Markets & regulation

PCE (Personal Consumption Expenditures)

Also called: PCE price index

In shortThe US inflation measure the Federal Reserve uses for its 2% target.

The PCE price index comes from the Bureau of Economic Analysis and is published after the CPI and PPI, so much of it can be estimated in advance. That is why it usually moves markets less, even though it is the number the Federal Reserve targets.

It differs from the CPI in what it covers and how it weights things: housing counts for less, and it adjusts as people switch to cheaper goods. The two can therefore give different readings in the same month.

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