October 2019 issue contents
Revisions to PCE Inflation Measures: Implications for Monetary Policy

Dean Croushore
University of Richmond, Federal Reserve Bank of Philadelphia (Visiting Scholar)


This paper examines the characteristics of the revisions to the inflation rate as measured by the personal consumption expenditures price index both including and excluding food and energy prices. These data series play a major role in the Federal Reserve's analysis of inflation. We examine the magnitude and patterns of revisions to both PCE inflation rates. We can forecast data revisions in real time from the initial release to the annual revision released in the following year. Policymakers should account for this predictability in setting monetary policy.

JEL Code: E01, E52, E37.

Full article (PDF, 25 pages, 967 kb)