EconoIndicators / Producer Price Index (PPI) -

Producer Price Index At a Glance

Finished Goods Index: Down 1.4%
Finished Goods Core: Up 0.2%
Finished Goods Annual Change: Up 2.2%
Finished Goods Energy: Down 6.6%
Finished Goods Food: Down 0.2%
Intermediate Goods Index: Down 1.2%
Crude Goods Index: Down 3.0%

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Producer Price Indexes - August 2007

The Producer Price Index for Finished Goods fell 1.4 percent in August, seasonally
adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today.
This decrease followed a 0.6-percent increase in July and a 0.2-percent decline in June. At
the earlier stages of processing, prices received by manufacturers of intermediate goods
moved down 1.2 percent in August compared with a 0.6-percent advance in July, and the
crude goods index dropped 3.0 percent after climbing 1.2 percent in the prior month. (See
table A.)

2006
Aug. 0.4 1.2 -0.5 0.4 3.8 0.4 2.6
Sept. -1.1 .4 -5.9 .3 .9 -1.3 -3.8
Oct. -1.5 -.4 -5.8 -.4 -1.2 -1.2 -9.2
Nov. 1.6 .1 5.4 .9 .9 .6 11.7
Dec. .7 1.1 2.4 .1 1.1 .9 2.6

2007
Jan. -.6 1.0 -4.3 .2 .1 -.7 -5.5
Feb. 1.2 1.7 3.0 .4 2.4 .8 9.0
Mar. 1.0 1.6 3.8 -.1 3.1 1.2 2.6
Apr. r .9 .5 r 3.3 .1 3.2 1.0 r 1.1
May r .8 -.2 r 4.0 .2 4.1 1.1 r 1.5
June -.2 -.8 -1.1 .3 3.3 .5 .3
July .6 -.1 2.5 .1 4.0 .6 1.2
Aug. -1.4 -.2 -6.6 .2 2.2 -1.2 -3.0

r=revised. Some of the figures shown above and elsewhere in this release may differ
from those previously reported because data for April 2007 have been revised to
reflect the availability of late reports and corrections by respondents.

-2-

Accounting for most of the downturn in finished goods prices, the index for energy
goods fell 6.6 percent in August following a 2.5-percent rise in the prior month. Prices for
consumer foods declined 0.2 percent after inching down 0.1 percent in July. By contrast,
slightly counteracting the downturn in finished goods prices, the index for finished goods
other than foods and energy moved up 0.2 percent in August compared with a 0.1-percent
increase a month earlier.

Before seasonal adjustment, the Producer Price Index for Finished Goods decreased
1.4 percent in August to 165.8 (1982 = 100). From August 2006 to August 2007, finished
goods prices advanced 2.2 percent. Over the same period, the index for finished goods
other than foods and energy climbed 2.2 percent, prices for finished consumer foods rose
4.7 percent, and the index for finished energy goods was unchanged. At the earlier stages
of processing, prices received by intermediate goods producers increased 2.4 percent, and
the crude goods index moved up 6.9 percent, for the 12 months ended August 2007.

Finished goods

The index for finished energy goods fell 6.6 percent in August, seasonally adjusted,
after rising 2.5 percent in July. Gasoline prices dropped 13.8 percent in August following
a 3.2-percent advance a month earlier. Similarly, the indexes for residential natural gas,
residential electric power, and diesel fuel also turned down after increasing in July. Prices
for home heating oil declined more in August than they had in the previous month, while
the index for liquefied petroleum gas moved up less than it had in July. By contrast,
slightly counteracting the downturn in prices for finished energy goods, the index for
finished lubricants rose 1.3 percent compared with a 1.8-percent decrease in the preceding
month. (See table 2.)

2006
Aug. -0.4 0.4 0.4 8.8 0.3 6.9 -3.4 5.1
Sept. .6 -6.0 0 4.7 1.8 -9.2 1.4 -8.2
Oct. .4 -5.9 -.1 .2 2.7 -20.1 -2.7 -21.1
Nov. 2.4 4.3 -.4 2.1 2.5 26.5 -.6 -10.5
Dec. 1.2 3.9 .1 2.8 -.1 4.8 1.7 -4.7

2007
Jan. 1.8 -3.7 0 1.1 2.4 -15.3 1.8 -9.5
Feb. 3.0 3.5 0 2.2 7.4 14.3 2.9 7.7
Mar. 1.8 4.2 .4 3.3 2.4 .3 7.4 13.3
Apr. r .9 r 1.4 r .8 3.7 r 1.5 r .7 r 1.3 r 11.6
May r .2 r 3.6 r .5 3.7 r .8 r 3.5 r -1.0 11.5
June 1.6 .3 .4 3.7 .5 .6 -.2 14.8
July .8 2.0 .2 4.1 2.1 1.1 0 13.1
Aug. .3 -3.7 -.5 2.4 -1.5 -5.6 1.3 6.9

-3-

The index for finished consumer foods fell 0.2 percent in August after edging down
0.1 percent in July. In August, price declines for fresh and dry vegetables, eggs for fresh
use, pork, processed young chickens, fresh fruits and melons, and for finfish and shellfish
outweighed price increases for beef and veal, soft drinks, and confectionery end products.

