What is the “market-based” PCE price index?
In addition to the price indexes for personal consumption expenditures (PCE) and for “core” PCE, which excludes the volatile components of food and energy, BEA prepares supplemental PCE price indexes that are based primarily on observed market transactions for which there are corresponding price measures. Specifically, these “market-based” price indexes are composed of PCE components that are deflated by either a detailed consumer price index (CPI) or a producer price index (PPI). Two supplemental price indexes are prepared: An overall market-based PCE measure and a core market-based PCE measure that excludes food and energy. These indexes are shown in the GDP and personal income news releases, in NIPA tables 2.3.4, 2.3.7, 2.8.4, and 2.8.7, and as addenda items in the underlying detail PCE tables on BEA’s Web site. The PCE market-based price index excludes most imputed expenditures, such as “financial services furnished without payment,” for which deflators are implicit, based on indep
