The Bureau of Economic Analysis (BEA) calculates price indexes that help all of us better understand changes in underlying economic activity, including inflation.

One of the BEA’s headline inflation indicators, the personal consumption expenditures price index (PCEPI), is used by the Federal Reserve to adjust monetary policy to promote maximum employment and stable prices. The BEA reports different price indexes for the final goods and services available in the U.S., and the FRED graph above shows their quarterly percent change from a year ago side by side.

• • Orange bars show the personal consumption expenditures price index, which measures prices for both domestic and imported goods and services bought by consumers.
  • Light blue bars show the gross domestic purchases price index, which measures prices for both domestically produced and imported goods and services bought by consumers, businesses, and governments.
  • Dark blue bars show the gross domestic product price index, which measures prices for domestically produced goods and services bought by consumers, businesses, governments, and the rest of the world.

Differences in the scope of these price indicators explain the differences in their year-over-year inflation rates.

This FRED Blog post is an adaptation of The BEA Wire’s “A Historical Look at BEA’s Price Measures.”

How this graph was created: Search FRED for “Personal Consumption Expenditures: Chain-type Price Index.” Next, click on the “Edit Graph” button and select the “Add Line” tab. Search for “Gross domestic purchases (chain-type price index)” and click on “Add data series.” Repeat the last step to add “Gross Domestic Product: Chain-type Price Index” to the graph. Next, select the “Edit Lines” tab to change the units to “Percent Change from Year Ago” and click on “Copy to all.” Last, use the “Format” tab to select “Graph type: Bar.”

Suggested by Diego Mendez-Carbajo.