The latest year-over-year growth rate for the PCE Price Index is 2.09%, while the Core PCE Price Index (excluding volatile food and energy components) shows a year-over-year growth of 2.65%. These figures represent key measures of inflation and consumer spending trends in the economy.
Understanding PCE Growth Rates
The Personal Consumption Expenditures (PCE) price index is a crucial economic indicator that measures the average change in prices paid by consumers for goods and services. It is the Federal Reserve's preferred measure of inflation. There are several ways to look at its growth rate, depending on the timeframe and whether volatile components are included.
Key PCE Growth Rate Metrics
Here are the latest growth rates for PCE and Core PCE, reflecting various timeframes:
| Metric | Latest Growth Rate |
|---|---|
| PCE Price (Year-over-Year) | 2.09% |
| US - Core PCE Price (Year-over-Year) | 2.65% |
| US - Core PCE Price (6-Month Annualized) | 2.30% |
| US - Core PCE Price (3-Month Annualized) | 2.35% |
| PCE (Month-over-Month) | 0.18% |
| US - Core PCE Price (Month-over-Month) | 0.25% |
Note: These figures represent the most recently reported data.
Why These Rates Matter
- Overall Economic Health: PCE growth rates indicate how fast consumer prices are changing, which directly impacts household purchasing power and broader economic stability.
- Monetary Policy: The Federal Reserve closely monitors PCE inflation, especially Core PCE, to guide its monetary policy decisions, such as setting interest rates. The Fed typically targets a 2% PCE inflation rate over the long run.
- Consumer Spending Insights:
- Year-over-Year (YoY): Provides a broad view of inflation trends over a 12-month period, smoothing out seasonal fluctuations.
- Month-over-Month (MoM): Offers a more immediate, short-term look at price changes, useful for spotting emerging trends.
- Annualized Percent Change (3-Month/6-Month): Converts shorter-term changes (like 3 or 6 months) into an annual rate, giving an indication of current momentum if it were to continue for a full year.
Components of PCE
The PCE price index encompasses a wide range of goods and services. Its core version, Core PCE, is particularly important because it strips out the often-volatile prices of food and energy, offering a clearer picture of underlying inflation trends. This stability makes Core PCE a more reliable indicator for long-term economic analysis and policy formulation.
For more detailed information on PCE, you can refer to resources from the Bureau of Economic Analysis (BEA) or the Federal Reserve Economic Data (FRED).
