Annual National Accounts Update May Add Downside Risks To PCE Inflation

The BEA's 2026 annual update to national accounts introduces methodological changes to PCE price measurement, most notably for software, which may create downward pressure on core inflation.

Key Takeaways

• 1.BEA's forthcoming annual update to national accounts, effective September 30, includes methodology changes that may lower core PCE y/y inflation by up to 20bp.
• 2.Software inflation measurement is shifting to a CPI-PPI composite, introducing downside risk, while legal services changes offer a modest upside offset.

Table of Contents

• Key Takeaways
• The most consequential change relates to computer software and accessories.
• The second change relates to legal services.
• The final change relates to portfolio management and investment advice services.
• Disclosure Section

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