Frequently Asked Questions

Guidelines for Citing BEA Information | ID: 521 | Created: Aug-19-2009
Answer

How are personal consumption expenditures (PCE) prices and quantities derived?

Table 2.4.4 U-D 'Price Indexes for PCE: Source Data' (XLS • 83 KB) presents the underlying PCE components and the corresponding source data used to derive the price indexes. This table reflects the new PCE classification system that became effective with the release of the 2009 comprehensive revision of the national income and product accounts.

Estimates of PCE prices and quantities are prepared at a detailed level and are aggregated based on a Fisher chain-weighted formula (for more information on chain-weighted indexes, see chapter four of Concepts and Methods of the U.S. National Income and Product Accounts (PDF • 1,233 KB).

Most PCE price indexes are derived by extrapolating consumer and producer price indexes from the U.S. Bureau of Labor Statistics.

Most chained-dollar PCE estimates are derived by deflating current-dollar estimates at the most detailed category level by appropriate PCE price indexes with the reference year equal to 100. (Effective with the 2009 comprehensive revision, the reference year becomes 2005.)

Two other methods for estimating chained-dollar PCE include quantity extrapolation and direct valuation; both methods use quantity indicators. For quantity extrapolation, chained-dollar estimates are obtained by extrapolating the reference year current-dollar estimates in both directions by quantity indicators. For direct valuation, the chained-dollar estimates are obtained by multiplying reference-year prices by actual quantity data for each period. These methods are described in more detail in the “Updated Summary of NIPA Methodologies” (PDF • 265 KB) article from the November 2008 Survey of Current Business.

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