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Personal Consumption Expenditures

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Personal consumption expenditures, also known as PCE, are all funds spent on goods and services intended for individual consumption or use. Personal consumption expenditures include such items as food, beverages, clothing, and utilities. Personal consumption expenditures are used as the basis for the personal consumption expenditures price index, which is a general consumer inflation index. The personal consumption expenditures price index is similar to the consumer price index. The personal consumption expenditures price index takes into account actual prices paid by households for durable goods as well as non-durables and services. Even though the personal consumption expenditures price index makes constant adjustments for changing consumer spending habits, its conclusions are considered somewhat predictable and therefore has little impact on the markets.



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