EconoIndicators / Producer Price Index (PPI)

Producer Price Index At a Glance

Finished Goods Index: Up 1.0%
Finished Goods Core: Up 0.4%
Finished Goods Annual Change: Up 7.4%
Finished Goods Energy: Up 1.5%
Finished Goods Food: Up 1.7%
Intermediate Goods Index: Up 1.4%
Crude Goods Index: Up 2.5%

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Producer Price Indexes - January 2008

The Producer Price Index for Finished Goods rose 1.0 percent in January, seasonally adjusted, the
Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a decline of
0.3 percent in December and a 2.6-percent advance in November. At the earlier stages of processing, prices for
intermediate goods moved up 1.4 percent after falling 0.2 percent in the prior month, and the crude goods index
increased 2.5 percent following a 1.1-percent advance in December. (See table A.)

2007
Jan. -0.1 0.9 -2.0 0.1 0.1 -0.2 -5.7
Feb. 1.2 1.6 3.2 .4 2.4 .8 9.0
Mar. .9 1.5 3.2 -.1 3.1 1.0 2.5
Apr. .7 .5 2.6 .2 3.2 1.1 1.0
May .6 -.7 2.9 .2 3.9 1.0 1.0
June .1 -.2 -.3 .2 3.3 .4 .8
July .5 -.1 2.2 .2 4.2 .7 .3
Aug. -.8 0 -4.2 .1 2.3 -.9 -3.5
Sept. .5 1.1 1.2 .1 4.4 0 .9
Oct. .5 1.2 1.4 .1 6.1 .5 3.0
Nov. 2.6 -.2 11.4 .3 7.2 3.1 9.2
Dec. -.3 1.4 -3.0 .2 6.3 -.2 1.1

2008
Jan. 1.0 1.7 1.5 .4 7.4 1.4 2.5

NOTE: Some of the percent changes shown here and elsewhere in this release may differ
from those previously reported because seasonal adjustment factors have been recalculated
to reflect developments during 2007. In addition, indexes for September 2007 have been
recalculated to incorporate late reports and corrections by respondents. All indexes
are subject to revision 4 months after original publication.

-2-

The upturn in finished goods prices was led by the index for energy goods, which increased 1.5 percent
in January after falling 3.0 percent in December. Prices for finished goods excluding foods and energy
advanced 0.4 percent following a 0.2-percent rise in the preceding month. The index for finished consumer
foods increased 1.7 percent after climbing 1.4 percent a month earlier.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.8 percent in
January to 171.9 (1982 = 100). From January 2007 to January 2008, the index for finished goods moved up 7.4
percent. Over the same period, prices for finished energy goods climbed 22.6 percent, the index for finished
consumer foods rose 8.3 percent, and prices for finished goods other than foods and energy advanced 2.3
percent. For the 12 months ended January 2008, the index for intermediate goods increased 8.8 percent, and
prices for crude goods jumped 31.3 percent.

Finished goods

The index for finished energy goods turned up 1.5 percent in January after falling 3.0 percent a month
earlier. The index for gasoline increased 2.9 percent following a 7.6-percent drop in the preceding month.
Prices for home heating oil, liquefied petroleum gas, residential natural gas, diesel fuel, and kerosene also
turned up after falling in December. The index for lubricating oils rose after no change in the prior month. By
contrast, partially offsetting the upturn in finished energy goods prices, the index for residential electric power
fell 1.2 percent after advancing 0.6 percent in the previous month. (See table 2.)

2007
Jan. 1.6 -1.6 0.0 1.1 1.9 -15.3 0.9 -9.5
Feb. 3.0 3.5 0 2.2 6.9 14.3 3.6 7.7
Mar. 1.7 3.1 .4 3.3 2.3 .3 6.9 13.3
Apr. .9 1.9 .8 3.7 1.3 .8 1.1 11.6
May 0 2.8 .5 3.8 .8 3.0 -1.8 11.3
June 1.9 .7 .3 3.6 -.1 2.2 -.3 15.5
July .7 2.0 .4 4.2 1.1 -.5 .7 12.9
Aug. .4 -2.9 -.4 2.4 -1.6 -6.4 .6 6.1
Sept. 1.3 -.5 .1 4.1 2.7 -.8 2.2 11.3
Oct. 1.3 1.7 .1 5.6 -.3 6.0 2.0 25.7
Nov. 1.1 10.7 1.0 8.1 2.9 17.0 .2 22.4
Dec. 2.3 -1.6 0 6.8 4.6 -.7 .2 20.6

2008
Jan. 3.3 2.8 .8 8.8 2.7 1.8 4.0 31.3

NOTE: Some of the percent changes shown here and elsewhere in this release may
differ from those previously reported because seasonal adjustment factors have been
recalculated to reflect developments during 2007. In addition, indexes for
September 2007 have been recalculated to incorporate late reports and corrections
by respondents. All indexes are subject to revision 4 months after original
publication.

