EconoIndicators

Producer Price Index At a Glance

• Finished Goods Index: Up 1.2%
• Finished Goods Core: Up 0.7%
• Finished Goods Annual Change: Up 9.8%
• Finished Goods Energy: Up 3.1%
• Finished Goods Food: Up 0.3%
• Intermediate Goods Index: Up 2.7%
• Crude Goods Index: Up 4.2%

Technorati Tags: PPI, inflation, Producer, Price, Index

Producer Price Indexes — July 2008

The Producer Price Index for Finished Goods advanced 1.2 percent in July, seasonally
adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This
increase followed a 1.8-percent jump in June and a 1.4-percent rise in May. At the earlier stages
of processing, prices received by manufacturers of intermediate goods moved up 2.7 percent in
July compared with a 2.1-percent gain in the prior month, and the index for crude materials for
further processing climbed 4.2 percent subsequent to a 3.7-percent increase in June. (See table
A.)

Table A. Monthly and annual percent changes in selected stage-of-processing price indexes, seasonally adjusted
Month
Finished goods
Intermediate
goods
Crude
goods

Total
Foods
Energy
Except foods
and energy
Change in
finished goods
from 12 months
ago (unadj.)

2007

July
0.5
-0.1
2.2
0.2
4.2
0.7
0.3
Aug.
-0.8
0.0
-4.2
0.1
2.3
-0.9
-3.5
Sept.
0.5
1.1
1.2
0.1
4.4
0.0
0.9
Oct.
0.5
1.3
1.1
0.1
6.1
0.6
4.0
Nov.
2.6
-0.2
11.7
0.3
7.3
2.9
6.8
Dec.
-0.5
1.3
-3.5
0.1
6.2
0.2
1.8
2008

Jan.
1.2
1.7
2.2
0.6
7.4
1.2
2.9
Feb.
0.3
-0.6
1.0
0.4
6.5
0.9
3.9
Mar.(1)
0.9
1.4
2.5
0.1
6.7
2.4
6.7
Apr.(1)
0.3
-0.1
-0.2
0.6
6.5
0.7
4.6
May
1.4
0.8
4.9
0.2
7.2
2.9
6.7
June
1.8
1.5
6.0
0.2
9.2
2.1
3.7
July
1.2
0.3
3.1
0.7
9.8
2.7
4.2
Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for March 2008 have been revised to reflect the availability of late reports and corrections by respondents.

Among prices for finished goods, the index for energy goods rose 3.1 percent in July
following a 6.0-percent jump in June. Price increases for finished consumer foods also slowed,
from 1.5 percent in June to 0.3 percent in July. By contrast, partially offsetting the deceleration
in finished goods prices, the index for finished goods other than foods and energy advanced 0.7
percent after edging up 0.2 percent in June.

Before seasonal adjustment, the Producer Price Index for Finished Goods moved up 1.4
percent in July to 185.0 (1982 = 100). From July 2007 to July 2008, the finished goods index
advanced 9.8 percent. Over the same period, prices for finished energy goods jumped 28.0
percent, the index for finished goods other than foods and energy increased 3.5 percent, and
prices for finished consumer foods rose 8.7 percent. For the 12-month period ended in July, the
index for intermediate goods advanced 16.6 percent, and prices received by crude goods
producers surged 51.2 percent.

Finished goods

The finished energy goods index increased 3.1 percent in July compared with a 6.0-
percent advance in June. Home heating oil prices moved up 3.7 percent in July following a 12.4-
percent jump in the previous month, and the gasoline index turned down 0.2 percent after rising
9.0 percent in June. Prices for diesel fuel increased less than they had a month earlier.
Conversely, slightly counteracting the deceleration in finished energy goods prices, the index for
residential electric power climbed 2.0 percent subsequent to a 0.8-percent gain in June. Prices
for residential natural gas, asphalt, liquefied petroleum gas, and lubricating and similar oils also
rose more than in the prior month. (See table 2.)

The index for finished consumer foods edged up 0.3 percent in July after jumping 1.5 percent in
June. Higher prices for beef and veal, fluid milk products, soft drinks, bakery products, and
boxed meat outweighed lower prices for fresh vegetables (except potatoes), eggs for fresh use,
fresh fruits and melons, natural cheese (except cottage cheese), and frozen juices and ades.

Table B. Monthly and annual percent changes in selected price indexes for intermediate goods and crude goods, seasonally adjusted
Month
Intermediate goods
Crude goods

Foods
Energy
Except
foods
and energy
Change in
intermediate
goods from
12 months
ago (unadj.)
Foods
Energy
Except
foods
and energy
Change in
crude
goods from
12 months
ago (unadj.)
2007

July
0.7
2.0
0.4
4.2
1.1
-0.5
0.7
12.9
Aug.
0.4
-2.9
-0.4
2.4
-1.6
-6.4
0.6
6.1
Sept.
1.3
-0.5
0.1
4.1
2.7
-0.8
2.2
11.3
Oct.
1.2
1.3
0.4
5.7
-0.2
8.2
1.5
26.8
Nov.
1.4
10.4
0.8
7.9
2.9
12.3
-0.9
20.9
Dec.
2.0
0.1
0.1
7.1
4.2
0.5
0.8
19.8
2008

