The expenditure categories series represents the number of personal consumption expenditure categories or goods and services while the expenditure series represents the fraction of expenditures by consumers on goods that are experiencing inflation significantly below its historical average.
Displayed above are two diffusion indices meant to show the fraction of inflation rates among personal consumption expenditure categories, which are significantly greater than their historical average. The expenditure categories series represents the number of personal consumption expenditure categories or goods and services while the expenditure series represents the fraction of expenditures by consumers on goods that are experiencing inflation significantly above its historical average. Skip to content Readability Tools.
Reader View. Dark Mode. High Contrast. Economy Economics. Table of Contents Expand. What Are PCEs? Understanding PCEs. How to Measure PCEs.
PCE vs. Consumer Price Index. Pros and Cons of PCEs. Example of PCE. The Bottom Line. Key Takeaways Personal consumption expenditures measure consumer spending for a period of time.
PCEs include how much is spent on durable and non-durable goods, as well as services. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Personal Income and Outlays is a report produced by the Bureau of Economic Analysis that tracks personal income and monthly spending.
Consumer Spending Definition Consumer spending is the amount of money spent on consumption goods in an economy. Real gross domestic product real GDP is an inflation-adjusted measure of the value of all goods and services produced in an economy.
Partner Links. Related Articles. Lifestyle Advice History of the Cost of Living. Data for PCE by Function are available for years The Summary Tables are located under the Estimates tab. Users should consult the BEA Web site for details on obtaining the data and other resources. Also, users are encouraged to explore the available resources under the Methodologies tab on the Consumer Spending page.
Before using the data, users are strongly encouraged to review the appropriate chapters of the NIPA Handbook. Please enable JavaScript in your browser.
Sixty-four percent went toward services. Americans spent more than one-third of expenditures on goods. Here are the details:. Source: "Personal Income and Outlays. Most personal consumption expenditures are made through some form of retailing. The latest retail sales statistics reveal that spending is at a healthy pace. PCE reveals how much households spend on immediate consumption versus saving for the future. Higher consumption levels translate into greater GDP growth in the short term.
On the other hand, a higher savings rate is good for long-term economic health. Banks use savings to fund loans for mortgages and business investments. Analysts use the PCE report to understand household buying habits. For example, it shows how shopping patterns change in response to sharp price increases. That happens most often when gas prices rise or fall. In that way, PCE reveals the elasticity of demand. When demand for a good or service is elastic , people cut back even if the price goes up just a little.
When demand is inelastic , people continue to buy the same amount despite significant price increases. It is more accurate than the more well-known Consumer Price Index. It's part of the National Income and Product Accounts. They spend most of it on personal outlays.
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