EconoIndicators

Producer Price Index At a Glance

• Finished Goods Index: Down 2.2%
• Finished Goods Core: Up 0.1%
• Finished Goods Annual Change: Up 0.4%
• Finished Goods Energy: Down 11.2%
• Finished Goods Food: Unchanged
• Intermediate Goods Index: Down 4.3%
• Crude Goods Index: Down 12.5%

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

Producer Price Indexes - November 2008

The Producer Price Index for Finished Goods fell 2.2 percent in November, seasonally
adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This
decline followed decreases of 2.8 percent in October and 0.4 percent in September. At the
earlier stages of processing, prices received by manufacturers of intermediate goods dropped 4.3
percent in November after falling 3.9 percent in the prior month, and the crude goods index
declined 12.5 percent subsequent to an 18.6-percent decrease in October. (See table A.)
Among prices for finished goods, the index for energy goods fell 11.2 percent in
November following a 12.8-percent drop in the preceding month. Prices for consumer foods
were unchanged after declining 0.2 percent in October. By contrast, partially counteracting the
slower rate of decrease in the finished goods index, prices for goods other than foods and energy
advanced 0.1 percent in November compared with a 0.4-percent rise a month earlier.

Before seasonal adjustment, the Producer Price Index for Finished Goods fell 2.9 percent
in November to 172.1 (1982 = 100). For the 12 months ended in November, prices for finished
goods advanced 0.4 percent. Over the same period, the index for finished goods other than foods
and energy rose 4.2 percent, and prices for finished consumer foods increased 6.7 percent. By
contrast, the index for finished energy goods decreased 15.4 percent for the 12 months ended in
November. At the earlier stages of processing, prices received by intermediate goods producers
advanced 2.6 percent, while the crude goods index declined 19.4 percent.

Finished goods

The index for finished energy goods fell 11.2 percent in November subsequent to a 12.8-
percent drop in October. Prices for residential natural gas decreased 4.6 percent in November
after declining 5.9 percent a month earlier. The indexes for both unleaded premium and mid-
premium gasoline and for kerosene also moved down less than they had in October. Prices for
residential electric power turned up in November after falling in the prior month. By contrast,
the home heating oil index decreased 23.3 percent in November following a 9.6-percent decline
in the preceding month. Prices for liquefied petroleum gas and unleaded regular gasoline also
fell more than they had in October. (See table 2.)
The index for finished consumer foods was unchanged in November following a 0.2-
percent decline in the previous month. Prices for beef and veal increased 6.3 percent after
decreasing 8.8 percent in October. The indexes for packaged fluid milk and related products and
citrus fruits also turned up in November. By contrast, the index for processed young chickens
declined 0.9 percent subsequent to a 5.9-percent advance in October. Prices for eggs for fresh
use, natural cheese (except cottage cheese), and melons also turned down after rising a month
earlier. The index for fresh vegetables (except potatoes) rose less in November than in the prior
month.

The index for finished goods other than foods and energy inched up 0.1 percent in
November following a 0.4-percent increase in the preceding month. Tire prices advanced 0.1
percent after climbing 4.0 percent in October. The indexes for light motor trucks, consumer
plastic products, malt beverages, power and distribution transformers, and for jewelry and
jewelry products turned down in November. By contrast, passenger car prices fell 0.6 percent
subsequent to a 1.7-percent decrease in October. The index for pharmaceutical preparations rose
in November after declining in the prior month, and prices for soaps and synthetic detergents
increased more than they had in October.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components
decreased 4.3 percent in November after falling 3.9 percent in October. Prices for materials for
both nondurable and durable manufacturing, intermediate energy goods, and materials and
components for construction declined more in November than they had a month earlier.
Conversely, partially offsetting the faster rate of decrease in intermediate materials prices, the
index for intermediate foods and feeds fell less than it had in October. (See table B.)

