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The federal government's inflation measures can feel ... wrong. How accurate are they?

Apr 30, 2024
CPI and PCE can both seem to be out of step with consumers' experience.
The CPI and PCE each have their own basket of goods and services they keep an eye on to determine how inflation is doing.
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Americans are saving less. That might actually be a sign of economic strength.

Apr 26, 2024
If interest rates fall, expect savings rates to do the same.
A lot of people might still be holding on to some of the money they tucked away earlier in the pandemic, says Tim Quinlan, senior economist at Wells Fargo.
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What do falling inflation and rising incomes mean for consumer spending?

Feb 29, 2024
The January PCE report showed inflation easing further but still significant. Moderation in spending could also continue, analysts say.
Wage growth was resilient in January, but Social Security and other factors added to income gains.
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Want to know where inflation's headed? Look to the producer price index

Feb 20, 2024
It's usually called a measure of wholesale prices, but it can also be a leading indicator that shows where consumer prices are headed.
The cost of hospital outpatient care was up more than 2% last month. Health care costs are included in both the PPI and PCE.
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Restaurants outpacing grocery stores when it comes to inflation

Dec 25, 2023
Supermarkets and restaurants business relies on selling food. So why are prices rising more in the latter?
On average, labor costs eat up about 30% of a restaurant’s gross revenue.
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Health care costs were a main driver of inflation in September

Oct 27, 2023
Rising costs for prescriptions and hospital services were felt in latest PCE report, though health inflation has been mild in the past year.
By the end of the decade, health care is expected to account for about a fifth of the U.S. economy.
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What’s the difference between CPI and PCE?

Oct 27, 2023
The consumer price index and the personal consumption expenditures price index measure the changing cost of different baskets of goods.
Housing is a bigger part of the CPI than the PCE, and the increase in housing costs has pushed the CPI higher.
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Why services inflation is stickier than goods inflation

Oct 27, 2023
Goods inflation has slowed down a lot over the last year, thanks in part to higher interest rates. But the Federal Reserve is having a harder time slowing services inflation.
Services inflation has stayed high because those prices, like for a haircut, are heavily influenced by wages.
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Wage increases haven't really boosted inflation, new Fed research says

May 31, 2023
Businesses have been finding ways to absorb wage increases without charging customers more.
Rising wages are only responsible for about a tenth of a percentage point of the increase in PCE, research from the San Francisco Fed says.
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In the midst of inflation, companies continue to hike prices — and reap major profits

Apr 27, 2023
So far, price increases have not driven customers away. But there’s evidence that is starting to change.
While consumers are frustrated about continued price hikes, they still seem willing to spend.
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