Personal Consumption Expenditures (PCE) Price Index for US - 26-1-2024

Price measures are used in the Core Personal Consumption Expenditure Price Index (PCEPI), which excludes food and fuel purchases for consumption purposes. Prices are weighted based on total spending. Consumers use it to track price changes. It measures purchasing trends and inflation.

Positive USD readings/bullishness should be viewed as positive, whereas negative readings/bearishness should be viewed as negative.

Today’s given signal : https://t.me/calendarsignal/10327

PCE Price Index tracking

PCE Price Index is calculated using the current dollar value of PCE. PCEPI measures price inflation or deflation over time. In order to determine the amount of periodic price changes, the PCEPI must include both a deflator (the PCE deflator) and real values.

Price changes are shown by both the PCE Price Index and the Core PCE Price Index (which excludes food and energy prices). Prices are also broken down by category in the PCEPI.

PCE Price Index is preferred by the Fed

When making monetary policy decisions, the Federal Reserve uses the PCE Price Index as the primary inflation index. In contrast to the comparable Consumer Price Index (CPI), the PCEPI is preferred by the Fed because:

Data from business surveys are also used in the PCEPI, which tends to be more reliable than consumer surveys used by the CPI. The PCEPI formula also takes into account short-term changes in consumer behaviour.

As a result, inflation is measured in a more comprehensive manner. Since even minimal inflation can prove to be an indicator of a growing economy, the Fed relies on the nuances revealed by the PCEPI.

Inflation is also measured by the Producer Price Index (PPI) and Gross Domestic Product Price Index.

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