What the PCE inflation rate measures
This chart tracks how much the Personal Consumption Expenditures (PCE) price index has risen over the past twelve months. The index is published by the Bureau of Economic Analysis about two weeks after CPI. It measures prices of everything consumed by or on behalf of households, including spending paid for by employers and government programs, such as employer health insurance and Medicare. That broader scope and different weights make it distinct from the CPI.
How to read this chart
Read the line against an imaginary horizontal line at 2% – the Federal Reserve’s formal inflation target since 2012. Long stretches below 2%, as in most of the 2010s, encouraged the Fed to keep rates low; the jump well above 2% from 2021 triggered the rate hikes of 2022–2023. Historically PCE has come in roughly 0.2 to 0.5 points under CPI inflation.
The latest reading in context
- At 3.6%, the latest reading is below its 5-year average of 3.9% and above its 10-year average of 2.9%.
- Of all 801 monthly readings since January 1960, 68% were lower than today’s and 32% were higher.
- Direction: up 0.2 points over the past month; up 0.3 points over the past six months; up 0.9 points over the past year.
- The highest value on record is 11.6% (March 1980, 46 years ago); the lowest is −1.5% (July 2009, 17 years ago).
- The full history spans 9 US recessions, shaded grey on the chart.
Why it matters
This is the number the Fed uses to judge whether it is meeting its price-stability mandate, and the one in the FOMC’s quarterly economic projections. Because it updates its weights as consumers switch between products, many economists see it as a more accurate picture of the cost of living than the CPI.
What moves the PCE inflation rate
- The same forces as CPI – energy, food, shelter, goods and services prices
- A larger weight on health care, a smaller weight on housing than CPI
- Substitution as households shift to cheaper goods when prices rise
Key moments in its history
- 1980Peaked above 11%.
- Jan 2012The Fed formally adopted a 2% PCE inflation target.
- Aug 2020The Fed moved to flexible average inflation targeting, aiming to make up for past shortfalls.
- Mid-2022Rose above 7%, the highest since the early 1980s.
PCE Inflation Rate data tables
Average by decade
| Decade | Average | High | Low |
|---|---|---|---|
| 2020s (so far) | 3.5% | 7.2% | 0.5% |
| 2010s | 1.5% | 3.0% | 0.0% |
| 2000s | 2.1% | 4.1% | −1.5% |
| 1990s | 2.3% | 5.2% | 0.6% |
| 1980s | 5.0% | 11.6% | 1.6% |
| 1970s | 6.4% | 11.6% | 3.0% |
| 1960s | 2.1% | 4.9% | 0.5% |
Last 12 months
| Period | Value | Change |
|---|---|---|
| Sep 2026 | 3.6% | +0.2 pts |
| Aug 2026 | 3.4% | +0.1 pts |
| Jul 2026 | 3.4% | −0.1 pts |
| Jun 2026 | 3.5% | −0.4 pts |
| May 2026 | 3.8% | +0.2 pts |
| Apr 2026 | 3.6% | +0.2 pts |
| Mar 2026 | 3.4% | +0.6 pts |
| Feb 2026 | 2.8% | +0.1 pts |
| Jan 2026 | 2.7% | 0.0 pts |
| Dec 2025 | 2.8% | +0.1 pts |
| Nov 2025 | 2.7% | +0.1 pts |
| Oct 2025 | 2.7% | −0.1 pts |
Monthly values. Decade figures are averages of the monthly values in each decade. The complete history is available as a CSV file.
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PCE Inflation Rate: questions and answers
What is the difference between PCE and CPI inflation?
They differ in scope (PCE includes spending made on behalf of households), weights (PCE gives less weight to housing), formula (PCE adjusts quickly as people substitute goods) and source data. PCE usually comes in slightly lower.
Why does the Fed prefer PCE?
It covers a wider range of spending, updates its weights continuously and can be revised as better data arrive, which the Fed considers a more accurate measure of overall inflation.
When is PCE inflation released?
The BEA publishes it in the Personal Income and Outlays report near the end of each month, covering the previous month.
Where does the data on this chart come from?
From the U.S. Bureau of Economic Analysis. ChartWidgets downloads the series (PCEPI) from FRED, the Federal Reserve Bank of St. Louis database, and checks for new releases every day. The last update was on November 1, 2026.