Personal consumption expenditure


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Personal consumption expenditure (PCE)

An inflation gauge used by the Federal Reserve Bank to track changes in the prices of goods and services used for personal consumption. The PCE is measured using a chain base index which closely follows the purchasing tendencies of consumers by allowing the goods and services included in the PCE basket to change as consumer preferences change. The Consumer Price Index (CPI), another inflation gauge used by the Federal Reserve, differs from the PCE in that the CPI does not account for changes in consumer preferences because it tracks the change in prices of a fixed basket of goods and services. This is why the Federal Reserve prefers the PCE and not the CPI as the inflation gauge. See: Chain base index, Consumer Price Index

Personal Consumption Expenditures

A measure of inflation in the United States that considers how much people spend on household goods and services, while also weighting for the relative demand for those particular goods and services. In addition to calculating raw changes in prices, PCE measures rises and declines in demand based on those price changes, which, in turn, may enhance or dampen the effects of inflation. The PCE is compiled by the U.S. Department of Commerce and has little effect on the market because its results are usually predictable. It is not as widely used as the Consumer Price Index, which does not consider changes in demand as they occur. See also: PCEPI.
References in periodicals archive ?
Factors contributing to the decrease in real GDP for the second quarter were primarily negative output in various categories including private inventory investment, nonresidential fixed investment, residential fixed investment, personal consumption expenditures, and exports.
Early in 1995, the growth of personal spending - as measured by personal consumption expenditures - slowed sharply, increasing a meager 0.
The contribution of personal consumption expenditures also fell between the quarters.
Furthermore, the core personal consumption expenditure (PCE) price index rose by 0.
Created by a team of Visa research and economic experts, CCE draws on government data in methods similar to the Personal Consumption Expenditure (PCE) index, which annually monitors consumer-related spending.
Methodology for the CCE index draws on government data in methods similar to the Personal Consumption Expenditure (PCE) index that annually monitors consumer-related spending.
5 percent in June, while personal consumption expenditures (PCE) decreased by 0.
It added that personal consumption expenditures (PCE) increased USD 107.
Accounting for approximately 70 percent of the nation's GDP, personal consumption expenditures represent the backbone of the American economy.
The price index for personal consumption expenditures, watched by the Federal Reserve to assess inflation, dropped 0.
Specifically, the increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures, private inventory investment, nonresidential fixed investment, exports, and federal government spending that were partly offset by a negative contribution from residential fixed investment.
consumer spending was confirmed by data on April incomes of and personal consumption expenditures by Americans, released Friday, raising renewed expectations of higher U.

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