Source: FRED: PCEPILFE (Bureau of Economic Analysis)
Data through: August 2026 · updated Sep 30 · Updates: Monthly · Next: Oct 29
MThe three bars show the last 3 months for this indicator, oldest left to newest right. Bar height reflects each reading relative to the other two — the tallest is the highest of the three, the shortest the lowest.
Historical context: Currently in the 58th percentile of all historical readings.
What this means right now: Core PCE is meaningfully above target — between 2.5% and 4%, as in about 1 month in 5 since 1960 (167 of 800). A year later the Fed's rate was higher about as often as it was lower (76 against 77): the direction has followed where inflation was heading, not the level alone.
REVISION PROFILECore PCE prices (the month's change in prices, in per cent): how the first estimate compared with the value three years later. The economy is in an Expansion now (September 2026). Of the 206 times it was first reported during an Expansion, the middle move was +0.02, with half landing between −0.02 and +0.06. It was revised up 80% of the time — 65 of the 81 that moved at all. Across the whole record since 2000, of the 276 first estimates, 90 were later revised up, 25 down and 161 not at all; the middle move was +0.02. Revisions Ledger →
Core PCE Inflation · Monthly · 1959–2026
NBER recessions
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Monthly values
Core PCE Inflation — the last 12 months
Every month's reading, with the band the heatmap gives it. The chart above shows the same series in full.
Month
Value
Band
Aug 2026
+3.0% YoY
Concerning reading
Jul 2026
+3.0% YoY
Concerning reading
Jun 2026
+3.0% YoY
Concerning reading
May 2026
+3.2% YoY
Concerning reading
Apr 2026
+3.1% YoY
Concerning reading
Mar 2026
+3.1% YoY
Concerning reading
Month-end readings of the same series the chart shows, from core_pce_yoy_12m. Values are the current record, not point-in-time: a month that has since been revised shows its revised value.
What is the Core PCE?
Core PCE (Personal Consumption Expenditures excluding food and energy) is the Federal Reserve's preferred inflation gauge. Unlike CPI, PCE uses a chain-weighted formula that accounts for consumer substitution — if beef gets expensive, consumers buy more chicken, and PCE captures this shift. Core excludes food and energy to focus on underlying inflation trends.
The Fed's 2% inflation target is set in terms of PCE, not CPI: when the Fed says inflation is above or below target, this is the number it means. Core PCE runs a little below core CPI — by 0.2–0.5 points on average in each decade since 2000, and nearer 0.8 in the 1980s and 1990s.
Limitations: Core PCE excludes food and energy — which matter enormously to household budgets. It is released with a one-month lag. The chain-weighting methodology, while more accurate, can be difficult to interpret intuitively compared to CPI.
How We Color-Code the Core PCE
Our heatmap colors this indicator against historically significant thresholds:
Below 1.0%
Deflation risk — below 1%, seen in only 11 months since 1960: nine in 2009, and one month each in 1998 and 2020
1.0% – 1.5%
Below target — 1% to 1.5%, about 1 month in 6 since 1960 (132 of 800): the 1960s, the late 1990s and the 2010s
1.5% – 2.5%
Near the Fed's 2% target — 1.5% to 2.5%, the most common band, about 1 month in 3 since 1960 (260 of 800)
2.5% – 4.0%
Above target — 2.5% to 4%, about 1 month in 5 since 1960 (167 of 800); a year later the Fed's rate was higher about as often as lower
Above 4.0%
Hot inflation — above 4%, about 2 months in 7 since 1960 (230 of 800): 1968–71, 1973–85, 1988–91 and 2021–23
Historical Extremes — What Happened Next?
When this indicator reaches extreme levels, history shows consistent patterns:
Sep 2022Post-pandemic inflation peak
+5.6% YoY
The highest core PCE since February 1983, as supply chains, stimulus-fed demand and a tight job market all pushed prices up. The Fed raised its rate from near zero to 5.3% within 18 months — its fastest rise since 1981.
Jul 2009Post-GFC deflationary trough
+0.6% YoY
Core PCE fell to near-deflationary levels as the financial crisis destroyed demand. The Fed kept rates near zero and launched QE1 to prevent deflation from taking hold. This period informed the Fed's commitment to keeping inflation near target — leading to the explicit 2% target adoption in 2012.
Feb 2021Pre-surge baseline
+1.6% YoY
Core PCE was below the Fed's 2% target heading into the post-pandemic reopening. Under the Average Inflation Targeting framework it adopted in 2020, the Fed was prepared to let inflation run above 2% for a time to make up for the undershoot.
Frequently Asked Questions
Why does the Fed use PCE instead of CPI?
PCE uses a chain-weighted formula that accounts for consumer substitution behavior — when one item gets expensive, consumers buy cheaper alternatives, and PCE captures this. CPI uses a fixed basket. PCE also has broader coverage of spending. The Fed believes PCE gives a more accurate picture of actual inflation experienced by consumers.
What is the difference between PCE and Core PCE?
PCE includes all personal consumption expenditures including food and energy. Core PCE strips out food and energy because they are highly volatile and subject to supply shocks outside the Fed's control. The Fed watches Core PCE to understand underlying inflation trends that reflect domestic demand and pricing power.
How does Core PCE compare to CPI?
On average, core PCE ran about 0.3 percentage points below core CPI in the 2000s and the 2010s. In the 1980s and 1990s the gap was nearer 0.8 points. In a single year it can vanish or even reverse, as in 2010, when core PCE ran above core CPI. The main differences are methodology (chain-weighted vs fixed basket), coverage (PCE includes employer-paid healthcare, CPI does not), and housing weight (CPI weights shelter more heavily). During the 2021–2023 inflation surge, both moved in the same direction but CPI peaked higher.
At what level of Core PCE has the Fed begun cutting rates?
The Fed has not waited for 2%. In the seven easing cycles since 1989, the first cut came with core PCE anywhere from 1.2% (1998) to 4.6% (1989), as it was published at the time. In 2024 the first cut came with core PCE near 3% and falling. The direction of inflation has mattered as much as its level.
When is Core PCE released?
Core PCE is released monthly by the Bureau of Economic Analysis, typically in the last week of the month covering the prior month's data — about 4 weeks after the reference period. For example, March Core PCE is released in late April. It comes out alongside Personal Income and Spending data in the BEA's Personal Income report.