The PCE Price Index measures changes over time in the prices consumers pay for goods and services across the economy. Produced by the Bureau of Economic Analysis, it is broader than CPI because it captures a wider range of spending and adjusts for changes in consumer behavior, such as substituting cheaper goods for more expensive ones. The Federal Reserve generally prefers PCE as its primary inflation gauge because it provides a more comprehensive view of inflation trends. In plain English, PCE is one of the government’s main scorecards for how quickly consumer prices are rising.
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