Inflation
Inflation has a large impact on the overall economy and monetary policy decisions. Loosely defined, inflation is the rise in prices over a period of time. Policymakers use inflationary metrics to set goals and measure progress towards reaching price stability. Higher inflationary environments can be attributed to rises in interest rates.
Consumer Price Index (CPI)
CPI is an inflationary gauge, measuring the monthly change in consumer prices on a weighted basket of goods.
This metric is the most widely followed and market moving inflationary reading in the US economy.
When and where?
Monthly report, issued by the US Bureau of Labor Statistics
Released roughly 2 weeks after month's end. Refers to most recent month's data.
Producer Price Index (PPI)
PPI is a leading measure of inflation, focused on the monthly change in producer's (manufacturer) sale prices on a weighted basket of goods.
This data is a leading metric as it covers changes in US prices directly from suppliers, rather than what consumers pay.
When and where?
Monthly report, issued by the US Bureau of Labor Statistics
Released about 2 weeks after month's end. References the most recent month's data.
Personal Consumption Expenditures (PCE)
PCE is an inflationary measure, tracking the monthly change in prices that US consumers spend on goods and services.
The Federal Reserve favors PCE (since 2000) as their main measure of inflation, and sets targets based on PCE readings.
PCE is a more flexible measure of US inflation (compared to CPI). The Fed's reasoning is as follows : "The expenditure weights in the PCE can change as people substitute away from some goods and services toward others, the PCE includes more comprehensive coverage of goods and services, and historical PCE data can be revised (more than for seasonal factors only)."
When and where?
Monthly report, issued by the Bureau of Economic Analysis
Released during the last week of the month. References the prior month's data.