The BEA Is Reformulating Its Key Inflation Gauge
According to A Statistical Revamp Is About To Lower Inflation by The Wall Street Journal, the Bureau of Economic Analysis (BEA) is reformulating its Core PCE calculation. The markets seem to focus on CPI as its inflation gauge, while the Fed often touts PCE as its key inflation indicator. Economists expect the BEA's changes will lower the Core PCE by roughly two-tenths of a percentage point when the changes take effect with the August data reported in September. The changes target three PCE sub-categories: Software: the BEA currently borrows a BLS index that includes items like flash drives…
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