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NOTES

Source: Federal Reserve Bank of St. Louis  

Release: Money Velocity

Units:  Ratio, Seasonally Adjusted

Frequency:  Quarterly

Notes:

This series has been discontinued and will no longer be updated. The institutional money market funds component (IMFSL) used to calculate MZM has been discontinued by the Board of Governors and is no longer available in the H.6 statistical release, Money Stock Measures. For further information about the changes to the H.6 statistical release, please see the announcements provided by the source.

Calculated as the ratio of quarterly nominal GDP (GDP) to the quarterly average of MZM money stock (MZMSL).

The velocity of money is the frequency at which one unit of currency is used to purchase domestically- produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy.
The frequency of currency exchange can be used to determine the velocity of a given component of the money supply, providing some insight into whether consumers and businesses are saving or spending their money. There are several components of the money supply,: M1, M2, and MZM (M3 is no longer tracked by the Federal Reserve); these components are arranged on a spectrum of narrowest to broadest. Consider M1, the narrowest component. M1 is the money supply of currency in circulation (notes and coins, traveler’s checks [non-bank issuers], demand deposits, and checkable deposits). A decreasing velocity of M1 might indicate fewer short- term consumption transactions are taking place. We can think of shorter- term transactions as consumption we might make on an everyday basis.

The broader M2 component includes M1 in addition to saving deposits, certificates of deposit (less than $100,000), and money market deposits for individuals. Comparing the velocities of M1 and M2 provides some insight into how quickly the economy is spending and how quickly it is saving.

MZM (money with zero maturity) is the broadest component and consists of the supply of financial assets redeemable at par on demand: notes and coins in circulation, traveler’s checks (non-bank issuers), demand deposits, other checkable deposits, savings deposits, and all money market funds. The velocity of MZM helps determine how often financial assets are switching hands within the economy.

Suggested Citation:

Federal Reserve Bank of St. Louis, Velocity of MZM Money Stock (DISCONTINUED) [MZMV], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MZMV, March 19, 2024.

Source: U.S. Bureau of Economic Analysis  

Release: Personal Income and Outlays  

Units:  Index 2017=100, Seasonally Adjusted

Frequency:  Monthly

Notes:

BEA Account Code: DPCCRG

The Personal Consumption Expenditures Price Index is a measure of the prices that people living in the United States, or those buying on their behalf, pay for goods and services. The change in the PCE price index is known for capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior. For example, if car prices rise, car sales may decline while bicycle sales increase.

The PCE Price Index is produced by the Bureau of Economic Analysis (BEA), which revises previously published PCE data to reflect updated information or new methodology, providing consistency across decades of data that's valuable for researchers. They also offer the series as a Chain-Type index and excluding food and energy products, as above. The PCE price index less food excluding food and energy is used primarily for macroeconomic analysis and forecasting future values of the PCE price index.

The PCE Price Index is similar to the Bureau of Labor Statistics' consumer price index for urban consumers. The two indexes, which have their own purposes and uses, are constructed differently, resulting in different inflation rates.

For more information on the PCE price index, see:
U.S. Bureau of Economic Analysis, Guide to the National Income and Product Accounts of the United States (NIPA)
U.S. Bureau of Economic Analysis, Personal Consumption Expenditures Price Index
U.S. Bureau of Economic Analysis, Prices & Inflation
U.S. Bureau of Labor Statistics, Differences between the Consumer Price Index and the Personal Consumption Expenditure Price Index

Suggested Citation:

U.S. Bureau of Economic Analysis, Personal Consumption Expenditures Excluding Food and Energy (Chain-Type Price Index) [PCEPILFE], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/PCEPILFE, March 19, 2024.

Source: U.S. Bureau of Labor Statistics  

Release: Consumer Price Index  

Units:  Index 1982-1984=100, Seasonally Adjusted

Frequency:  Monthly

Notes:

The "Consumer Price Index for All Urban Consumers: All Items Less Food & Energy" is an aggregate of prices paid by urban consumers for a typical basket of goods, excluding food and energy. This measurement, known as "Core CPI," is widely used by economists because food and energy have very volatile prices. The Bureau of Labor Statistics defines and measures the official CPI, and more information can be found in the FAQ or in this article.

Suggested Citation:

U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: All Items Less Food and Energy in U.S. City Average [CPILFESL], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CPILFESL, March 19, 2024.

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Personal Consumption Expenditures Excluding Food and Energy (Chain-Type Price Index)

Percent Change from Quarter One Year Ago, Quarterly, Seasonally Adjusted

Consumer Price Index for All Urban Consumers: All Items Less Food and Energy in U.S. City Average

Monthly, Not Seasonally Adjusted Semiannual, Not Seasonally Adjusted

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