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 mean inflation is heating up; when it's weak, it suggests the economy might be slowing down. For example, if PCE jumps 5% year-over-year, the Fed might get worried about inflation and consider raising rates, which typically pressures stock valuations.