BEA to Reformulate Core PCE Inflation Gauge, Expected to Lower Readings

The U.S. Bureau of Economic Analysis (BEA) is in the process of reformulating its calculation for the Core Personal Consumption Expenditures (PCE) price index, a key inflation gauge closely watched by the Federal Reserve. Economists anticipate these changes will result in a reduction of the Core PCE by approximately two-tenths of a percentage point when the revised data for August is reported in September. The adjustments will specifically target sub-categories such as software and investment management fees.