Different Inflation Measures, Different Purposes

December 19, 2020
lady-with-credit-card

The inflation measure most often mentioned in the media is the Consumer Price Index for All Urban Consumers (CPI-U), which tracks the average change in prices paid by consumers over time for a fixed basket of goods and services. In setting economic policy, however, the Federal Reserve Open Market Committee focuses on a different measure of inflation — the Personal Consumption Expenditures (PCE) Price Index, which is based on a broader range of expenditures and reflects changes in consumer choices. More specifically, the Fed focuses on "core PCE," which strips out volatile food and energy categories that are less likely to respond to monetary policy. Over the last 10 years, core PCE prices have generally run below the Fed's 2% inflation target.



All Securities Through Money Concepts Capital Corp., Member FINRA / SIPC

11440 North Jog Road, Palm Beach Gardens, FL 33418 Phone: 561.472.2000


Copyright 2010 Money Concepts International Inc.


Investments are not FDIC or NCUA Insured


May Lose Value - No Bank or Credit Union Guarantee


This communication is strictly intended for individuals residing in the state(s) of MI. No offers may be made or accepted from any resident outside the specific states referenced.


Prepared by Broadridge Advisor Solutions Copyright 2020.


A family is walking through an airport with luggage.
June 28, 2025
Rising prices can make planning a budget-friendly family vacation challenging. Follow these tips to help.
A man and a woman are standing on a balcony.
June 28, 2025
Condominiums, or condos, appeal to home buyers of all ages who want to reap the benefits of homeownership while spending less time and money on upkeep.
A woman is sitting at a table using a laptop computer.
June 28, 2025
Only 54% of workers or their spouses have tried to estimate the savings they would need to live comfortably in retirement; have you?
A woman is sitting in a beach chair reading a book.
June 28, 2025
Travel spending was hit hard by the pandemic but surpassed pre-pandemic levels in 2024. Where are they now?
Show More