Core Personal Consumption Expenditure (PCE) Price Index: A Reflection of Inflation Trends

Understanding the Core PCE Price Index

The Core Personal Consumption Expenditure (PCE) Price Index is a key indicator of inflation in the United States. It measures the changes in prices for a comprehensive basket of consumer goods and services purchased by US residents, excluding food and energy.

Importance of Core PCE Price Index

The Core PCE Price Index is closely monitored by the Federal Reserve, which uses it to assess inflation and make monetary policy decisions. It is considered a more reliable measure of inflation than the Consumer Price Index (CPI) because it excludes volatile components such as food and energy, which can experience sharp price swings.