Personal Consumption Expenditures

Personal Consumption Expenditures (PCE) refer to the total amount of money that individuals and households spend on goods and services for personal use. This includes everyday items like food, clothing, healthcare, and entertainment. Economists use PCE to measure consumer spending, which is a key driver of economic growth. It reflects consumer confidence and helps gauge inflation by showing how prices of these goods and services change over time. The PCE price index is also an important indicator that the Federal Reserve uses to make decisions about monetary policy.