The PCE & What It Means For Our Economy
The personal consumption expenditures (PCE) measures consumer spending on goods and services in the United States. The PCE is a significant driver of GDP and can provide an idea of economic strength and how certain price changes can affect consumer spending. Here are some recent trends with the PCE and what they signify for the US economy:
PCE index rose 2.8% over the prior year during the month of December and rose .2% faster than November
These monthly figures were in line with Wall Street expectations
After these numbers were released, the Fed noted they needed to see more progress on inflation decreasing before moving again on rates, its first pause following three consecutive cuts at the end of 2024
This also indicated that the central bank was going to take things slow
A slower approach allows the Fed to get clarity on Trump’s policies and the effects they will have on the economy
To read more, check out this article by Yahoo Finance: New inflation reading reinforces Fed's go-slow strategy