In order to determine the trimmed mean PCE inflation rate for a particular month, it is necessary to consider price changes for all of the various elements of personal consumption expenses. A certain percentage of the most extreme observations at both extremes of the spectrum are eliminated or trimmed, and the individual price changes are then arranged in ascending order from "fell the most" to "rose the most."
 

The weighted average of the remaining components is then used to determine the inflation rate. The real core PCE inflation rate is represented by the trimmed mean inflation rate. It has been demonstrated that the resulting inflation measure performs better as an indicator of core inflation than the more traditional "excluding food and energy" measure.
 

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