The most important inflation measure, used by the Fed for its "2% inflation" target.
Japan time (JST, winter)22:30
Japan time (JST, summer)21:30
Importance★★★
FrequencyOnce a month
Release dateAround the end of each month (with personal income and spending)
Released byUS Bureau of Economic Analysis (BEA)
1A 30-second chat
JUDITHHow is it different from CPI?
JADEBoth are about prices, but the Fed uses PCE to measure its 2% target
JUDITHSo is it more important than CPI?
JADEFor the Fed, yes. But CPI comes out first, so the market has already partly priced it in. It moves a lot when the result differs from CPI
2Just check this
1
Core PCE (YoY)
Inflation excluding food and energy. Compare it with the Fed's 2% target
2
Personal income
Growth in household income
3
Personal consumption expenditures
How much households spent. Shows how strong the economy is
3How does the market move?
Price moves on the size of the gap vs. forecast, more than on whether the result is good or bad
▲ Stronger than expectedStrong inflation → rate cuts move further away → USD tends to rise, Nasdaq tends to fall
▼ Weaker than expectedWeak inflation → rate cuts get closer → USD tends to fall, Nasdaq tends to rise
These are common patterns. Depending on the news at the time, price can move the other way.
The direction is different every time. Right after the release, price can swing either way.
4Prop firm watch-outs
PCE comes out at the same time as personal income and personal spending, so when the numbers disagree, price tends to swing up and down. At month-end it can overlap with other data, so check all the releases for that day in advance.
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