Why is PCE price important?

Why is PCE price important?

A measure of the prices that people living in the United States, or those buying on their behalf, pay for goods and services. The PCE price index is known for capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior. The PCE Price Index is the Federal Reserve’s preferred gauge of inflation, as it more accurately reflects consumers’ spending habits than the Consumer Price Index (CPI). CPI measures prices at the end user level; PPI measures the prices producers pay at the wholesale level. Headline CPI tracks all prices, but core CPI strips out food and energy prices. The PCE’s weighting and source material make it the Federal Reserve’s preferred inflation measure. US Core PCE Price Index YoY is at 4.42%, compared to 4.68% last month and 5.04% last year. This is higher than the long term average of 3.23%.

How does PCE affect stock market?

It measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD. It measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD. The most well-known indicator of inflation is the Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households. The most well-known indicator of inflation is the Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households.