Personal consumption expenditures price index

The PCE price index (PCEPI) (or PCE deflator, PCE price deflator, Implicit Price Deflator for Personal Consumption Expenditures (IPD for PCE) (by the BEA) or the chain-type price index for personal consumption expenditures (CTPIPCE) (by the FOMC ) is a United States-wide indicator of the average increase in prices for all domestic personal consumption. It is indexed to a base of 100 in 1992. Using a variety of data including U.S. Consumer Price Index and Producer Price Index prices, it is derived from the largest component of the Gross Domestic Product in the BEA's National Income and Product Accounts, personal consumption expenditures.

The less volatile measure of the PCE price index is the core PCE price index which excludes the more volatile and seasonal food and energy prices.

In comparison to the headline United States Consumer Price Index, which uses one set of expenditure weights for several years, this index uses a Fisher Price Index, which uses expenditure data from both the current period and the preceding period. Also, the PCEPI uses a chained index which compares one quarter's price to the last quarter's instead of choosing a fixed base. This price index method assumes that the consumer has made allowances for changes in relative prices. The PCE rises about 1/3% less than the CPI, a trend that dates back to 1992. An unpublished report on this difference by the BLS suggests that most of it is from different ways of calculating hospital expenses and airfares.

Federal Reserve

In its "Monetary Policy Report to the Congress" ("Humphrey-Hawkins Report") from February 17, 2000 the FOMC said it was changing its primary measure of inflation from the consumer price index to the "chain-type price index for personal consumption expenditures".

See also

• Consumer price index
• Gross domestic product deflator (IPD for GDP)
• Household final consumption expenditure (HFCE)
• Inflation

External links

Data

• Briefing.com: Personal Income and Spending
  • Briefing.com: CPI (the core CPI as a comparison)
• Current News Releases from the Bureau of Economic Analysis (click on "Personal Income and Outlays", then skip to Tables 9 and 11 near the bottom.)
• St. Louis Federal Reserve FRED2 PCE data index

Articles

• Personal Consumption Expenditures - PCE
• FAQ: What is the "market-based" PCE price index?
• Implicit Price Deflator for Personal Consumption Expenditures - Referendum 47's Measure of Inflation
  • Implicit Price Deflator Information
• FRB: Monetary Policy Report to the Congress - February 17, 2000
• TheStreet.com: Meet the Fed's Elusive New Inflation Target