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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.
Joseph Prezioso/AFP via Getty Images

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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For public good, not for profit.

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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What the Federal Reserve's favorite inflation measure can tell us

Jan 25, 2023
The personal consumption expenditures price index, better known as the PCE, tracks what we paid for goods and services in the previous month.
The PCE give less weight to consumer staples like gasoline than the consumer price index does.
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What if we told you inflation was back to its target rate?

Jan 17, 2023
When we focus on recent months rather than year-on-year increases, inflation numbers look pretty good, says economist Alan Blinder.
Fed Chair Jerome Powell, above, isn't ready to declare victory over inflation yet, says economist Alan Blinder.
Photo by Samuel Corum/Getty Images