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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.