-3-

The rise in the index for finished goods excluding foods and energy accelerated to 0.4 percent in January
from 0.2 percent in December. The index for pharmaceutical preparations advanced 1.5 percent after increasing
0.4 percent in the prior month. Prices for light motor trucks and passenger cars turned up after falling in
December. The index for book publishing increased after no change a month earlier. By contrast, the index for
cosmetics and other toilet preparations turned down 1.7 percent in January after rising 1.1 percent in the
preceding month. Prices for floor coverings also declined following December increases. The index for
civilian aircraft advanced less than in the previous month, and prices for cigarettes were unchanged after
increasing in December.

The index for finished consumer foods rose 1.7 percent in January after advancing 1.4 percent a month
earlier. The rise in the index for bakery products accelerated to 2.7 percent from 0.1 percent in December.
Prices for pasta products also rose more than in the prior month. The indexes for soft drinks, frozen specialties,
and processed turkeys turned up after falling in December. Conversely, the index for fresh and dry vegetables
turned down 1.0 percent in January after rising 13.4 percent in the previous month. Prices for dairy products
also declined following December advances. The index for fresh fruits and melons increased less in January
than in the preceding month.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components rose 1.4 percent in
January following a 0.2-percent decrease in December. This upturn was broad based. Prices for intermediate
energy goods and materials for durable manufacturing advanced in January after declining a month earlier,
while the indexes for materials for nondurable manufacturing, materials and components for construction, and
intermediate foods and feeds increased more than in December. Excluding foods and energy, prices for
intermediate goods climbed 0.8 percent in January compared with no change in the prior month. (See table B.)

The index for intermediate energy goods jumped 2.8 percent in January after falling 1.6 percent in
December. Diesel fuel prices rose 5.9 percent following a 0.8-percent decrease in December. Similarly, the
indexes for gasoline, home heating oil, liquefied petroleum gas, and industrial natural gas also turned up in
January. Prices for jet fuels moved up more than they had in December. The indexes for commercial electric
power and natural gas to electric utilities declined less in January than a month earlier. By contrast, partially
offsetting the upturn in intermediate energy goods prices, the commercial natural gas index moved down 1.9
percent after advancing 0.3 percent in December. Prices for industrial electric power fell more in January than
in the preceding month. (See table 2.)

The index for materials for nondurable manufacturing increased 2.2 percent in January after inching up
0.1 percent in December. Leading this acceleration, prices for primary basic organic chemicals jumped 3.2
percent in January following a 2.8-percent drop a month earlier. The index for plastic resins and materials also
turned up after falling in December. Prices for basic inorganic chemicals, paper, fertilizer materials, synthetic
rubber, and finished fabrics rose more in January than they had in the prior month. Conversely, the index for
medicinal and botanical chemicals declined 2.5 percent compared with a 0.1-percent decrease in December.
Prices for inedible fats and oils increased less in January than they had in the previous month.

The index for materials for durable manufacturing moved up 0.6 percent in January following a 1.0-
percent decrease in December. Prices for primary nonferrous metals rose 1.1 percent after dropping 8.5 percent
in the prior month. The indexes for nonferrous wire and cable, copper and brass mill shapes, and thermoplastic
resins also turned up in January. Prices for hot rolled steel bars, plates, and structural shapes; semifinished steel
mill products; and hot rolled steel sheet and strip advanced more than they had in December. By contrast,
prices for cold rolled steel sheet and strip declined 2.2 percent following a 1.6-percent gain in December. The
indexes for titanium mill shapes and secondary aluminum also turned down in January.

-4-

The index for materials and components for construction climbed 0.4 percent in January after inching up
0.1 percent in December. Prices for nonferrous wire and cable jumped 3.8 percent in January following a 3.3-
percent drop a month earlier. The index for millwork also turned up after falling in December. Prices for
paving mixtures and blocks, asphalt felts and coatings, and wiring devices rose more in January than they had in
the previous month. Conversely, the index for fabricated structural metal products advanced 0.2 percent
compared with a 0.5-percent increase in December. Prices for concrete products and for prefabricated wood
buildings and components turned down in January. The softwood lumber index declined more than in the
preceding month.

The index for intermediate foods and feeds moved up 3.3 percent in January following a 2.3-percent rise
in December. Leading this acceleration, prices for prepared animal feeds increased 4.8 percent in January after
advancing 1.7 percent a month earlier. The index for confectionery materials also climbed at a faster rate than it
had in December. Prices for fluid milk products and pork turned up in January. The indexes for soft drink
liquid beverage bases and snack chips rose following no change in December. By contrast, flour prices
increased 3.3 percent in January after surging 12.2 percent in the prior month. The indexes for natural,
processed, and imitation cheese and for refined sugar and byproducts turned down in January.

Crude goods

The Producer Price Index for Crude Materials for Further Processing increased 2.5 percent in January
following a 1.1-percent rise in December. The index for crude energy materials turned up in January, and
prices for crude nonfood materials less energy advanced more than they had a month earlier. By contrast,
partially offsetting the acceleration in crude material prices, the index for crude foodstuffs and feedstuffs
increased less than it had in December. (See table B.)

