PCE Inflation (Year over Year)
PCE inflation is the twelve-month change in the price index for personal consumption expenditures. It is the measure the Federal Reserve formally targets at 2%, which makes it the number that ultimately decides policy.
History
Why the Fed prefers it
Three reasons. PCE covers the whole of consumer spending, including things households do not pay for directly, such as employer-provided health insurance. Its weights are chain-linked, so they update as people substitute away from goods that become expensive. And it can be revised, which is a feature for a central bank trying to estimate a trend rather than a headline.
CPI, by contrast, is a fixed basket with out-of-pocket medical costs and a large shelter weight. The two measures usually agree on direction and differ on level, typically by a few tenths of a percentage point.
Core PCE is the policy number
The FOMC's 2% target is defined on headline PCE, but the projections members publish and the commentary they give almost always refer to core PCE, which strips food and energy. That is the series to watch if you want to anticipate the next decision.
The gap between headline and core matters when energy is moving sharply. A headline spike that does not reach core is usually treated as transitory; one that does reach core changes the policy path.
Release timing and revisions
PCE arrives with the personal income and outlays report, usually at the end of the month following the reference month, a week or two after CPI. It is released with the previous month's data revised, and the revisions are occasionally large enough to change the picture.
Because it is published later, CPI usually sets the market's first reaction and PCE confirms or denies it. That sequencing is why a hot CPI print can move rates for two weeks before the PCE data arrives.
How this reading is calculated
We pull PCEPI from FRED, apply the transform shown above, and keep every observation the source publishes. Missing dates are dropped rather than filled, so holidays leave gaps instead of fake zeroes. The percentile is the share of observations since 1960 that sit below today's value.
The file is rebuilt daily. Derived series are computed by us from public-domain inputs and the formula is stated on this page, so anyone can reproduce the number from the original release.
How to read the percentile
The percentile compares today's reading with the indicator's own history, not with other indicators. A 20th percentile on this page means the current reading is lower than four fifths of all observations since 1960; it says nothing about whether that is good or bad for markets.
Extremes are the useful part. A reading above the 90th or below the 10th percentile is unusual enough to be worth explaining, and unusual readings tend to mean-revert. The middle of the distribution is mostly noise.
What is free and what is member-only
The current reading, the percentile and the full historical record are free. The most recent months of data are reserved for members, because that is the part that tells you what the indicator is doing right now rather than what it did years ago.
Members see every observation through the latest release, the same chart without the mask, and the same numbers on every indicator page. Nothing on this site is intraday.
Distribution since 1960
Each row is the share of historical observations at or below that level. A reading in the 90th percentile is higher than nine tenths of the record.
Important
Not investment advice. This page is published for information and education only. It is not a recommendation, solicitation, or offer to buy or sell any security. Market data may be delayed, incomplete, or revised. Indicators describe the past; they do not forecast returns. Past performance does not guarantee future results. Do your own research or consult a licensed financial professional before acting on anything you read here.
Questions
Which matters more, CPI or PCE?
For markets, CPI moves prices first because it arrives earlier. For policy, PCE matters more because it is the official target. The two rarely diverge for long.
Why is PCE usually lower than CPI?
Mostly weights and scope: PCE gives less weight to shelter and more to goods, and it includes spending that CPI excludes. The formula effect explains the rest.
What is core PCE?
PCE excluding food and energy. It is the series the Fed's summary of economic projections is built around and the one most quoted in policy commentary.
Why is the latest data locked?
The current reading and the entire history are free. The most recent releases are reserved for members.