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Core PCE inflation

The Federal Reserve's preferred inflation measure: prices of everything US consumers buy, excluding food and energy.

The personal consumption expenditures (PCE) price index covers a wider range of spending than the CPI, including spending made on households' behalf such as employer-paid health insurance. Core PCE excludes food and energy prices, which swing with weather and oil markets.

Core PCE usually runs a little below core CPI because of differences in weights and coverage.

Why it matters

The Fed's 2% inflation target is defined on PCE, and it judges underlying pressure from the core measure. A sustained gap above 2% keeps the Fed leaning towards higher rates.

See the data: US core PCE.

General information, not advice.