Prices for crude energy materials advanced 1.8 percent in January after declining 0.7 percent in the
previous month. The crude petroleum index rose 2.7 percent subsequent to a 2.4-percent decrease a month
earlier. Prices for coal advanced 3.9 percent following a 0.5-percent gain in December. By contrast, the index
for natural gas increased 0.7 percent compared with a 0.9-percent increase in the preceding month. (See table
2.)

Prices for crude nonfood materials less energy moved up 4.0 percent in January subsequent to a 0.2-
percent increase in December. The iron and steel scrap index jumped 17.2 percent following a 5.3-percent rise
in the previous month. Similarly, prices for gold ores and phosphates also advanced more than they had a
month earlier. The indexes for wastepaper and for both copper and aluminum base scrap turned up in January.
Prices for iron ore rose after no change in December. By contrast, the index for construction sand, gravel, and
crushed stone declined 1.4 percent in January after advancing 0.8 percent in December. Prices for industrial
sand increased less than they had in the prior month.

The index for crude foodstuffs and feedstuffs advanced 2.7 percent following a 4.6-percent rise a month
earlier. Wheat prices increased 6.6 percent in January subsequent to a 22.6-percent surge in December. The
index for fresh fruits and melons also advanced less than it had in December. Prices for slaughter cattle, fluid
milk, slaughter hogs, and for fresh and dry vegetables turned down in January. Conversely, the index for
slaughter broilers and fryers rose 10.0 percent following a 1.6-percent decline a month earlier. Corn prices
increased more than they had in December.

-5-

Net output price indexes

Mining, Utilities, and Manufacturing Industries. The Producer Price Index for the Net Output of Total
Mining, Utilities, and Manufacturing Industries advanced 0.8 percent in January after decreasing 0.6 percent in
December. (Net output price indexes are not seasonally adjusted.) Leading this upturn, prices received by
manufacturers of petroleum and coal products increased 2.9 percent following a 6.0-percent drop in December.
The industry group indexes for transportation equipment, oil and gas extraction, and metal ore mining, as well
as, prices received by the electric power distribution industry also turned up in January. The indexes for the
food and chemical manufacturing industry groups rose more than in December. By contrast, partially offsetting
the upturn in the total mining, utilities, and manufacturing industries index, prices received by the industry for
electric power generation decreased 1.6 percent in January after rising 1.1 percent a month earlier. The industry
group index for computer and electronic products fell following no change in December. In January, the index
for mining, utilities, and manufacturing industries was 107.1 (December 2006 = 100), 7.6 percent above its
year-ago level.

Trade Industries. The Producer Price Index for the Net Output of Total Trade Industries decreased 1.2 percent
in January following a 1.5-percent rise in December. (Trade indexes measure changes in margins received by
wholesalers and retailers.) This downturn is primarily attributable to margins received by gasoline stations,
which dropped 35.7 percent after jumping 41.1 percent in the previous month. The margin indexes for
merchant wholesalers of durable goods and for electronics and appliance stores also turned down in January.
Conversely, margins received by merchant wholesalers of nondurable goods advanced 4.7 percent subsequent
to a 5.6-percent decline in December. The margin index for automobile dealers also turned up after falling in
the prior month. The margin index for grocery stores rose in January following no change a month earlier.
Margins received by clothing stores and department stores fell less than they had in December. In January, the
index for total trade industries was 104.6 (December 2006 = 100), 2.3 percent above its year-ago level.

Transportation and Warehousing Industries. The Producer Price Index for the Net Output of Total
Transportation and Warehousing Industries increased 1.4 percent in January after inching up 0.1 percent in the
prior month. Leading this acceleration, prices received by the scheduled passenger air transportation industry
advanced 5.2 percent following a 3.0-percent decrease in December. The industry index for local specialized
freight trucking of new goods also turned up after falling in the previous month. The industry indexes for line-
haul railroads, local general freight trucking, and water freight transportation rose more in January than they had
a month earlier. By contrast, prices received by couriers fell 0.3 percent after increasing 2.0 percent in
December. The industry indexes for long distance general freight trucking and freight transportation
arrangement also turned down after rising in December. In January, the index for transportation and
warehousing industries was 107.8 (December 2006 = 100), 6.0 percent above its year-ago level.

Traditional Services Industries. The Producer Price Index for the Net Output of Total Traditional Services
Industries advanced 0.5 percent in January following a 0.9-percent decline in December. Prices received by the
depository credit intermediation industry group rose 1.1 percent after falling 7.4 percent in the previous month.
The industry indexes for general medical and surgical hospitals, offices of lawyers, and casino hotels also
turned up in January following decreases a month earlier. Prices received by direct health and medical
insurance carriers increased more than they had in December. By contrast, the industry index for security and
commodity contracts intermediation and brokerage declined 3.3 percent in January following a 1.9-percent gain
in December. Prices received by the engineering services industry and wired telecommunications carriers also
turned down in January. The industry index for lessors of nonresidential buildings rose less than it had in
December. In January, the index for

Producer Price Index (PPI) - January 2008 [PDF]

Producer Price Index (PPI) - January 2008 [Text]

Source: Department of Labor, Bureau of Labor Statistics

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