The same two categories, weighted three times differently
Source. Johnson, “A comparison of PCE and CPI: Methodological differences in U.S. inflation calculation and their implications,” BLS working paper, November 2017, Table 6. Weights for 2014–2016.
Method and data
Method. Expenditure weights, percent of index. The gap is not an error in either index. CPI weights come from what households report spending; PCE weights come from business and administrative data and count spending made on behalf of households — employer-paid premiums, Medicare, Medicaid. That single difference is why medical care carries roughly three times the weight in the index the Federal Reserve targets.
| Category | Weight in CPI, % | Weight in PCE, % |
|---|---|---|
| Housing | 40.87 | 25.08 |
| Medical care | 8.37 | 25.93 |
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Higgins Strategy. “The same two categories, weighted three times differently” Exhibit 4, Which Inflation? (Study I). October 12, 2026. https://higginsstrategy.com/charts/e1-4-weights/