Core PCE Price Index MoM

The Core PCE Price Index MoM tracks monthly price change for goods and services bought by US consumers, excluding food and energy. PCE means Personal Consumption Expenditures (all consumer spending, including employer paid health care), and MoM means change versus the prior month. It is published by the BEA (Bureau of Economic Analysis, the federal statistics agency) on a seasonally adjusted index (adjusted for normal seasonal patterns). The series starts in 1959 with 2017 as the reference year (index equals 100), and a positive reading means core prices rose.

Each Personal Income and Outlays release covers 1 calendar reference month of spending and prices in the National Income and Product Accounts. It arrives usually about 4 weeks later, toward the end of the next month, at 8:30 AM Eastern Time under embargo (no early release). The same report adds income, spending, saving, real PCE (inflation adjusted spending), and price tables, but timing can slip during federal disruptions. The initial estimate for a month is preliminary and revises as fuller data arrive, with yearly updates and full rebuilds about every 5 years.

Core covers all consumer spending except food and energy, with weights that shift over time because the index is chain-type (reweighted each period).

• Durable goods: long lasting purchases such as motor vehicles and parts, furnishings, and recreational goods.
• Nondurable goods: everyday items such as prescription drugs and clothing type goods; gasoline and other energy goods are excluded.
• Food: excluded from core because its prices swing sharply and often.
• Services: the largest part of the index, including housing and utilities, health care, financial services and insurance, transportation, and food services.
• Energy goods and services: excluded from core for the same reason, including gasoline, electricity, and gas type items.

In the January 2024 release (published February 29, 2024), headline PCE (the overall index) rose 0.3% from the prior month. Food rose 0.5%, energy fell 1.4%, and core (excluding food and energy) rose 0.4%. From 1 year earlier, headline rose 2.4% as services rose 3.9% and goods fell 0.5%, with food up 1.4% and energy down 4.9%. Core rose 2.8%, higher than headline, exactly the gap the core gauge exists to reveal.

1. Build spending components: estimate current-dollar spending for goods mainly with the retail-control method on Census retail surveys. Estimate services from Census services surveys. Prepare each series both seasonally adjusted (adjusted for normal seasonal patterns) and unadjusted.
2. Deflate (convert to real terms): divide each component by its closest matching price index, mostly BLS consumer and producer price indexes. BLS means Bureau of Labor Statistics (the federal price data agency), and the 2017 reference year value is set to 100. Real value Qt equals nominal spending divided by the price ratio to the reference year: Qt = (pt·qt)/(pt/p0).
3. Aggregate with a chain-type Fisher index: for each pair of adjacent periods, combine a Laspeyres index (base-period weighted) with a Paasche index (current-period weighted). Take the geometric mean (square root of the product) of the 2, then chain link (multiply) the period changes into 1 series.
4. Core version: repeat the same aggregation over all components except food and energy.
5. Monthly change: compute MoM% = (Index(t) / Index(t-1) - 1) x 100 on the seasonally adjusted index at a monthly rate. The 12 month change compares the index with the same month 1 year earlier.
6. Illustrative example: an index of 124.00 rising to 124.50 gives (124.50 / 124.00 - 1) x 100 = +0.4%. BEA rounds results to 1 decimal place.