Personal Consumption Expenditures - PCE

AAA

DEFINITION of 'Personal Consumption Expenditures - PCE'

A measure of price changes in consumer goods and services. Personal consumption expenditures consist of the actual and imputed expenditures of households; the measure includes data pertaining to durables, non-durables and services. It is essentially a measure of goods and services targeted toward individuals and consumed by individuals.

Also referred to as "consumption."

INVESTOPEDIA EXPLAINS 'Personal Consumption Expenditures - PCE'

Similar to the Consumer Price Index (CPI), PCE is a report (actually a part of the personal income report) put out by the Bureau of Economic Analysis of the Department of Commerce.

There are two broad indexes of consumer prices in the United States: the CPI and the Chain Price Index for Personal Consumption Expenditures (PCEPI). They are similar in many respects, but there are some important differences that can lead to large gaps between CPI and PCEPI inflation rates. The PCEPI uses a chain index, which takes consumers' changing consumption due to prices into account; the CPI uses a fixed basket of goods with weightings that do not change over time.

The PCE is a fairly predictable report that has little impact on the markets.

RELATED TERMS
  1. Manufacturer's Suggested Retail ...

    The amount of money for which the company that produces a product ...
  2. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket ...
  3. Macroeconomics

    The field of economics that studies the behavior of the aggregate ...
  4. Microeconomics

    The branch of economics that analyzes the market behavior of ...
  5. Producer Price Index - PPI

    A family of indexes that measures the average change in selling ...
  6. Deflation

    A general decline in prices, often caused by a reduction in the ...
Related Articles
  1. The Consumer Price Index: A Friend To ...
    Options & Futures

    The Consumer Price Index: A Friend To ...

  2. The Misery Index: Measuring Your Misfortune
    Fundamental Analysis

    The Misery Index: Measuring Your Misfortune

  3. The Dark Side Of Bulk Buying
    Budgeting

    The Dark Side Of Bulk Buying

  4. Economic Indicators To Know
    Retirement

    Economic Indicators To Know

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center