The PCE or Personal Consumption Price Index is a measure of the prices that people living in the United States pay for goods and services. The PCE determines inflation in the United States by measuring changes in the cost of living for households. The Federal Reserve has preferred PCE over to CPI to target inflation since 2000. There are three reasons for this; PCE updates its weights more regularly, PCE provides broader coverage of the economy, and historical PCE data can be revised more completely. Core PCE Price Index Annual Change in the United States is tracking to be 4% by the end of Q3 2023. PCE is the largest component of GDP as it makes up consumer expenditures. The long term average is about 64% of total GDP, but more recently it has crept up to above 68%. Below is more places to find information on PCE and its role in targeting and managing inflation.
BEA- https://www.bea.gov/data/personal-consumption-expenditures-price-index#:~:text=What%20is%20the%20Personal%20Consumption,pay%20for%20goods%20and%20services.
What is the process that is done in order to calculate PCE? I know that CPI is a fairly labor intensive process that requires economists to call stores and gather data individually.
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