Personal Consumption Expenditures
The #CPI #basket tries to take a broad array of lifestyles into account.
Personal Consumption Expenditures (PCE) index is felt to be more accurate for the Fed.
It's an estimate of inflation.
Generally tend to be big categories
- durable goods
- non-durable goods
The measure of inflation that means more to the Fed
Impacts more on what you pay for your car, what your boss will pay you, currency
- somewhat unique to the USA
PCE is key to interest rates Fed publishes a forecast of the PCE