U.S. BEA to Revise Inflation Data Methodology, Potentially Lowering PCE Rate

The U.S. Bureau of Economic Analysis (BEA) announced plans to change the methodology used to calculate the Personal Consumption Expenditures (PCE) price index, the inflation measure that the Federal Reserve monitors. The adjustments will shift how data on legal services, portfolio management fees, investment advice, and computer software are weighted, which could shave 10–20 basis points from the headline and core PCE rates, dropping the May core figure from 3.4% to roughly 3.2%.

Critics argue the changes amount to data manipulation, especially as they come under the Trump administration, which has previously fired the head of the Bureau of Labor Statistics and pushed for lower interest rates. Fed Chair Kevin Warsh, appointed by Trump, has formed task forces to reassess the Fed’s operations amid the revised inflation numbers.