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Economic Data (USA)

Friday, June 26, 2020

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

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


Consumer Spending (Personal Consumption Expenditures)

Predicted: +5.0%

  • Actual: +8.2%
  • Actual (2012 Chained* Dollars): +8.1%

Personal Income

Predicted: -5.0%
  • Actual: -4.2%

  • Disposable Personal Income, Current Dollars: -4.9%
  • Disposable Personal Income (2012 Chained* Dollars): -5.0%


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: Unchanged
Actual: +0.1%

  • Change from 12 months previous: +0.5%

Core PCE Price Index
( = PCE Price Index minus food and energy)
Predicted: Unchanged
Actual: +0.1%

  • 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:

"...Coronavirus (COVID-19) Impact on May 2020 Personal Income and Outlays

The May estimate for personal income and outlays was impacted by the response to the spread of
COVID-19. Federal economic recovery payments continued but were at a lower level than in April, and government “stay-at-home” orders were partially lifted in May. The full economic effects of the COVID-19 pandemic cannot be quantified in the personal income and outlays estimate for May 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..."


CHART: Month-to-Month Change In Personal Income - May 2020 Update
CHART: Month-to-Month Change In Personal Income
May 2020 Update



*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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