PCE Prices QoQ

PCE Prices QoQ is the quarter-on-quarter change in the Personal Consumption Expenditures Price Index. The Bureau of Economic Analysis (BEA), a Commerce agency, publishes the National Income and Product Accounts (NIPAs). It tracks prices paid by US households and nonprofits serving households (NPISHs), including purchases abroad and third-party spending. It covers purchases, net used goods, and nonprofit costs, about two-thirds of final spending.

It differs from the out-of-pocket Consumer Price Index (CPI) in formula, weights, and scope. Dwellings, direct government services, and illegal goods sit outside its scope. Core PCE strips food and energy, quarterly estimates run from 1947 beside a separate monthly version, and weights change quarterly.

It comes in 3 vintages near the end of the first, second, and third months after quarter end, embargoed until 8:30 a.m. Eastern. Estimates rest on the reference quarter, with the Advance missing full third-month data and later vintages adding fuller detail.

It prints inside the GDP release beside real and current-dollar GDP, purchases prices, income, and profits, with no Advance for either. Personal income and the GDP-GDI average appear; profits preliminary in the Second and revised in the Third. The Third adds industry detail, gross output, and GDP by state.

Read seasonally adjusted change at annual rates: higher means faster inflation, and the 2% annual goal belongs to the Federal Reserve, not BEA. Figures revise across vintages, then each late September over at least 5 years and comprehensively about every 5 years.

Four published parts plus two splits separate noise from trend.

• Durable goods: long-lived goods such as new motor vehicles and net used vehicle purchases.
• Nondurable goods: short-lived items such as groceries and gasoline, including volatile food and energy.
• Services: intangibles such as housing, utilities, health care, financial services, and insurance, including imputed prices, the largest share.
• Final consumption expenditures of NPISHs: net operating costs of nonprofits, the top-up beyond what households pay.
• PCE excluding food and energy (core, the underlying trend gauge): strips volatile food and energy goods and services to show persistent inflation.
• Market-based PCE: excludes most imputed prices and NPISH consumption, tracking only market transactions.

The first quarter of 2022 shows the split: real GDP fell 1.6% at an annual rate while PCE prices rose 7.1% after 6.4%. The third estimate, released June 29, 2022, put core at 5.2% after 5.0% in the fourth quarter of 2021, a 1.9-point food and energy gap. The headline moved from 7.0% in the Advance and Second to 7.1%, and purchases prices reached 8.0% after 7.0%. The same release showed current-dollar GDP up 6.6% to $24.39 trillion, real GDI up 1.8% averaging 0.1%, profits down $63.8 billion.

1. Current-dollar detail: BEA builds current-dollar detail with commodity-flow and retail-control methods. Inputs are Census surveys such as monthly retail trade and quarterly services, plus trade, energy, and administrative data.
2. Detailed prices: most prices come from extrapolating Bureau of Labor Statistics consumer and producer indexes.
3. Detailed quantities: most quantities come from deflation, dividing current-dollar values by a price index set to 100 in reference year 2017. Quantity extrapolation and direct valuation are the exceptions.
4. Fisher aggregation: detail aggregates in a Fisher chain-type index, the geometric mean of Laspeyres base weights and Paasche current weights. Weights use two adjacent quarters, changes chain forward, matching annual indexes before rates are set.
5. Seasonal adjustment: BEA uses adjusted source data, else tests seasonality with X-13ARIMA and concurrent factors, on adjusted indexes with no residual seasonality.
6. Reference year and annual rate: the index equals 100 in reference year 2017, quarterly change converting to an annual rate with exponent 4. A 0.557% quarterly rise equals 2.25% annualized, that is (1.005571^4 minus 1) times 100, the published form.