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Economic Data (USA)

Friday, May 29, 2020

PCE Price Index + Personal Income + Consumer Spending Report for April 2020

The Commerce Department's Bureau of Economic Analysis (BEA) released its report on The PCE Price Index, Consumer Spending and Personal Income for April 2020:


Consumer Spending (Personal Consumption Expenditures)
Predicted: -10.0%
Actual: -13.6%


Personal Income
Predicted: -5.0%
Actual: +10.5%


  • Disposable Personal Income, Current Dollars: +12.9%
  • Disposable Personal Income, 2012 Chained* Dollars: +13.4%


The above highlighted percentages represent the month-to-month change in Consumer Spending (aka Personal Consumption Expenditures), Personal Income and Disposable Personal Income for the entire United States.



Personal Consumption Expenditures (PCE) Price Index
Predicted: -0.5%
Actual: -0.5%

  • Change from 12 months previous: +0.5%

Core PCE Price Index
( = PCE Price Index minus food and energy)
Predicted: -0.5%
Actual: -0.4%

  • Change from 12 months previous: +1.0%

The yellow-highlighted percentages represent the month-to-month change in the prices associated with domestic personal consumption.  The PCE Price Index is different from the Consumer Price Index (CPI) in that it is a very broad measure of the prices associated with domestic products and services, while the CPI measures a more limited fixed basket of goods and services.

The broad nature of the PCE Price Index is key to why it is the Federal Reserve's preferred measure of inflation.  The Federal Open Market Committee (FOMC) pays very close attention to it.


The "predicted" figures are what economists were expecting, while the "actual" figures are the true or real figure.


From Today's Report:

"...The April estimate for personal income and outlays was impacted by the response to the spread of COVID-19, as federal economic recovery payments were distributed, and governments continued with “stay-at-home” orders. The full economic effects of the COVID-19 pandemic cannot be quantified in the personal income and outlays estimate for April because the impacts are generally embedded in source data and cannot be separately identified. For more information, see the “highlights” file and the Effects of Selected Federal Pandemic Response Programs on Personal Income table..."



*Chained dollars is a method of adjusting real dollar amounts for inflation over time, so as to allow comparison of figures from different years. The Commerce Department introduced the chained-dollar measure in 1996. Chained dollars generally reflect dollar figures computed with 2012 as the base year.

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