USD — Core PCE Price Index m/m

Core PCE Price Index m/m measures the percentage change from the previous month in the prices of goods and services purchased by, or on behalf of, people in the United States, excluding food and energy. It is produced by the U.S. Bureau of Economic Analysis (BEA) and published monthly in the Personal Income and Outlays report. The monthly figure is seasonally adjusted. PCE has broader coverage than CPI because it includes spending paid on behalf of households, such as parts of employer- and government-funded healthcare, and its chain-type weighting allows the basket to change as consumers alter their spending patterns.

The core measure removes food and energy because their prices can move sharply from month to month, making the underlying inflation trend harder to see. This does not mean those categories are unimportant to consumers. The Federal Reserve’s 2% longer-run inflation objective is defined using the year-over-year headline PCE price index, while core PCE is monitored as an important guide to persistent inflation pressure.

To interpret the release, compare Actual with Forecast, then check Previous and any revisions. A higher-than-expected core PCE reading can raise expectations that the Federal Reserve will keep interest rates higher for longer, which may lift Treasury yields and support the USD. A softer reading can have the opposite effect. The reaction depends on what markets had already priced, the state of the labour market, growth expectations and whether the surprise was concentrated in volatile components.

Look beyond one monthly number. Review the three- and six-month annualised pace, the year-over-year rate and the split between goods and services. Housing-related services and other persistent service categories often receive particular attention. PCE estimates are built from multiple source datasets and can be revised when the BEA receives more complete information or updates the national accounts, so the latest value should be read together with revisions to prior months.

Official source: U.S. Bureau of Economic Analysis (BEA), Personal Income and Outlays.