Market MakeHer Podcast 68. Remix: What Is the PCE Index & Why Does It Matter to Us?
*This content was taken from Episode 35, which was originally recorded in May 2024, but has been edited to mainly focus on the important terms PCE, PPI & CPI to help put into context the new data we are seeing now in December 2024 and how it affects us as consumers, workers, and investors.*
What Is PCE (Personal Consumption Expenditures)?
The PCE price index is considered The Fed’s preferred index. It’s kinda like how we use the S&P 500 indice to measure the stock market, but it’s a price index that measures specific goods and services and it’s regionalized. Basically, it's a guage on what Americans are spending and helps track inflation. It’s currently +2.8% YOY (October 2024), which is up from +2.7% in September 2024 - not what we want to see, we’d like to see it go down.
Updated Core PCE Link (excludes food and energy)
In Episode 15 we explained inflation and learned about PPI & CPI:
PPI: producer price index = is the perspective of the seller
CPI: consumer price index = is the perspective of the buyer
What is the difference between the CPI and the PCE Index?
The CPI measures the change in the out-of-pocket expenditures of all urban households and PCE measures the change in goods and services consumed by all households, and nonprofit institutions serving households.
Dot Plot (summary of economic projections from the FOMC)
Ask Us a Question, Leave a Review, Follow, Subscribe:
🔗All Market MakeHer Links
✨ Jess Inskip: TikTok Instagram
✨ Jessie DeNuit: TikTok Instagram
About Us 🌚🌞
Market MakeHer is an investing education podcast taught by a 15-year finance expert to her friend, a beginner investor. Our mission is to demystify the stock market and make financial literacy accessible to all self-directed investors! We teach complex investing topics in a different way - from "Her" perspective.
Important Disclosures:
Investing involves risk. There is always potential to lose money when investing in securities. Market MakeHer LLC provides educational content and resources for informational purposes only. We are not registered financial advisors & do not provide personalized investment advice. Consult with a licensed financial advisor before making investment decisions.