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A discussion has arisen regarding the classification of market-based core non-housing PCE services in U.S. economic data.
Mike Konczal questions whether deleting market-based PCE household utilities, such as water, is an appropriate way to strip out market-based energy services from the metric. The commentary highlights how adjustments to key economic indicators can impact their interpretation, especially when assessing recent shifts that were previously favorable for Donald Trump.
As debates over the appropriate composition of core non-housing PCE services continue to shape interpretations of economic data, these discussions build upon prior analyses tracing how federal agencies determine their preferred metrics. The deeper significance of distinguishing between PCE and CPI measures was previously examined in the context of the Federal Reserve’s strategic shift to the PCE measure for key economic reporting beginning in 2000, as explored in Mike Konczal: Fed shifts focus to PCE measure over CPI in 2000.