Biden Cites Obscure Inflation Metric That Shows Prices Rising at Pre-Pandemic Levels

Biden claimed inflation has been at 2% over the last 6 months, pre-pandemic levels. This is true using one specific inflation measure - the 6-month annualized PCE rate - but not the more commonly cited CPI or yearly PCE measures.

There are two main ways to measure inflation the Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE) index. CPI is more commonly cited in news reports.

Over the last 6 months, inflation has ranged from 2.6% to 3% using the yearly CPI and PCE measures. The Fed aims for 2% inflation before lowering interest rates.

The White House used the 6-month annualized PCE rate, which shows inflation at 2% over the last 6 months. Economists said this is a valid metric but risks confusing the public.

Fact checking groups said using the obscure PCE metric without explaining risks misleading the public who are more familiar with the commonly reported CPI inflation measures.