![personal consumption expenditures personal consumption expenditures](https://static.financialsense.com/historical/users/u3089/images/2017/04-personal-consumption-expenditures.png)
The two indexes, which have their own purposes and uses, are constructed differently, resulting in different inflation rates. The PCE Price Index is similar to the Bureau of Labor Statistics' consumer price index for urban consumers. The PCE Price index is the Federal Reserve’s preferred measure of inflation. The PCE price index is used primarily for macroeconomic analysis and forecasting.
#PERSONAL CONSUMPTION EXPENDITURES SERIES#
They also offer the series as a Chain-Type index, as above. The PCE Price Index is produced by the Bureau of Economic Analysis (BEA), which revises previously published PCE data to reflect updated information or new methodology, providing consistency across decades of data that's valuable for researchers. For example, if the price of beef rises, shoppers may buy less beef and more chicken. The change in the PCE price index is known for capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior. Net exports rose by $70 billion in the second quarter, contributing 1.4 percentage points to GDP growth.The Personal Consumption Expenditures Price Index is a measure of the prices that people living in the United States, or those buying on their behalf, pay for goods and services. Expenditures on services increased 4.1% at an annual rate, while goods spending decreased 4.4% at an annual rate, led by food and beverages (-11.7%). Imports, which are a subtraction in the calculation of GDP, increased due to an increase in services (+21.2%).Ĭonsumer spending rose at an annual rate of 1.0% in the second quarter, compared to a 1.8% increase in the first quarter. Meanwhile, federal government spending decreased 3.2% in the second quarter, reflecting a decrease in nondefense spending on consumption expenditures, while state and local government spending declined 1.2%, led by a decrease in investment in structures. Within residential fixed investment, single-family structures declined 4.2% at an annual rate, multifamily structures declined 5.6% and other structures (specifically brokers’ commissions) decreased 22.2%. The decrease in nonresidential fixed investment reflected decreases in structures and equipment, which were mostly offset by an increase in intellectual property products (+9.2%). In the subsequent 3 years consumption grew at an average rate of 4.5 in Arkansas compared to 4.2 for the U.S. average during 2008 the first year of the recession but did not contract as sharply as U.S. In the second quarter, private inventory investment declined by $107 billion, subtracting 2.0 percentage points from GDP growth.īoth nonresidential fixed investment (-0.1%) and residential fixed investment (RFI) (-14.0%) dropped in the second quarter. The data show that consumption spending in Arkansas slowed slightly more than the U.S. This quarter’s decrease reflected decreases in private inventory investment, residential fixed investment, federal government spending, and state and local government spending, partially offset by increases in exports and personal consumption expenditures (PCE). It is the second consecutive quarter of negative growth. Nonetheless, during the second quarter of 2022 the housing component of GDP exerted the largest drag on headline GDP growth, excepting the second quarter of 2020, since the third quarter of 2010.Īccording to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) decreased at an annual rate of 0.9% in the second quarter, following a 1.6% decrease in the first quarter of 2022. Such a call if often made quarters after the recession has begun. The NBER definition of a recession requires a broad range of economic variables to show declines, including economic growth and labor market conditions. However, while an “official” recession will be called by the NBER, a housing downturn is clearly underway. Despite these negative elements, the job market remained solid amid inflation concerns and growing recession fears.
![personal consumption expenditures personal consumption expenditures](https://files.taxfoundation.org/20170109185155/100-Map-metro.png)
Real GDP fell for the second straight quarter, while the Fed raised interest rates by 75 basis points for the second consecutive month to reduce inflation pressure. economy definitively slowed in the first half of 2022 as the Federal Reserve tightened financial conditions. The Second Quarter of Negative Growth: A Recession?