Jan.
3.5
1.9
0.9
8.9
3.1
1.8
4.7
30.8
Feb.
2.4
1.2
0.6
9.0
1.2
6.6
3.6
24.6
Mar.(1)
3.0
6.0
1.3
10.7
2.2
11.5
3.7
29.7
Apr.(1)
-0.9
0.1
0.9
10.5
-1.6
5.7
7.7
34.3
May
3.2
6.2
2.0
12.6
1.8
13.1
5.0
41.5
June
1.0
5.0
1.3
14.5
3.5
5.4
-0.2
45.5
July
4.0
4.3
2.0
16.6
0.1
6.9
3.4
51.2
Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for March 2008 have been revised to reflect the availability of late reports and corrections by respondents.

The index for finished goods less foods and energy climbed 0.7 percent in July after
increasing 0.2 percent a month earlier. Prices for light motor trucks moved up 0.8 percent
subsequent to a 1.8-percent drop in June. The indexes for pharmaceutical preparations,
consumer plastic products, and communication and related equipment also turned up in July.
Prices for turbine and turbine generator sets rose more than they had in the previous month.
Conversely, the index for passenger cars increased 1.4 percent following a 2.2-percent gain in
June. Pet food prices also rose less in July. The indexes for wood household furniture and for
textbooks turned down after rising in the prior month.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components
advanced 2.7 percent in July following a 2.1-percent increase in June. Prices for materials for
nondurable manufacturing, intermediate food and feeds, and materials and components for
construction rose more than they had in the previous month. By contrast, partially offsetting the
acceleration in intermediate goods prices, the indexes for intermediate energy goods and
materials for durable manufacturing increased less than they had in June. Excluding foods and
energy, prices for intermediate goods moved up 2.0 percent in July after rising 1.3 percent a
month earlier. (See table B.)

The index for materials for nondurable manufacturing climbed 5.4 percent in July
compared with a 2.7-percent gain in the preceding month. Prices for basic organic chemicals
moved up 6.9 percent in July following a 2.6-percent advance a month earlier. The indexes for
plastic resins and materials, inedible fats and oils, paper, meats, and synthetic rubber also
increased more than they had in June. Prices for alkalies and chlorine turned up in July. By
contrast, the advance in the index for agricultural chemicals slowed to 7.9 percent from 14.2
percent in June. Prices for leather turned down in July. (See table 2.)

Prices for intermediate foods and feeds advanced 4.0 percent subsequent to a 1.0-percent
increase in June. The formula feeds index climbed 8.3 percent after rising 1.1 percent in the
previous month. Prices for meats and for shortening and cooking oils also increased more than
they had a month earlier. The index for corn, cottonseed, and soybean cake and meal turned up
in July. By contrast, the flour index moved down 7.8 percent following a 0.8-percent decrease in
June. Prices for processed eggs also declined more compared with the preceding month. The
indexes for natural, processed, and imitation cheese and for processed poultry turned down in
July.

The index for materials and components for construction advanced 1.7 percent in July
after rising 1.5 percent in the preceding month. The paving mixtures and blocks index increased
14.5 percent subsequent to a 6.3-percent advance a month earlier. Prices for asphalt felts and
coatings and for plastic construction products also rose more than they had in June. The index
for nonferrous wire and cable turned up in July, and prices for cast iron pressure and soil pipe
and fittings advanced following no change in the prior month. By contrast, prices for steel mill
products moved up 1.7 percent after jumping 8.1 percent in June. The index for non-farm
prefabricated metal building systems also advanced less than it had a month earlier. Prices for
softwood lumber and ready-mixed concrete turned down in July.

The intermediate energy goods index moved up 4.3 percent subsequent to a 5.0-percent
increase a month earlier. Diesel fuel prices advanced 2.6 percent following a 6.7-percent jump in
June. The indexes for jet fuel and home heating oil also rose less than in the preceding month.
Gasoline prices declined after climbing in June. By contrast, the index for electric power
increased 1.3 percent compared with a 0.3-percent decline in the previous month. Price
increases for residual fuels, utility natural gas, and asphalt accelerated in July.

Prices for materials for durable manufacturing moved up 1.5 percent following a 1.7-
percent increase in June. Leading this deceleration, the steel mill products index advanced 1.7
percent subsequent to an 8.1-percent rise in the previous month. Prices for softwood lumber and
for building paper and board turned down in July. By contrast, the index for primary nonferrous
metals rose 3.2 percent in July after decreasing 5.8 percent a month earlier. Similarly, prices for
copper and brass mill shapes, nonferrous wire and cable, and paints and allied products also
turned up in July. The plastic resins and materials index advanced more than it had in the prior
month.

Crude goods

The Producer Price Index for Crude Materials for Further Processing increased 4.2
percent in July following a 3.7-percent advance in June. Prices for crude energy materials rose
more than in June. The index for crude nonfood materials less energy turned up after falling a
month earlier. By contrast, partially offsetting the acceleration in crude goods prices, the index
for crude foodstuffs and feedstuffs increased less in July than it had in the prior month. (See
table B.)

