Learn · Inflation
What Is the PCE Price Index?
The personal consumption expenditures (PCE) price index measures how prices change for the goods and services Americans buy. It is the inflation measure the Federal Reserve uses for its 2% target.
What PCE measures
The PCE price index is published monthly by the Bureau of Economic Analysis (BEA) as part of its Personal Income and Outlays report. Like CPI, it tracks how much prices have risen, and it's usually quoted as the change from a year earlier.
How PCE differs from CPI
PCE covers a broader range of spending than CPI, including purchases made on households' behalf, such as employer-provided health insurance. Its weights also update as people shift their spending, for example buying more chicken when beef gets expensive.
Because of these differences, PCE inflation usually runs a little below CPI inflation, and housing makes up a smaller share of it.
Why the Fed watches PCE
The Federal Reserve defines its inflation goal as 2% annual PCE inflation over the longer run. Fed officials pay particular attention to core PCE, which excludes food and energy, as a guide to where inflation is heading.
PCE comes out after CPI each month, so markets often have a good idea of what to expect. Surprises in core PCE can still move expectations for interest rates.
PCE Inflation over time
PCE Inflation
Personal consumption expenditures prices, % change from a year ago
Common questions
What does PCE stand for?
PCE stands for personal consumption expenditures. The PCE price index is published by the U.S. Bureau of Economic Analysis (BEA).
When is the next PCE report?
The next PCE report (Personal Income and Outlays) is scheduled for Thursday, October 29, 2026, at 8:30 AM Eastern Time.
Why does the Fed prefer PCE over CPI?
PCE covers a broader range of spending and adjusts as consumers change what they buy, which the Fed considers a more complete picture of inflation.
What is core PCE?
Core PCE is the PCE price index excluding food and energy, whose prices are volatile. It is the Fed's favorite gauge of the underlying inflation trend.
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Source: U.S. Bureau of Economic Analysis via FRED, Federal Reserve Bank of St. Louis. For information only, not investment advice.