Glossary
PCE price index (personal consumption expenditures)
The US price index for personal consumption expenditures, published monthly by the BEA. The Fed's 2% inflation goal is defined in terms of it.
The PCE price index (personal consumption expenditures) is published by the US Bureau of Economic Analysis (BEA) in its monthly Personal Income and Outlays report. It measures the prices that people living in the US, or those buying on their behalf, pay for goods and services. The core version excludes food and energy to make underlying inflation easier to see. The FOMC judges that inflation of 2% over the longer run, measured by the annual change in the PCE price index, is most consistent with its mandate.
Example
For August 2026, BEA reported core PCE prices up 3.0% from a year earlier. Against the 2% goal that is 1.0 percentage point, or 100 bp, too high. An index rising from 125.0 to 127.5 over twelve months is up 2.5 ÷ 125.0 = 0.02, exactly 2%.
Why it matters
PCE usually arrives after CPI and PPI for the same month, but it is the measure the Fed targets. In our lab, the early-direction effect on gold after PCE and eight other US releases was positive until 2018 and negative in every year from 2020.