February 1994 Producer Price Index

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The Producer Price Index for Finished Goods moved up 0.5 percent seasonally adjusted from January to February, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This followed a 0.2 percent increase in January and a dip of 0.1 percent in December. The Intermediate Goods Price Index advanced 0.4 percent in February after rising 0.2 percent in the preceding month. Prices received by domestic producers of crude goods, however, decreased 1.3 percent after climbing by the same amount in January. (See table A.)

The increase in the Finished Goods Price Index was almost entirely due to sharply higher prices for energy. Finished consumer food prices declined about as much as in the previous month. The index for finished goods other than foods and energy edged up 0.1 percent over the month after increasing 0.4 percent in January.

The advance in the Intermediate Goods Price Index was also dominated by higher energy prices; in contrast, the decline in the Crude Goods Price Index reflected a broad drop in prices for energy materials. Prices for intermediate goods other than foods and energy showed no change, but the crude nonfood materials other than energy index continued to climb rapidly. (See table B.)

Before seasonal adjustment, the Producer Price Index for Finished Goods rose 0.3 percent in February to 124.8 (1982=100). From February 1993 to February 1994, the Finished Goods Price Index edged up 0.2 percent. During this same period, prices for consumer foods advanced 1.8 percent, the index for finished energy goods declined 2.6 percent, and finished goods other than foods and energy increased 0.4 percent. The index for intermediate materials, supplies, and components rose 0.9 percent during the 12 months ended in February 1994, and the Crude Goods Price Index was down 0.5 percent over the year.

Finished goods

The Producer Price Index for finished energy goods climbed 2.8 percent in February on a seasonally adjusted basis following a 0.8 percent increase a month earlier and a 2.6 percent drop in December. The acceleration was led by the home heating oil index, which advanced 23.5 percent after falling 1.2 percent in January. The residential gas index also turned up after declining in the previous month. Gasoline prices rose more than 6 percent for the second consecutive month.

Prices for finished consumer foods moved down 0.4 percent over the month after a January decline of 0.3 percent. The February decrease was dominated by a 25 percent slump in the fresh and dry vegetables index. Lower prices were also registered for fish, roasted coffee, frozen juices, and beef and veal. By contrast, increases were recorded for pork, chicken eggs, mayonnaise, cheese, canned vegetables, fresh fruits, and processed chickens.

The index for consumer goods other than foods and energy moved up 0.2 percent in February in the wake of a 0.3 percent rise in the prior month. Prices for passenger cars, tobacco products, and periodical circulation increased much less than in January, and indexes for newspaper circulation rates and sanitary papers turned down after showing little or no change a month earlier. By contrast, household furniture prices climbed 1.8 percent after inching up slightly in December and January. In addition, indexes for apparel, alcoholic beverages, and soaps and detergents turned up following January declines, and book prices increased much more than they did in the previous month.

After advancing 0.6 percent in January, the capital equipment index slowed to a 0.1 percent rise in February. The deceleration was principally due to the motor vehicles index, which was unchanged following a climb of 1.3 percent in January. In addition, prices turned down after rising considerably a month before for civilian aircraft, construction machinery, and electronic computers. The ships index, however, rose substantially, and the transformers index turned up after a sizable drop in the previous month.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components rose 0.4 percent seasonally adjusted after a January advance of 0.2 percent. The index for energy goods advanced much more than in January, and prices for foods and feeds and for durable manufacturing materials also increased more than in the previous month. The index for construction materials turned down, however. (See table B.)

The index for intermediate energy goods climbed 3.1 percent in February after edging up 0.1 percent a month earlier. Prices for diesel fuel rose 18.1 percent after declining 3.4 percent in January. Indexes for jet fuels, industrial electric power, and residual fuel also turned up in February, and prices for liquefied petroleum gas rose much more than in January. Indexes for natural gas to electric utilities, commercial electric power, and commercial natural gas rose considerably less than they had a month earlier, however.

Prices for intermediate foods and feeds advanced 0.8 percent in February following an increase of 0.2 percent in the prior month. After edging up 0.1 percent in January, the prepared animal feeds index climbed 2.6 percent. Indexes for pork and cheese also rose more than a month earlier, while prices for flour and for beef and veal fell considerably less than in January. In contrast, indexes for crude vegetable oils, confectionery materials, and liquid milk products fell in February following January advances. Prices for dry milk products rose less in February than a month earlier.

Prices for durable manufacturing materials rose 0.4 percent after moving up 0.2 percent in the prior month. The hot rolled steel sheet and strip index advanced 1.3 percent following a 1.1 percent decline in January. Primary aluminum prices turned up sharply in February, and indexes for aluminum mill shapes, copper cathode, and hot rolled steel bars advanced much more than in January. Conversely, indexes for plywood, cold finished steel bars, and building paper and board turned down after rising in January.

