<p>Personal consumption expenditure (PCE) is the primary measure of <strong>consumer spending</strong> on goods and services in the U.S. economy.   It accounts for about two-thirds of domestic final spending, and thus <strong>it is the <em>primary engine</em> that drives future economic growth</strong>.  PCE shows how much of the income earned by households is being spent on current consumption as opposed to how much is being saved for future consumption.
<a href="https://www.bea.gov/resources/methodologies/nipa-handbook/pdf/chapter-05.pdf" rel="nofollow noreferrer">https://www.bea.gov/resources/methodologies/nipa-handbook/pdf/chapter-05.pdf</a></p>
<p>The PCE price index is a measure of the prices that people living in the United States pay for goods and services. The PCE price index is known for capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior.</p>
<p><a href="https://www.bea.gov/data/personal-consumption-expenditures-price-index#:%7E:text=A%20measure%20of%20the%20prices,reflecting%20changes%20in%20consumer%20behavior." rel="nofollow noreferrer">https://www.bea.gov/data/personal-consumption-expenditures-price-index#:~:text=A%20measure%20of%20the%20prices,reflecting%20changes%20in%20consumer%20behavior.</a></p>
<p>Most PCE price indexes are derived by extrapolating consumer and producer price indexes from the U.S. Bureau of Labor Statistics.</p>
<p><strong>The PCE quantity index</strong> derived by deflating current-dollar estimates at the most detailed category level by appropriate PCE price indexes with the reference year equal to 100.</p>
<p>Prices and quantities are prepared at a detailed level and are aggregated based on a Fisher chain-weighted formula  <a href="https://www.bea.gov/sites/default/files/methodologies/nipa-handbook-all-chapters.pdf#page=64" rel="nofollow noreferrer">https://www.bea.gov/sites/default/files/methodologies/nipa-handbook-all-chapters.pdf#page=64</a></p>
<p>This source can provide some answers: <a href="https://www.bea.gov/help/faq/521" rel="nofollow noreferrer">https://www.bea.gov/help/faq/521</a></p>
<p>The difference <strong>between PCE quantity and industrial production</strong> is that PCE come from consumer spending.   Industrial production measures the output of the industrial sector, which typically comprises mining, manufacturing, utilities and, in some cases, construction.</p>
<p><strong>The difference between PCE quantity index and real output</strong> is that PCE come from consumer spending while Real output comes from spending from consumers, business/industries, and government/government enterprises.</p>

CC BY-SA 4.0
2021-03-29T19:54:38.857Z
2021-03-29T19:54:38.857Z
Mike J
<p>What is the difference between these two things? How is PCE price different from PCE quantity? Also, I am confused about the difference between PCE quantity and measure of real output. For example, what is the difference between PCE quantity and Industrial Production? </p>

<macroeconomics><industrial-organisation><definition><input-output>
What is the difference between personal consumption expenditure price and PCE quantity?
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# What is the difference between personal consumption expenditure price and PCE quantity?

(Asked by: username_0 on 2019-01-30)

What is the difference between these two things? How is PCE price different from PCE quantity? Also, I am confused about the difference between PCE quantity and measure of real output. For example, what is the difference between PCE quantity and Industrial Production?

**Tags:** macroeconomics, industrial-organisation, definition, input-output

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## 1 answers

### Answer by username_1 on 2021-03-29. Score: 4

Personal consumption expenditure (PCE) is the primary measure of **consumer spending** on goods and services in the U.S. economy. It accounts for about two-thirds of domestic final spending, and thus **it is the *primary engine* that drives future economic growth**. PCE shows how much of the income earned by households is being spent on current consumption as opposed to how much is being saved for future consumption.
<https://www.bea.gov/resources/methodologies/nipa-handbook/pdf/chapter-05.pdf>

The PCE price index is a measure of the prices that people living in the United States pay for goods and services. The PCE price index is known for capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior.

[https://www.bea.gov/data/personal-consumption-expenditures-price-index#:~:text=A%20measure%20of%20the%20prices,reflecting%20changes%20in%20consumer%20behavior.](https://www.bea.gov/data/personal-consumption-expenditures-price-index#:%7E:text=A%20measure%20of%20the%20prices,reflecting%20changes%20in%20consumer%20behavior.)

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

**The PCE quantity index** derived by deflating current-dollar estimates at the most detailed category level by appropriate PCE price indexes with the reference year equal to 100.

Prices and quantities are prepared at a detailed level and are aggregated based on a Fisher chain-weighted formula <https://www.bea.gov/sites/default/files/methodologies/nipa-handbook-all-chapters.pdf#page=64>

This source can provide some answers: <https://www.bea.gov/help/faq/521>

The difference **between PCE quantity and industrial production** is that PCE come from consumer spending. Industrial production measures the output of the industrial sector, which typically comprises mining, manufacturing, utilities and, in some cases, construction.

**The difference between PCE quantity index and real output** is that PCE come from consumer spending while Real output comes from spending from consumers, business/industries, and government/government enterprises.


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