PCE Price Index
Latest data: August 1, 2026 · Updated automatically from official sources
The Personal Consumption Expenditures (PCE) price index is the Federal Reserve’s preferred measure of inflation and the yardstick for its 2% target. Published by the Bureau of Economic Analysis, it re-weights its basket as consumers substitute away from goods that become relatively more expensive — something the CPI’s fixed basket cannot do — which usually leaves PCE inflation reading a bit lower than CPI.
Latest readings
- Headline PCE was up 3.7% year over year in July 2026, compared with 3.7% in the prior period and 2.6% a year earlier.
- Core PCE was up 3.3% year over year in July 2026, compared with 3.3% in the prior period and 2.9% a year earlier.
Headline vs. core PCE inflation
Core PCE vs. core CPI
Distance from the Fed’s 2% target
- Headline PCE inflation was 3.7% in July 2026, 1.7 percentage points above the 2% target. It was last at or below 2% in February 2021 (1.8%).
- Core PCE inflation was 3.3% in July 2026, 1.3 percentage points above the 2% target. It was last at or below 2% in February 2021 (1.7%).
Recent readings
| Period | Core PCE (YoY) | Change | Headline PCE (YoY) |
|---|---|---|---|
| July 2026 | 3.3% | 0.00 pp | 3.7% |
| June 2026 | 3.3% | -0.12 pp | 3.7% |
| May 2026 | 3.5% | +0.13 pp | 4.1% |
| April 2026 | 3.3% | +0.08 pp | 3.8% |
| March 2026 | 3.3% | +0.20 pp | 3.5% |
| February 2026 | 3.1% | -0.05 pp | 2.9% |
| January 2026 | 3.1% | +0.13 pp | 2.9% |
| December 2025 | 3.0% | +0.14 pp | 2.9% |
| November 2025 | 2.8% | +0.08 pp | 2.8% |
| October 2025 | 2.8% | -0.08 pp | 2.7% |
| September 2025 | 2.8% | -0.08 pp | 2.8% |
| August 2025 | 2.9% | +0.05 pp | 2.8% |
| July 2025 | 2.9% | — | 2.6% |
Key statistics
| Indicator | Latest | Year ago | 5-yr avg | Long-run avg | Record high | Record low | Data since |
|---|---|---|---|---|---|---|---|
| Headline PCE (YoY) | 3.7% | 2.6% | 4.0% | 3.3% | 11.6% (Mar 1980) | -1.5% (Jul 2009) | 1960 |
| Core PCE (YoY) | 3.3% | 2.9% | 3.8% | 3.2% | 10.2% (Feb 1975) | 0.6% (Jul 2009) | 1960 |
| For comparison: core CPI | 2.5% | 3.1% | 4.1% | 3.7% | 13.6% (Jun 1980) | 0.6% (Oct 2010) | 1958 |
Why the Fed prefers PCE
The Federal Reserve formally adopted a 2% inflation goal, measured by the PCE price index, in 2012. It prefers PCE over CPI for three reasons. First, PCE’s formula updates spending weights continuously, so it reflects substitution — buying chicken instead of beef when beef prices jump. Second, it is broader: it includes spending made on behalf of households, such as employer-provided health insurance and Medicare and Medicaid payments. Third, PCE can be revised as better source data arrive, so the historical record is more consistent.
Core PCE and the policy outlook
Policymakers focus on core PCE, which excludes food and energy, because it has historically been a better predictor of future inflation than the headline rate. When core PCE runs persistently above 2%, the Fed tends to keep interest rates higher for longer; when it settles near 2%, rate cuts become more likely. The “Distance from target” panel above shows how far each measure currently sits from the 2% goal.
Release schedule
BEA publishes the PCE price index in its monthly Personal Income and Outlays report, usually in the last week of the following month — roughly two weeks after CPI. Because many PCE components are built from CPI and PPI data, forecasters can estimate PCE fairly accurately before it is released.
Frequently asked questions
Why is PCE inflation usually lower than CPI inflation?
PCE gives housing a smaller weight than CPI, includes a broader range of spending, and uses a formula that captures substitution between products. Together these differences typically put PCE inflation a few tenths of a point below CPI.
What is the Fed’s inflation target?
The Federal Open Market Committee targets inflation of 2% per year over the longer run, as measured by the PCE price index.
Related data
Data are retrieved automatically from the original statistical agencies (via the Federal Reserve Bank of St. Louis FRED database) and may be revised by the source. Year-over-year changes are calculated by econHQ. See About & methodology for details.