The index for finished goods other than foods and energy climbed 0.2 percent after
inching up 0.1 percent in July. In August, higher prices for pharmaceutical preparations,
civilian aircraft, passenger cars, alcoholic beverages, and newspaper circulation more than
offset lower prices for light motor trucks, electronic computers, heavy motor trucks, and
floor coverings.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components
declined 1.2 percent in August following a 0.6-percent increase in July. Prices for
intermediate energy goods, materials for nondurable manufacturing, and materials and
components for construction turned down after rising in July. The index for materials for
durable manufacturing fell more in August, while prices for intermediate foods and feeds
advanced less than they had in July. (See table B.)

Prices for intermediate energy goods fell 3.7 percent in August after moving up 2.0
percent in July. The diesel fuel index dropped 7.2 percent compared with a 6.8-percent
increase a month earlier. Prices for gasoline and jet fuels also turned down after rising in
July. The indexes for commercial natural gas, home heating oil, and natural gas to electric
utilities decreased more than they had in the previous month. By contrast, partially
offsetting the downturn in intermediate energy goods prices, the index for industrial
electric power advanced 1.6 percent in August following no change in the prior month.
Prices for commercial electric power rose after falling in July. (See table 2.)

The materials for nondurable manufacturing index declined 1.1 percent in August
after increasing by the same rate in July. Prices for primary basic organic chemicals
dropped 7.0 percent following a 2.8-percent rise in the preceding month. The index for
inedible fats and oils also turned down in August. Ethanol prices decreased more than they
had in July, and the index for plastic resins and materials was unchanged in August after
increasing a month earlier. By contrast, prices for intermediate basic organic chemicals
rose 0.6 percent following a 5.6-percent decline in July. The indexes for finished fabrics
and synthetic fibers also turned up in August. Prices for phosphates increased at faster
rates than they had in July.

The index for materials for durable manufacturing decreased 1.5 percent in August
after falling 0.5 percent in July. The cold rolled steel sheet and strip index dropped 17.4
percent in August following no change a month earlier. Prices for copper cathode and
refined copper; copper and brass mill shapes; hot rolled steel bars, plates, and structural
shapes; softwood lumber; and building paper and board turned down after rising in July.
By contrast, prices for hot rolled steel sheet and strip advanced 11.6 percent in August after
declining 12.9 percent in the previous month. The index for secondary aluminum also
turned up following a decline in July, and prices for semifinished steel mill products fell
less in August than they had a month earlier.

The index for materials and components for construction decreased 0.1 percent in
August following a 0.2-percent gain in July. The index for nonferrous wire and cable fell
1.6 percent after increasing 4.3 percent a month earlier. Prices for softwood lumber, cast
iron pressure and soil pipe fittings, treated wood, building paper and board, and plywood
also turned down subsequent to rising in the preceding month. Conversely, the index for
asphalt felts and coatings advanced 2.3 percent following a 2.5-percent decline in July.
Prices for fabricated structural metal products, concrete products, and wiring devices also
turned up in August.

-4-

The rate of increase in prices for intermediate foods and feeds slowed from 0.8
percent in July to 0.3 percent in August. The index for fluid milk products rose 2.3 percent
following a 6.5-percent advance in the previous month. Prices for shortening and cooking
oils also moved up less than in July. Prepared animal feeds prices were unchanged in
August after increasing a month earlier. The indexes for dry milk products; natural,
processed, and imitation cheese; and processed young chickens turned down following
advances in July. Prices for refined sugar and byproducts fell more than in the previous
month. By contrast, beef and veal prices climbed 2.3 percent in August after dropping 8.4
percent in the prior month. The index for snack chips also turned up in August, and pork
prices fell less than in July.

Crude goods

The Producer Price Index for Crude Materials for Further Processing fell 3.0
percent in August compared with a 1.2-percent advance in July. Prices for crude energy
materials declined after rising in the previous month. The index for crude foodstuffs and
feedstuffs also turned down in August. By contrast, slightly counteracting the downturn in
crude goods prices, the index for basic industrial materials increased following no change a
month earlier. (See table B.)

The index for crude energy materials fell 5.6 percent in August compared with a
1.1-percent gain in the preceding month. Natural gas prices dropped 12.4 percent after
declining 6.4 percent in the prior month. The crude petroleum index rose 1.3 percent
following an 11.8-percent rise in July. Prices for coal advanced 1.2 percent subsequent to
a 1.7-percent increase a month earlier. (See table 2.)

