What is the personal consumption expenditure PCE price index?

The Personal Consumption Expenditures (PCE) price index is a measure of inflation that tracks changes in the prices of goods and services purchased by households in the United States. The PCE price index is the preferred inflation measure of the Federal Reserve and is used to gauge the level of price changes in the economy and to guide monetary policy.

The PCE price index is based on data collected from the Bureau of Economic Analysis (BEA), which is a part of the U.S. Department of Commerce. The BEA collects data on consumer spending and prices of goods and services in a variety of ways, including surveys and administrative data.

The PCE price index includes both goods and services, and it covers a wide range of categories such as food, housing, healthcare, transportation, and education. The index is calculated by comparing the prices of a basket of goods and services in the current period to the prices of the same basket of goods and services in a base period. The result is expressed as a percentage change in prices over time.

Overall, the PCE price index is an important economic indicator that helps policymakers and analysts to monitor inflation and make informed decisions about monetary policy.

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