CPI* vs. PCE**

The “CPI” (Consumer Price Index) gets major attention and is often cited in the headlines and among the media and talking heads as if it’s “the” measure of inflation.  And market watchers often cite CPI movements as a predictor of Federal Reserve interest rate adjustments.

However, it is important to know that the Federal Reserve is said to prefer the “PCE” (Personal Consumption Expenditures) index to gauge inflation, rather than the better-known CPI.   While the CPI measures “prices” of goods and services, the PCE index measures “spending” on goods and services actually purchased and is known for indicating changes in consumer behavior.  The PCE index makes it easier to see the underlying inflation (or deflation) trends by excluding two categories – food and energy – where prices tend to swing up and down more dramatically and more often than other prices. The core PCE price index is closely watched by the Federal Reserve as it conducts monetary policy.

The next PCE index release is scheduled for February 29, 2024,


*CPI:  Released by The Bureau of U.S. Labor Statistics
**PCE:  Released by The Bureau of Economic Analysis of the U.S. Department of Commerce

Glenwood Financial Partners, LLC
3717 National Drive, Suite 211
Raleigh NC 27612

Important Information

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

Glenwood Financial Partners is a d/b/a of Eudaimonia Partners, LLC. Investment advisory services offered through Eudaimonia Partners LLC, a registered investment advisor. Advisory services are only offered to clients or prospective clients where Glenwood Financial and its representatives are properly licensed or exempt from licensure.

For additional information, please visit our website at https://www.glenwoodfinancialpartners.com/.

Share This