The crude foodstuffs and feedstuffs index decreased 1.5 percent in August
following a 2.1-percent advance in the previous month. Fluid milk prices declined 1.0
percent after rising 9.7 percent in July. Similarly, the indexes for soybeans, slaughter
broilers and fryers, slaughter cattle, and fresh and dry vegetables also turned down in
August. Prices for slaughter hogs were unchanged after rising in the preceding month, and
the index for slaughter turkeys increased less than it had a month earlier. By contrast, corn
prices declined 5.5 percent subsequent to a 12.8-percent decrease in July. The fresh fruits
and melons index also fell less than it had in the prior month, and wheat prices advanced
more than they had a month earlier.

The index for crude nonfood materials less energy rose 1.3 percent in August
following no change in July. Prices for iron and steel scrap moved up 1.3 percent
compared with a 4.7-percent decrease in the previous month. The indexes for hides and
skins and for gold ores also turned up in August. Prices for construction sand, gravel, and
crushed stone rose more than they had a month earlier. By contrast, the wastepaper index
edged up 0.2 percent after advancing 11.1 percent in July. Prices for copper base scrap and
raw cotton turned down in August. The softwood logs, bolts, and timber index declined
following no change in the prior month.

Net output price indexes

Mining, Utilities, and Manufacturing Industries. The Producer Price Index for the Net
Output of Total Mining, Utilities, and Manufacturing Industries turned down 1.0 percent in
August after climbing 0.8 percent in July. (Net output price indexes are not seasonally
adjusted.) Most of this downturn can be attributed to prices received by petroleum and
coal products manufacturers, which declined 8.6 percent after jumping 5.0 percent a month
earlier. The industry indexes for oil and gas extraction and for wood product
manufacturing also turned down after increasing in July. Prices received by natural gas
distributors fell more in August, and the index for electric power distribution moved up
less than in July. By contrast, partially offsetting the downturn in overall mining, utility,
and manufacturing prices, the index for the transportation manufacturing industry group
was unchanged after decreasing 0.3 percent in July. Prices received by electric power
generators advanced more in August than in the previous month, and the index for the
beverage and tobacco industry group turned up after falling in July.

-5-

Trade Industries. The increase in the Producer Price Index for the Net Output of Total
Trade Industries accelerated to 1.0 percent from 0.7 percent in July. (Trade indexes
measure changes in margins received by wholesalers and retailers.) Margins received by
merchant wholesalers of nondurable goods rose 4.5 percent after moving up 0.7 percent a
month earlier. The margin index for wholesalers of durable goods also rose more than in
July. Margins received by electronic shopping and mail order houses and by department
stores turned up after dropping in the prior month. The margin index for gasoline stations
was unchanged after decreasing in July. By contrast, the margin index for grocery stores
turned down 1.0 percent after advancing 2.1 percent in the preceding month. Margins for
miscellaneous general merchandise stores and for electronics and appliances stores also
fell following July increases.

Transportation and Warehousing Industries. The rise in the Producer Price Index for
the Net Output of Total Transportation and Warehousing Industries slowed to 0.4 percent
in August after climbing 1.3 percent in July. The industry index for couriers advanced 0.2
percent following a 0.5-percent rise in the previous month. Prices received by the
industries for scheduled passenger air transportation and for long distance, general freight
trucking (less than truckload) turned down after increasing in July. The industry index for
pipeline transportation of refined petroleum products was unchanged in August after
advancing in the prior month. Conversely, the industry index for line-haul railroads
jumped 1.7 percent after no change in July. Prices received by the water transportation
industry group and the industry for freight transportation arrangement moved up more in
August than in the previous month. The industry index for local, general-freight trucking
turned up after falling in July.

Traditional Service Industries. The Producer Price Index for the Net Output of Total
Traditional Service Industries turned up 0.4 percent in August after decreasing 0.2 percent
in July. The index for the depository credit intermediation industry group rose 4.0 percent
following a 4.5-percent drop in the prior month. Prices received by offices of lawyers and
non-internet broadcasters also turned up in August. The index for the investment banking
and securities dealing industry moved up following no change in July. By contrast, the
index for general medical and surgical hospitals turned down 0.3 percent in August after
increasing 0.4 percent in the previous month. Prices received by the telecommunications
industry group, as well as, by the industries for non-casino hotels and motels, offices of
real estate agents and brokers, and securities brokerages also fell following July advances.

*****

Producer Price Index (PPI) August 2007 [PDF]

Producer Price Index (PPI) August 2007 [Text]

Source: Department of Labor, Bureau of Labor Statistics

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