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 sharply, it can mean inflation is heating up; when it drops, it might signal a slowdown ahead. For example, if PCE jumps 5% year-over-year, the Fed might tighten monetary policy (make borrowing more expensive), which could affect stock valuations. Think of it as the economy's pulse—investors watch it closely to anticipate market moves.