The PCE price index (PCEPI) (or PCE deflator, PCE price deflator, Implicit Price Deflator for Personal Consumption Expenditures (IPD for PCE) (by the Bureau of Economic Analysis) or the chain-type price index for personal consumption expenditures (CTPIPCE) (by the FOMC)) is a nation-wide indicator of the average increase in prices for all domestic personal consumption. It's indexed to a base of 100 in 1992. It's derived from the largest Gross Domestic Product component, personal consumption expenditures. The other components are government consumption expenditures , gross private domestic investment , and net exports of goods and services , the GDP can be found in the BEA's national income and product accounts.

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 Consumer price index, this index use current period quantities as the weights ("chain-type") rather than some fixed bundle. Current personal consumption is measured in today's prices and then compared to current personal consumption at prices from a base year. This price index method assumes that the consumer has made allowances for changes in relative prices.

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" ([1]).

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 (see "Personal Income and Outlays")

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