United States Core PCE Price Index YoY

Info

History

Chart

Impact:

High

Latest Release:

Date:

Surprise:

-0.1%

USD

Actual:

1.3%

Forecast: 1.4%

Previous/Revision:

1.3%

Period: Nov

What Does It Measure?

The Core Personal Consumption Expenditures (PCE) Price Index measures the changes in the prices of goods and services purchased by consumers in the United States, excluding food and energy prices due to their volatility. It primarily focuses on the inflationary pressure within the economy, assessing how household spending patterns and overall price levels affect consumers’ purchasing power.

Frequency

This indicator is released on a monthly basis, with the data typically published on the last business day of each month as a preliminary estimate.

Why Do Traders Care?

Traders are particularly attentive to the Core PCE Price Index because it is the Federal Reserve's preferred inflation gauge, influencing monetary policy decisions. Higher-than-expected readings may be interpreted as inflationary pressures, likely prompting the Fed to raise interest rates, which can strengthen the US dollar and impact stock markets negatively.

What Is It Derived From?

The Core PCE Price Index is derived from the Bureau of Economic Analysis (BEA) which collects data through surveys of businesses and consumers, primarily using a Laspeyres index method to reflect price changes relative to a base period. The index incorporates a wide variety of goods and services, reflecting changing consumption patterns through a weighting system that represents consumer expenditures.

Description

Preliminary reports of the Core PCE Price Index are based on early estimates and can be revised later; final reports provide a more accurate reflection of the inflation trends but are released subsequently. The month-over-month comparison offers insights into short-term price movements, although the year-over-year measure is emphasized for its ability to capture long-term trends and eliminate seasonality effects.

Additional Notes

The Core PCE Price Index is a coincident indicator, providing a real-time assessment of inflationary trends, which are critical for understanding the broader economic environment. It often correlates with other inflation measures, such as the Consumer Price Index (CPI), and reflects the overall economic momentum impacting business and consumer confidence both nationally and globally.

Bullish or Bearish for Currency and Stocks

Higher than expected: Bullish for USD, Bearish for Stocks. A hawkish tone: Signaling higher interest rates due to inflation concerns, is usually good for the USD but bad for Stocks due to higher borrowing costs.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number	Better than forecast for the currency (or previous revise better)
Red Number	Worse than forecast for the currency (or previous revise better)
Hawkish	Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish	Favors lower rates to boost growth, weakening the currency but lifting stocks.

Date	Actual	Forecast	Previous	Surprise
Dec 23, 2015	1.3%	1.4%	1.3%	-0.1%
Jun 25, 2015	1.2%	0.8%	1.3%	0.4%
Jun 01, 2015	1.2%		1.3%