The index for materials for nondurable manufacturing moved down 8.5 percent in
November following a 4.6-percent decline in the prior month. Prices for basic inorganic
chemicals decreased 4.9 percent compared with a 1.1-percent gain in October. The index for
surface active agents also turned down after rising in the previous month. The indexes for plastic
resins and materials and for agricultural chemicals and chemical products fell more than they had
a month earlier. Prices for cyclic intermediate chemicals and dyes decreased after no change in
the preceding month. By contrast, prices for primary basic organic chemicals moved down 15.5
percent following a 20.8-percent plunge a month earlier. The indexes for beef and veal and for
writing and printing papers turned up in November. Prices for synthetic rubber advanced more
than in the previous month. (See table 2.)

The index for intermediate energy goods fell 12.3 percent in November subsequent to a
10.6-percent decline a month earlier. Prices for residual fuels plummeted 34.5 percent following
a 19.6-percent decrease in October. The indexes for heating oil, unleaded regular gasoline,
liquefied petroleum gas, and diesel fuel also fell more in November than in the preceding month.
Prices for industrial electric power edged down after advancing in the prior month. By contrast,
the rate of decline in the natural gas to electric utilities index slowed to 1.4 percent following a
13.3-percent decrease in October. Prices for commercial natural gas, jet fuel, and unleaded
premium gasoline also declined less than they had a month earlier.

Prices for materials for durable manufacturing moved down 6.2 percent in November
compared with a 4.1-percent decrease in the preceding month. The steel mill products index fell
9.0 percent subsequent to a 4.2-percent decline in October. Similarly, prices for secondary
nonferrous metals, copper and brass mill shapes, nonferrous wire and cable, and aluminum mill
shapes also fell more than they had a month earlier. The index for non-marine OEM paint
finishes turned down after rising in October. By contrast, the rate of decline in prices for
unfinished softwood lumber (not made from purchased materials) slowed to 2.6 percent in
November following a 9.6-percent decline in the prior month. The index for synthetic fibers also
declined less than it had in the prior month.

Prices for materials and components for construction declined 1.1 percent after
decreasing 0.7 percent in October. The index for asphalt felts and coatings fell 1.5 percent
following a 5.6-percent increase a month earlier. Prices for millwork, plastic products, and
fabricated ferrous wire products also turned down in November. The indexes for steel mill
products and for nonferrous wire and cable decreased more than they had in October.
Conversely, prices for paving mixtures and blocks inched up 0.1 percent after moving down 3.7
percent in the prior month. The index for ready-mix concrete also turned up in November.
Prices for unfinished softwood lumber (not made from purchased materials) and treated wood
fell less than they had in October.

Prices for intermediate foods and feeds decreased 2.4 percent in November compared
with a 5.5-percent decline in the prior month. The fats and oils index moved down 2.9 percent
subsequent to an 11.0-percent drop in October. Flour prices also decreased less than they had a
month earlier. Prices for corn, cottonseed, and soybean cake and meal; beef and veal; and
packaged fluid milk and related products turned up in November. By contrast, the index for
formula feeds fell 9.3 percent after declining 5.8 percent in the previous month. Prices for
processed young chickens and natural cheese (except cottage cheese) turned down in November.
The refined sugar and byproducts index rose less than it had in October.

Crude goods

The decline in the Producer Price Index for Crude Materials for Further Processing
slowed to 12.5 percent in November from 18.6 percent in October. The indexes for crude
foodstuffs and feedstuffs and for crude energy materials decreased less than in the prior month.
Conversely, partially offsetting the slower rate of decline in crude material prices, the index for
crude nonfood materials less energy fell more than in October. (See table B.)

The index for crude foodstuffs and feedstuffs moved down 1.2 percent in November
following an 11.1-percent decrease in the preceding month. The decline in grains prices slowed
to 4.1 percent from 22.3 percent in October. Prices for hay, hayseeds, and oilseeds; fluid milk;
and slaughter cows and bulls also fell less than a month earlier. The index for slaughter steers
and heifers turned up in November after declining in the preceding month, and prices for Irish
potatoes for processing were unchanged after decreasing in October. By contrast, the index for
slaughter hogs dropped 15.8 percent after moving down 9.3 percent in the prior month. Prices
for slaughter chickens rose less in November than in the previous month. (See table 2.)

The decline in the index for crude energy materials slowed to 18.7 percent from 24.9
percent in October. The index for natural gas fell 10.9 percent after dropping 29.1 percent a
month earlier. Conversely, prices for crude petroleum decreased 30.2 percent in November after
moving down 26.0 percent in the previous month. The coal index turned down 0.5 percent after
rising 0.4 percent in October.

