# No improvement in PCE inflation index

**URL:** <https://discussion.fool.com/t/no-improvement-in-pce-inflation-index/79131>\
**Category:** Macro Economic Trends and Risks\
**Created:** [October 28, 2022, 4:50pm UTC](https://discussion.fool.com/t/no-improvement-in-pce-inflation-index/79131 "2022-10-28T16:50:40Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![WendyBG](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/wendybg/32/67464_2.png) [@WendyBG](https://discussion.fool.com/u/WendyBG)\
**Post date:** [October 28, 2022, 4:50pm UTC](https://discussion.fool.com/t/no-improvement-in-pce-inflation-index/79131/1 "2022-10-28T16:50:40Z")

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The Federal Reserve prefers the **personal consumption expenditures** (PCE) index to the Consumer Price Index (CPI). The Fed has a target of 2% inflation in the PCE index.

> **[CPI Vs. PCE Inflation: Choosing a Standard Measure | St. Louis Fed](https://www.stlouisfed.org/publications/regional-economist/july-2013/cpi-vs-pce-inflation--choosing-a-standard-measure)**
>
> The CPI and PCE price index are popular for measuring inflation. James Bullard suggests adopting a standard for estimating and adjusting for consumer inflation.

> **[Personal Income and Outlays, September 2022 | U.S. Bureau of Economic...](https://www.bea.gov/news/2022/personal-income-and-outlays-september-2022)**
>
> Personal income increased $78.9 billion (0.4 percent) in September, according to estimates released today by the Bureau of Economic Analysis (tables 3 and 5). Disposable personal income (DPI) increased $71.3 billion (0.4 percent) and personal...

Friday, October 28, 2022  
The **PCE price index** increased 0.3 percent in September. Excluding food and energy, the PCE price index increased 0.5 percent.

**Disposable personal income** (DPI) increased $71.3 billion (0.4 percent) and **personal consumption expenditures** (PCE) increased $113.0 billion (0.6 percent). [Note that spending is growing faster than income, which is stimulating the economy.]

Price indexes: Percent change from month one year ago

```
      May June July Aug Sept
  PCE 6.5 7.0 6.4 6.2 6.2
 PCE, 4.9 5.0 4.7 4.9 5.1

```

excluding food and energy

[end quote]

This pretty much guarantees that the Fed will raise the fed funds rate 0.75% in November and at least 0.5% in December. There is no evidence that their rapid tightening has reduced inflation significantly so far, if at all.

Wendy (can’t figure out how to align the table in the post. I tried using spaces and also \< pre\> like I used in the old system but they didn’t work)

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**Author:** ![mostlylong](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/mostlylong/32/3943_2.png) [@mostlylong](https://discussion.fool.com/u/mostlylong)\
**Post date:** [October 28, 2022, 10:41pm UTC](https://discussion.fool.com/t/no-improvement-in-pce-inflation-index/79131/2 "2022-10-28T22:41:11Z")

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> [@WendyBG](#):
>
> Wendy (can’t figure out how to align the table in the post. I tried using spaces and also \< pre\> like I used in the old system but they didn’t work)

someone previously shared this ([Markdown Cheat Sheet | Markdown Guide](https://www.markdownguide.org/cheat-sheet/)) or just search “markdown guide”

see section on tables ([Extended Syntax | Markdown Guide](https://www.markdownguide.org/extended-syntax/#tables))

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**Author:** ![Leap1](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/leap1/32/72176_2.png) [@Leap1](https://discussion.fool.com/u/Leap1)\
**Post date:** [October 28, 2022, 11:38pm UTC](https://discussion.fool.com/t/no-improvement-in-pce-inflation-index/79131/3 "2022-10-28T23:38:02Z")

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Wendy,

It is all about the IRA in 2023 and the results of the IRA going forward from 2024.