Two official measures can describe the same month’s inflation and still produce different numbers. In September 2026, the Consumer Price Index rose 3.7 percent over 12 months, while the Personal Consumption Expenditures price index rose 3.6 percent. Those figures are close, but they are not competing estimates built from identical ingredients. CPI follows a representative basket of purchases by urban consumers; PCE covers a broader range of expenses and reflects shifts in what people buy. The difference begins with those design choices. Bureau of Labor Statistics Bureau of Economic Analysis
Different baskets, different scope
The CPI is designed to measure average price change for goods and services purchased for consumption by its reference populations. The widely reported CPI-U represents urban consumers and covers categories ranging from food and housing to transportation and medical care. It includes sales and excise taxes directly tied to purchases, while excluding income and Social Security taxes and investment items such as stocks and bonds. Bureau of Labor Statistics
PCE also measures prices of goods and services consumed in the United States, but its scope includes purchases made on consumers’ behalf as well as purchases people make directly. That broader reach matters for expenses such as health care, where a household may use services paid for by an employer or government program. BEA describes PCE as capturing a wide range of consumer expenses. The two indexes therefore do not attach the same importance to every item, even when they cover some of the same prices. Bureau of Economic Analysis
A switch at the checkout
Consider a clearly hypothetical household that usually buys one brand of cereal but switches to a less expensive option after its price rises relative to alternatives. A measure that holds a basket of purchases more fixed will continue to reflect the price movement of the original choice more directly. An index that accounts for changing behavior can reflect that the household substituted another item. This is a simplified illustration of why methods for handling substitution can affect measured inflation; it does not describe a particular family or reproduce either index’s full calculation.
CPI is not wholly blind to substitution. BLS says its geometric-mean formula allows modest substitution within most basic item categories as relative prices change. The chained CPI goes further by allowing substitution across item categories, though it is initially published in preliminary form and later revised. PCE is known for reflecting changes in consumer behavior. These distinctions help explain why the indexes can diverge, but no single methodological feature alone predicts which one will be higher in a given month. Bureau of Labor Statistics Bureau of Economic Analysis
Why September’s readings were close
The September releases show the practical comparison. CPI-U increased 0.6 percent on a seasonally adjusted monthly basis and 3.7 percent over 12 months. BEA reported that PCE prices increased 0.5 percent from August and 3.6 percent from a year earlier. These are each headline, all-items measures, but the monthly CPI figure is seasonally adjusted while the annual change is not; the figures describe different comparison periods. Bureau of Labor Statistics Bureau of Economic Analysis
The indexes also divide particular expenses differently and weight them according to their own frameworks. In September, gasoline’s 9.1 percent rise accounted for over half of CPI’s monthly increase, while the food index was unchanged. PCE’s monthly report likewise showed a 0.5 percent increase overall, with a 0.3 percent increase excluding food and energy. The shared movement in some prices does not make the two measures interchangeable; their coverage and weights shape the final averages. Bureau of Labor Statistics Bureau of Economic Analysis
What the number can tell a household
Neither national index is a personal cost-of-living calculator. BLS notes that CPI represents an average experience: someone who spends an unusually large share on medical care, or heats a home differently from the typical basket, can face price changes unlike the reported average. A household’s own mix of rent, fuel, food, insurance and services influences what inflation feels like, and that mix may change over time. Bureau of Labor Statistics
For readers comparing headlines, the useful habit is to check which index is being reported, whether the change is monthly or annual, and whether it is seasonally adjusted. CPI’s September 3.7 percent and PCE’s 3.6 percent are both year-over-year readings, but they remain distinct measures. A small gap is not evidence that one is mistaken, nor does either figure establish how much a particular family’s expenses rose. Each answers a related but differently framed question about prices across the economy. Bureau of Labor Statistics Bureau of Economic Analysis
Sources & further reading
- Consumer Price Index questions and answers ↗Bureau of Labor Statistics
- Personal consumption expenditures price index ↗Bureau of Economic Analysis
- September 2026 Consumer Price Index ↗Bureau of Labor Statistics
- September 2026 personal income and outlays ↗Bureau of Economic Analysis
