The GDP deflator formula includes the value of all final ... is a more comprehensive inflation measure than the Consumer Price Index (CPI), which measures the price changes in a fixed basket ...

Because the PCE and CPI differ in their formula, weighting, scope and other effects, their results are different. The Federal Reserve prefers to use the PCE price index to measure inflation.

The consumer price index is a weighted average collection of the prices of common goods and services. Changes in the CPI over time are used to estimate the rate of inflation. The consumer price ...