US PCE Price Index

The US PCE price index is the measure the Federal Reserve uses to gauge inflation and its 2% target. Many traders know CPI well but underestimate PCE, even though this is the very number Fed officials refer to in their statements and projections. At the top of this page you can see the next release time in Tehran time, the latest actual figure, the forecast and previous values, and a list of past releases from the economic calendar. This guide explains what the core PCE index is, how it differs from CPI, and why the market's reaction to it follows a pattern of its own.

What is the PCE index and who publishes it?

PCE stands for Personal Consumption Expenditures. The US Bureau of Economic Analysis (BEA), part of the Department of Commerce, publishes a monthly report titled "Personal Income and Outlays" that covers household income, how much households spend, and the price index for that spending. The PCE price index is the inflation part of this report.

The figure that gets the most attention on the economic calendar is core PCE , that is, the price index excluding food and energy. This page also tracks its two figures: the monthly change (m/m) and the annual change (y/y). The monthly figure shows how fast inflation moved in the latest month, and the annual figure shows how far inflation is from the Fed's 2% target.

Why does the Fed prefer PCE to CPI?

Since 2012, the Federal Reserve has officially defined its inflation target based on PCE. Three main differences set these two indices apart:

Feature	CPI	PCE
Publisher	Bureau of Labor Statistics (BLS)	Bureau of Economic Analysis (BEA)
Scope	Costs paid by households themselves	Broader; also includes costs others pay on behalf of households, such as part of healthcare
Housing weight	Higher	Lower
Calculation method	More fixed basket	Accounts for consumer substitution; if a product becomes more expensive and people switch to a cheaper alternative, the index reflects this

As a result of these differences, PCE usually runs slightly below CPI and gives a more complete picture of the real cost of living. That is why when the Fed Chair talks about "inflation returning to 2%", they mean PCE, and this very report can shape the tone of the next Fed interest rate decision . See the latest rates of the Fed and other banks on the central bank interest rates page.

PCE release time in Tehran time

The PCE report is monthly and is usually released in the last days of the month for the previous month, that is, after that month's CPI and PPI. The release time is 8:30 a.m. New York time, which is 16:00 Tehran time during US daylight saving time and 17:00 in winter. Sometimes, at the same time or close to it, US GDP estimates are also released, making the day busier.

Why does the market react more calmly to PCE?

Most of the raw data behind PCE is available before its release. Once US inflation (CPI) and the producer price index are out, analysts convert their components and estimate core PCE fairly accurately. That is why the gap between the actual figure and the forecast is usually small, and market moves on PCE day are often milder than on CPI day.

But "usually" does not mean "always". If core PCE comes in above expectations, especially in the weeks close to a Fed meeting, the dollar can strengthen and gold can come under pressure; a figure below expectations usually has the opposite effect. Revisions to the previous month's figure also matter: sometimes a revision to the prior figure sends a stronger message than the new figure itself. Alongside inflation, the growth in personal income and spending in the same report shows the state of household consumption, the main engine of the US economy.

Trading on PCE release day

• If you have seen that month's CPI and PPI, you already know what figure the market expects; the real surprise comes when PCE deviates from those estimates.
• The market's usually calmer reaction is no reason to be careless. Spreads widen at the moment of release and a tight stop loss can be triggered by a brief move; read more about setting it properly in the article What is a stop loss .
• This report is usually the month's last major inflation data and is sometimes released on a Friday; if you keep positions open over the weekend, also factor in the risk of a price gap at Monday's open and size your position with the trader's calculator .

This guide explains an economic indicator and is not a market forecast or investment advice.