Money For the Rest of Us · Wednesday, July 15, 2026
The Bureau of Economic Analysis (BEA) is revamping its Personal Consumption Expenditure (PCE) index methodology, with changes announced in June 2026. One significant alteration involves how portfolio management services are measured, shifting from asset manager revenue to a quantity extrapolator. This follows criticism from Federal Reserve Governor Stephen Muran in December 2025 regarding the previous method's tendency to inflate PCE figures when the stock market rose.
“Now, I hadn't heard of the change. Apparently, it was announced last month in June 2026, just a couple of paragraphs. And they talk about improvements to the Personal Consumption Expenditure index, the PCE.”
“They talked about changing how they measured portfolio management services. If you pay an asset manager, they, they typically have used revenue of asset managers. So, if you're paying 1% of your, your portfolio value to an asset manager, a financial advisor, then if the stock market goes up, you're paying them more money. They're not providing more services, it's a price increase, because your assets went up.”
“Back in December, Federal Reserve Governor Stephen Muran, appointed by President Trump, used to be Trump's economic advisor. He pointed out what he didn't like about how portfolio management services were incorporated into the Personal Consumption Expenditure because it had added almost 0.2%, a little bit more to the PCE because the stock market had gone up over that year.”
“It says that the BEA will improve the deflation methodology for consumer spending on portfolio management and investment advice services to better reflect the timing and quantity of services consumed.”