The Producer Price Index for construction materials dropped 0.2 percent in February after a 0.4 percent January advance. Softwood lumber prices fell 6.9 percent after increasing 0.7 percent in January. Indexes for plywood, millwork, and plastic construction materials also turned down in February. In contrast, prices for nonferrous wire and cable and for gypsum products rose far more than they did a month earlier, and the heating equipment index turned up after falling in January.

The nondurable manufacturing index declined 0.2 percent for the second consecutive month. Prices for miscellaneous basic organic chemicals, paint materials, paper, and finished fabrics fell. Indexes for alkalies and chlorine, processed yarns and threads, woodpulp, and nitrogenates advanced, however.

Crude goods

The Producer Price Index for Crude Materials for Further Processing turned down 1.3 percent in February seasonally adjusted following a rise of the same amount in the preceding month. The downturn was due to the index for crude energy materials, which dropped substantially after a sharp climb in January. In contrast, the crude foodstuffs and feedstuffs index turned up after falling in the prior month, and the basic industrial materials index rose somewhat more than it did a month earlier. (See table B.)

The crude energy materials index turned down 6.4 percent following a rise of 3.8 percent in January. This downturn was broadly based. The natural gas to pipelines index declined 10.4 percent after rising 7.2 percent in the preceding month. The crude petroleum index fell 3.8 percent after increasing 0.5 percent a month earlier. The coal index dropped 1.5 percent, about as much as it had advanced in January.

The crude foodstuffs and feedstuffs index turned up 1.2 percent in February after decreasing 0.9 percent in the prior month. The slaughter broilers index turned up 11.8 percent in February, more than offsetting its January drop of about 10 percent. Indexes for slaughter cattle, Louisiana rough rice, hay, slaughter turkeys, wheat, fresh fruits and melons, and for unprocessed shellfish also turned up after January declines. Indexes for corn and finfish, however, turned down after rising in January, and prices for fresh and dry vegetables fell much more than in the previous month. In addition, indexes for fluid milk, slaughter hogs, and soybeans rose less than in January.

The crude nonfood materials less energy index moved up 2.0 percent after increasing 1.6 percent in January. This acceleration was led by the iron and steel scrap index, which turned up in February following a decrease in the previous month. The wastepaper index also advanced after decreasing in January. In addition, indexes for aluminum base scrap, copper ores, raw cotton, and leaf tobacco rose more than they did a month earlier. Conversely, the rise in the softwood logs, bolts, and timber index slowed to 1.2 percent, less than half as much as a month earlier. The pulpwood logs index edged down slightly after a January rise, and the cattle hides index fell more than it had a month before.

Net output price indexes for mining, manufacturing, and other industries

Mining. The Producer Price Index for the net output of total domestic mining industries fell 5.4 percent in February following a 3.6 percent increase in January. (Net output price indexes are not seasonally adjusted.) In February, prices for the oil and gas extraction industry group turned down 7.6 percent after rising 4.8 percent a month earlier. Prices for the bituminous coal and lignite mining industry also dropped after advancing in the previous month. By contrast, the metal mining industry group index moved up 3.3 percent after a 1.4 percent increase a month earlier. The index for the nonmetallic minerals mining industry turned up after dipping slightly in the previous month. In February, the Producer Price Index for total mining industries stood at 70.1 (December 1984=100), 8.0 percent lower than a year earlier.

Manufacturing. The Producer Price Index for total domestic manufacturing industries increased 0.5 percent in February after a 0.3 percent rise in January. Prices for the petroleum refining industry group turned up 5.6 percent in February following 3 months of decline. In addition, prices rose more than in January for the industry groups for primary metal industries and furniture and fixtures. By contrast, prices turned down after rising a month earlier for the industry groups for lumber and wood products, tobacco manufactures, and leather products. Prices rose less than in January for the printing and publishing and the transportation equipment industry groups. The index for the net output of the domestic manufacturing sector stood at 119.8 in February (December 1984=100), 0.8 percent higher than its level of a year earlier.

Other. Among other industries, prices turned up after falling a month earlier for radio broadcasting, airports and airport services, and for travel agencies. In addition, prices advanced after showing no change in January for crude petroleum pipelines, freight transportation on the Great Lakes-St. Lawrence Seaway, wastepaper collection, and air courier services. Price increases accelerated for truck rental and leasing. By contrast, prices turned down after rising a month earlier for passenger car rental, scheduled air transportation, deep sea domestic transportation of freight, and for general warehousing and storage. Prices were unchanged in February after advancing in January for tour operators. Price increases slowed for hotels and motels, metal scrap collection, and for offices and clinics of doctors of medicine.

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