do not confirm the interpretation.
Do this in Market Ontology
- Treasury yield curve analysis from released dataTrack the US Treasury yield curve from FRED: 2s10s and 3m10y spreads, inversion history and what changes in slope have preceded.
- Track inflation from CPI, PCE and market breakevensMonitor US inflation from released data: CPI and core CPI, PCE, and 5- and 10-year breakevens, with what the next release needs to show.
- Track the US labor market from released dataFollow payrolls, unemployment, jobless claims and wage growth from FRED, with the Sahm rule reading and trend versus the prior year.
- Central bank policy analysisRead Federal Reserve policy from the funds rate, real rates and released statements, and compare the stance with inflation and labor data.
How to read prints
| When it rises | The Fed preferred inflation gauge is running hotter; supports tighter policy. |
| When it falls | PCE is easing toward target; supports rate cuts. |
Frequently asked
What is PCE inflation?⌄
The Personal Consumption Expenditures Price Index measures inflation across all consumer spending, including healthcare paid by insurance. It is the Fed preferred inflation gauge.
Why does the Fed target 2% PCE?⌄
The Fed dual mandate uses PCE because it captures substitution effects and a broader basket than CPI. The 2% target is on headline PCE year over year.
What is Core PCE?⌄
Core PCE excludes food and energy. Fed officials watch the 3-month and 6-month annualized core PCE rate for signs of stickiness.
When is PCE released?⌄
Monthly, about four weeks after the corresponding CPI, as part of the Personal Income and Outlays report.
Tracked live in Inflation System
See it live
Personal Consumption Expenditures Price Index is tracked live in the inflation, breakevens and real yields module of the public terminal. No account required.
| Source | Bureau of Economic Analysis |
| Frequency | Monthly |
| Category | Inflation |
| FRED Series | PCEPI |
| Unit | % |
| Related Module | Inflation System |