The PCE: Price Level Measures in Economics

There are two common measures of price level (P): The GDP Deflator and the Consumer Price Index (CPI).

However, the Federal Reserve Bank looks at the Personal Consumption Expenditure Price Index (PCE) as their preferred index. The PCE is complied and released monthly in the Personal Income and Outlays report and attempts to capture price level changes (essentially inflation or deflation) across a wide bucket of consumer expenses.

It’s a chain-type index, which means that it adjusts for changes in the composition of consumer spending over time to better reflect how consumers are actually feeling. It’s published by the Bureau of Economic Analysis, or BEA (which is part of the department of commerce).

Here’s the current PCE as of October 2024:

You can see the current PCE for yourself here: https://www.bea.gov/data/personal-consumption-expenditures-price-index

Hope you found that helpful! Here’s another article detailing nominal and real GDP (here), and one more about how to calculate inflation using multiple GDP deflators (here). Also:

• Read about the Income Approach to GDP here.
• Read more economics stories here.
• To learn more about the oil market, consider reading about PADD Districts, the Why WTI and Brent are Crude Oils, and Why There are Price Differences Among Crude Oils, and my Oil & Gas Terms Guide.

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