PCE - Personal Consumption Expenditures

Definition:
Value of the goods and services purchased by, or on the behalf of, US residents.
At the national level, BEA publishes annual, quarterly, and monthly estimates of consumer spending.
Link to BEA (Bureau of Economic Analysis)

BEA releases the following 3 indicators together:

• Personal Income

• Disposable Personal Income

• Personal Consumption Expenditure (PCE)

At the time of writing this article, the latest print was the July 2022 release that was published on Aug 26, 2022.

Personal income is the income received by, or on behalf of, all persons from all sources: from participation as laborers in production, from owning a home or business, from the ownership of financial assets, and from government and business in the form of transfers. It includes income from domestic sources as well as the rest of world. It does not include realized or unrealized capital gains or losses.

Disposable personal income is the income available to persons for spending or saving. It is equal to personal income less personal current taxes.

Personal consumption expenditures (PCE) is the value of the goods and services purchased by, or on the behalf of, "persons" who reside in the United States.

PCE is similar to CPI with the following differences:

• Even though CPI is more popular and is more cited, PCE is used widely by the Fed for policy making.

• PCE appears to include more items in the basket of expenditures and is obtained from more reliable sources. CPI, on the other hand, provides more detailed results.

• PCE allows for manipulation of the results for changes in consumer behavior.

Below is the image of the table released by BEA (source: BEA)