#PCEInflationWatch The Personal Consumption Expenditures (PCE) Price Index is a key measure of inflation in the United States, reflecting changes in the prices of goods and services purchased by consumers. It is known for capturing inflation across a broad range of consumer expenditures and reflecting changes in consumer behavior.

In December 2024, the PCE Price Index increased by 2.6% compared to the same month a year earlier. The core PCE Price Index, which excludes the more volatile food and energy categories, increased by 2.8% over the same period.

The Federal Reserve Bank of Cleveland provides daily inflation “nowcasts” for the PCE and Consumer Price Index (CPI). These nowcasts provide estimates of current inflation rates before the official data is released, helping to assess the current state of inflation.

In addition, the Cleveland Fed calculates the median PCE inflation rate, which focuses on the middle component of the distribution of price changes. This measure can provide a clearer signal of underlying inflation trends by omitting outliers. In December 2024, the average PCE inflation rate was 0.2% for the month and 3.2% for the past 12 months.