The Bureau of Economic Analysis is set to revise the measurement of the price index for personal consumption expenditures, which is the Federal Reserve's preferred inflation metric. This change comes as inflation has accelerated, prompting some officials to suggest that higher interest rates may be necessary. The upcoming adjustments in how specific components are calculated are expected to lead to a downward revision in the reported inflation figures.

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https://www.wsj.com/economy/central-banking/pce-inflation-data-updates-ca7bfd61

A Statistical Revamp Is About to Lower Inflation, at a Critical Time

Bureau of Economic Analysis is altering how it measures several components of a price gauge watched by Fed

Matt Grossman

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A person pushes a shopping cart past shelves of groceries towards a "Fresh Meat" sign in a store. The Fed's preferred consumer-price metric is expected to get a downward revision when a revamped formula takes effect.Spencer Platt/Getty Images

An acceleration in the Federal Reserve’s preferred measure of inflation has some officials warning that higher interest rates might be in order.

A bit of relief, though, is on its way—not from prices themselves, but the way they are measured. The agency responsible for publishing the Fed’s preferred measure, the price index of personal-consumption expenditures, plans to revamp how it handles three components.

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A Statistical Revamp Is About to Lower Inflation, at a Critical Time

A Statistical Revamp Is About to Lower Inflation, at a Critical Time

Bureau of Economic Analysis is altering how it measures several components of a price gauge watched by Fed

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