The index for crude energy materials climbed 6.9 percent in July following a 5.4-percent
rise a month earlier. The increase in the index for natural gas accelerated to 7.8 percent from 5.2
percent in June. Prices for crude petroleum advanced 6.7 percent following a 4.4-percent rise in
the previous month. Conversely, the index for coal moved up 2.1 percent in July after jumping
14.4 percent in the prior month. (See table 2.)

The index for crude nonfood materials less energy turned up 3.4 percent in July after
edging down 0.2 percent a month earlier. The index for nonferrous scrap climbed 5.0 percent
following a 5.6-percent drop in June. Prices for wastepaper and for stainless and alloy steel
scrap also turned up after falling in the previous month. The indexes for carbon steel scrap and
gold ores advanced more than in June. Conversely, the rise in the index for phosphates slowed
to 9.6 percent in July from 25.4 percent in the prior month. Prices for construction sand, gravel,
and crushed stone, and for pulpwood turned down after increasing in June.

The index for crude foodstuffs and feedstuffs inched up 0.1 percent after advancing 3.5
percent in June. In July, higher prices for slaughter steers and heifers, soybeans, slaughter
chickens, and slaughter cows and bulls slightly outweighed lower prices for wheat, corn,
ungraded chicken eggs, and fresh vegetables, except potatoes.

Net output price indexes

Mining, Utilities, and Manufacturing Industries. The Producer Price Index for the Net Output
of Total Mining, Utilities, and Manufacturing Industries climbed 2.2 percent in July following a
1.8-percent advance in June. (Net output price indexes are not seasonally adjusted.) Prices
received by the livestock slaughtering industry jumped 6.8 percent in July after increasing 0.7
percent a month earlier. The indexes for animal feed manufacturing (excluding pet food), natural
gas distribution, and crude petroleum and natural gas extraction also moved up more than they
had in June. Prices received by the industry for automobile, light truck, and utility vehicle
manufacturing turned up in July. By contrast, partially offsetting the acceleration in the index
for total mining, utilities, and manufacturing industries, the index for electric power distribution
advanced 1.9 percent following a 3.3-percent rise in June. Prices received by the industries for
phosphate fertilizer manufacturing and petroleum refining also increased less in July than they
had in the preceding month. The index for cheese manufacturing declined after moving up in
June. In July, the index for total mining, utilities, and manufacturing industries was 118.9
(December 2006 = 100), 12.9 percent above its year-ago level.

Trade Industries. The Producer Price Index for the Net Output of Total Trade Industries
climbed 1.1 percent in July following a 0.7-percent rise in June. (Trade indexes measure
changes in margins received by wholesalers and retailers.) Margins received by wholesalers of
nondurable goods edged up 0.2 percent in July after dropping 4.0 percent in the prior month.
The margin indexes for grocery stores (excluding convenience stores), electronic shopping and
mail-order houses, and tire dealers also turned up after falling in June. Margins received by
gasoline stations with convenience stores and by pharmacies and drug stores increased more in
July than they had a month earlier. By contrast, margins received by merchant wholesalers of
durable goods climbed 1.3 percent following a 2.6-percent rise a month earlier. The margin
index for non-discount department stores also advanced less than it had in June. Margins
received by family clothing stores turned down in July. In July, the index for total trade
industries was 110.1 (December 2006 = 100), 5.5 percent above its year-ago level.

Transportation and Warehousing Industries. The Producer Price Index for the Net Output of
Total Transportation and Warehousing Industries rose 0.8 percent in July after climbing 2.3
percent in June. The increase in prices received by the scheduled passenger air transportation
industry slowed to 0.5 percent in July from 5.8 percent in the previous month. The indexes for
general freight trucking, line-haul railroads, deep sea freight transportation, and both local and
long distance specialized freight trucking of new goods also advanced less than they had in June.
Prices received by the scheduled freight air transportation industry turned down in July. By
contrast, the index for the couriers industry increased 2.4 percent following a 1.2-percent gain in
June. Prices received by the industries for pipeline transportation of crude oil and for general
warehousing and storage moved up in July after no change in the prior month. In July, the index
for total transportation and warehousing industries was 115.9 (December 2006 = 100), 10.3
percent above its year-ago level.

Traditional Service Industries. The Producer Price Index for the Net Output of Total
Traditional Service Industries edged down 0.2 percent in July after inching up 0.1 percent in
June. Leading this downturn, prices received by the commercial banking industry dropped 5.5
percent in July following a 0.4-percent decline in the preceding month. Prices received by
casino hotels also fell more than in June. The indexes for the securities, commodity contracts,
and like activities industry sector and for the engineering services industry turned down in July.
Conversely, the index for savings institutions rose 1.2 percent following a 2.7-percent decline in
June. Prices received by the industries for software publishers, offices of certified public
accountants, and real estate agents and brokers also turned up in July after falling in the previous
month. The index for passenger car rental rose more than in June. In July, the index for total
traditional service industries was 101.8 (December 2006 = 100), 0.4 percent above its year-ago
level.

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

Source: Department of Labor, Bureau of Labor Statistics