The index for crude nonfood materials less energy fell 20.4 percent subsequent to a 17.0-
percent decline in the previous month. The index for wastepaper dropped 57.1 percent in
November after decreasing 10.6 percent a month earlier. Prices for copper ores; carbon steel
scrap; raw cotton; copper base scrap; and logs, bolts, timber, and pulpwood also fell more than in
October. The index for gold ores turned down after rising in the prior month. By contrast, the
decline in the index for aluminum base scrap slowed to 17.6 percent in November from 22.0
percent a month earlier. Prices for soybeans turned up after falling in October.

Net output price indexes

Mining, Utilities, and Manufacturing Industries. The Producer Price Index for the Net Output
of Total Mining, Utilities, and Manufacturing Industries fell 4.0 percent in November after
declining 3.4 percent in October. (Net output price indexes are not seasonally adjusted.) Prices
received by manufacturers of automobiles, light trucks, and utility vehicles decreased 1.2 percent
in November after rising 7.6 percent a month earlier. The industry indexes for electric power
generation, poultry processing, and cheese manufacturing also turned down after increasing in
October. Prices received by petroleum refineries declined more in November than they had in
the prior month. By contrast, partially offsetting the faster rate of decline in the total mining,
utilities, and manufacturing industries index, prices received by natural gas distributors increased
0.8 percent in November following a 6.2-percent drop in the preceding month. The industry
indexes for electric power distribution, livestock slaughtering, and crude petroleum and natural
gas extraction fell less than they had in October. Prices received by fluid milk manufacturers
turned up in November. In November, the index for total mining, utilities, and manufacturing
industries was 108.1 (December 2006 = 100), 1.2 percent above its year-ago level.

Trade Industries. The Producer Price Index for the Net Output of Total Trade Industries
decreased 3.2 percent in November compared with a 2.8-percent rise in October. (Trade indexes
measure changes in margins received by wholesalers and retailers.) Margins received by
gasoline stations with convenience stores plummeted 53.4 percent in November after jumping
46.1 percent a month earlier. The margin indexes for merchant wholesalers of durable goods,
general merchandise stores, fuel dealers, and specialty food stores also turned down after
increasing in October. Margins received by merchant wholesalers of nondurable goods and by
pharmacies and drug stores rose less in November than they had in the preceding month. By
contrast, the rise in the margin index for grocery stores accelerated to 4.7 percent from 0.2
percent in the prior month. Margins received by office supplies and stationery stores and by
sporting goods stores turned up after declining in October. In November, the index for total
trade industries was 110.6 (December 2006 = 100), 6.0 percent above its year-ago level.

Transportation and Warehousing Industries. The Producer Price Index for the Net Output of
Total Transportation and Warehousing Industries declined 1.7 percent in November after falling
0.4 percent in October. Prices received by the industry for scheduled passenger air transportation
moved down 3.4 percent in November compared with a 2.1-percent increase in the previous
month. The indexes for both the inland water and deep sea freight transportation industries also
turned down after rising in October. The indexes for general freight trucking and for long
distance specialized freight trucking of new goods declined more in November than they had in
the preceding month. By contrast, prices received by couriers were unchanged after falling 3.1
percent in October. The industry indexes for freight transportation arrangement and local
specialized freight trucking of new goods decreased less in November than they had a month
earlier. In November, the index for total transportation and warehousing industries was 112.6
(December 2006 = 100), 5.7 percent above its year-ago level.

Traditional Service Industries. The Producer Price Index for the Net Output of Total
Traditional Service Industries inched up 0.1 percent in November following a 0.3-percent gain in
the previous month. Higher prices received by the industries for commercial banking, insurance
carriers, and software publishers outweighed lower prices for portfolio management, investment
banking and securities dealing, non-casino hotels and motels, lessors of nonresidential buildings,
savings institutions, and for general medical and surgical hospitals. In November, the index for
total traditional service industries was 102.7 (December 2006 = 100), 0.1 percent above its year-
ago level.

Source: Department of Labor, Bureau of Labor Statistics