The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
The Core Personal Consumption Expenditures (PCE) Price Index measures the changes in the price of goods and services purchased by consumers for the purpose of consumption, excluding food and energy. It is the Federal Reserve's preferred inflation measure because it captures changes in consumer behavior more accurately than the CPI. The year-over-year (YoY) figure compares the prices in the current month with the same month in the previous year. Central banks use this data to determine interest rate paths and maintain price stability.
The index is calculated using a Fisher Ideal formula that accounts for changes in consumer spending patterns. It utilizes data from the GDP report and business surveys to track price changes across a broad basket of consumer goods and services.
The PCE-based Super Core — services excluding energy and housing — isolates underlying inflation. Then-Fed Chair Jerome Powell made it his preferred read on whether the inflation problem is structural or transitory. Because the FOMC explicitly targets PCE and not CPI, this series remains the cleanest version of that question.