The Economy & the Fed

PCE Price Index

The Personal Consumption Expenditures price index, published by the Bureau of Economic Analysis, part of the US Department of Commerce. Like the Consumer Price Index it tracks how fast consumer prices rise, but it covers a wider range of spending, including what employers and government pay on households’ behalf, such as health insurance, and it adjusts as people switch to cheaper products. It usually runs a little below CPI. It is the Federal Reserve’s preferred inflation measure and the one its 2% goal is set in, though CPI comes out earlier and often moves markets more.

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