PCE (Personal Consumption Expenditures)

PCE measures the total amount of money Americans spend on goods and services each month. It's one of the most important signals of economic health because consumer spending drives about 70% of U.S. economic growth. You'll hear the Federal Reserve and economists obsess over PCE data because it helps them decide whether to raise or lower interest rates. When PCE rises faster than expected, it can signal inflation (prices going up), which might prompt the Fed to tighten monetary policy. For example, if PCE jumps 0.8% in a single month when economists predicted 0.3%, markets might react nervously because it suggests the economy is overheating. Investors watch PCE releases closely since they influence stock and bond prices.