You got your lagging economic indicators, and then you got your lagging economic indicators.

From American public media, this is Marketplace.

In Los Angeles, I'm Kyle Rizdahl. It is Thursday, today 22 January. Good as always to have you along, everybody.

The macroeconomic news, oh, the day is brought to us today by the letters P, C, and E, the personal consumption, expenditures price index. It is for November, mind you. So a bit delayed. Thanks. Shutdown. Came in this morning at 2.8%. That is hired by just a

touch from October. I'm Nina I Hacker, and I am an associate professor of economics at the University

of Rhode Island. I'm Laura Veldkamp, and I'm the Cooperman Professor of Economics and Finance

at Columbia Business School. You can also just shorten that to Columbia Business School

Professor, or Columbia Professor. Noted. Services, shelter, and food are still really expensive expensive and they're not slowing.

We also have had consistently strong demand in the past few months, you know, surprisingly

strong, given everything that happened in the preceding year economically.

Now, caveat and bicture, because again, November.

It's not really a snapshot of what prices are doing today. It's a snapshot of what prices

were doing, you know, in October and November when, you know, when much of this data was

collected. The changes are probably bigger than they look. If these are part of a trend,

and that trend was persisting from November to December. PCE matters to all of us, of course,

because PCE matters to the Federal Reserve. Measure is a little bit broader than some of the other

measures of prices that sample a narrower

set of goods. While the CPI might include things that are really important, it might not include

everything that a household necessarily cares about. The flexibility of the PCE lets economists reflect

changes in preferences.

Preferences like buying chicken instead of beef because beef is so expensive right now.

The substitution effect is what economists call that.

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