June 1994 Producer Price Index

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The Producer Price Index for Finished Goods was unchanged seasonally adjusted from May to June, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. This followed decreases of 0.1 percent in May and April. The Intermediate Goods Price Index increased 0.3 percent in June after rising 0.2 percent a month earlier. Prices for crude goods rose 0.9 percent over the month after falling in both April and May. (See table A.)

Among finished goods in June, the index for consumer foods showed no change and the index for finished energy goods turned up 0.3 percent; both indexes had declined in May and April. Prices for finished goods other than foods and energy inched down 0.1 percent, the first decline for this index since last October.

Finished goods

During the first 6 months of 1994, the Finished Goods Price Index rose at a seasonally adjusted annual rate of 1.6 percent. These prices moved down at a 1.4 percent annual rate in the second half of 1993 and increased at a 1.9 percent rate in the first half of last year. The slight acceleration in the first half of this year was partly due to the index for energy goods, which advanced at a 6.0 percent annual rate from December 1993 to June 1994 after falling at an 11.6 percent annual rate from June to December 1993. In addition, prices for finished goods other than foods and energy increased at a 2.5 percent annual rate in the first half of 1994 after moving down at a 1.3 percent annual rate in the latter half of 1993; much of this acceleration was due to the index for motor vehicles. Consumer food prices, however, turned down at a 3.3 percent annual rate during the first 6 months of 1994 after increasing at a rate of 4.2 percent in the second half of 1993. The Intermediate Goods Price Index increased at a 2.0 percent annual rate after showing no change in the last half of 1993, and the Crude Goods Price Index rose at a 2.2 percent annual rate during the first half of the year after falling at a 3.4 percent annual rate over the last 6 months of 1993.

Before seasonal adjustment, the Producer Price Index for Finished Goods inched up 0.2 percent in June to 125.5 (1982=100). From June 1993 to June 1994, the Finished Goods Price index was unchanged. During this same period, consumer food prices rose 0.4 percent, finished energy goods fell 3.1 percent, and prices for finished goods other than foods and energy increased 0.6 percent. The Intermediate Goods Index moved up 1.1 percent during the 12 months ended in June 1994, and the Crude Goods Price Index was 0.6 percent lower than a year earlier.

Intermediate goods Crude goods Change in Change in intermediate crude Excluding goods from Excluding goods foods and 12 months ago Energy foods and from 12 months Month Foods Energy energy (unadj.) Foods (unadj.) energy ago (unadj.) 1993 June -1.0 0.6 0 1.1 -3.2 -0.5 0.1 2.1 July 2.4 -1.3 0.1 1.0 1.5 -7.3 0.7 -0.2 Aug. 0.6 -1.3 0.2 1.0 1.1 -1.9 -2.0 0 Sept. -0.4 0 0 0.9 0.5 1.2 0.1 -1.4 Oct. 0.6 0.1 0 1.0 -1.4 6.6 1.3 0.9 Nov. 1.1 -0.2 0.2 1.2 4.7 -6.3 1.1 0.4 Dec. 1.4 -3.5 0.2 1.0 1.0 -5.9 1.2 0.1

Finished goods

In June, the index for finished consumer foods was unchanged after falling 0.9 percent in May and 0.5 percent in April. Prices turned up after falling a month earlier for fresh and dry vegetables (32.0 vs. -6.1 percent), chicken eggs (8.2 vs. -15.1 percent), finfish and shell fish, and processed young chickens. Prices fell less than they did a month earlier for pork, beef and veal, and processed turkeys. Roast coffee prices rose much more rapidly than in the previous month. In contrast, prices for dairy products and milled rice fell more in June than in May, and prices turned down after rising a month earlier for fresh fruits and melons, processed fruits and vegetables, shortening and cooking oils, and pasta. Price increases slowed for soft drinks and bakery products.

The index for finished energy goods moved up 0.3 percent in June, after falling 1.0 percent in May and edging down 0.1 percent in April. The index for gasoline turned up 1.5 percent in June after moving down 2.8 percent in May. Prices for residential natural gas fell 1.3 percent after falling 1.5 percent in the previous month. Prices for residential electric power fell somewhat more than a month earlier. Prices continued to rise for home heating oil.

Prices for consumer goods other than foods and energy inched down 0.1 percent in June after rising 0.4 percent in May. From December 1993 to June 1994, this index rose at a 1.8 percent seasonally adjusted annual rate; this followed a decrease at a 2.6 percent rate in the latter half of 1993. The tobacco products index was a leading contributor to the small June downturn; tobacco products fell 2.7 percent after rising 1.9 percent a month earlier. Prices also turned down after rising a month earlier for women's and girls' apparel, cosmetics and other toilet preparations, and leather footwear. Price increases slowed for passenger cars, light trucks, prescription drugs, periodicals, and floor coverings. Prices fell more than they did a month earlier for over the counter drugs. In contrast, price increases accelerated for sanitary papers, household furniture, and newspapers. Prices turned up after falling a month earlier for home electronic equipment and mobile homes. Price declines slowed somewhat for alcoholic beverages, sporting goods, and household flatware.

The capital equipment index inched up 0.1 percent in June after rising 0.4 percent in both May and April. This index rose at a 4.0 percent annual rate in the first half of 1994, compared with a 1.2 percent rate of advance in the latter half of 1993. In June, price increases slowed markedly for motor vehicles; prices for commercial furniture were unchanged after rising a month earlier.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 0.3 percent seasonally adjusted in June after rising 0.2 percent in May. Indexes for construction materials and for materials for durable manufacturing rose more than in May, and prices for energy goods fell less in June than in the prior month. The foods and feeds index fell more than in May, however. (See table B.)

Prices for construction materials rose 1.0 percent in June after moving up 0.2 percent in May. This index advanced at a 1.6 percent annual rate in the first half of 1994 after climbing at a 6.0 percent rate in the final half of 1993. Softwood lumber prices increased 7.3 percent in June following a 2.6 percent decline in the previous month. Indexes for gypsum products and for millwork also turned up after falling in May, while prices for plywood and for plumbing fixtures and brass fittings rose more in June than the month before. In contrast, indexes for fabricated structural metal products, nonferrous wire and cable, and heating equipment rose less than in May, while prices for air conditioning and refrigeration equipment edged down slightly in June following a modest advance in the prior month.

In June, prices for durable manufacturing materials climbed 1.4 percent following a 0.9 percent increase in May. This index rose at a 6.6 percent rate during the first 6 months of 1994 after advancing at a 3.1 percent rate from June 1993 to December 1993. Plywood prices increased 4.8 percent in June after a 2.0 percent gain in May. Prices for domestic copper cathode and hardwood lumber also rose more in June than in the previous month, and the building paper and building board index rose after declining in May. The indexes for hot rolled steel sheet and strip, hot rolled steel bars, and aluminum ingot turned down in June, however, and flat glass prices rose much less than in May.

The Producer Price Index for intermediate energy goods fell 0.2 percent in June following a 0.5 percent decline in May. Prices for items in this category increased at a 2.2 percent rate during the first 6 months of 1994 after dropping at an 11.7 percent rate during the last 6 months of 1993. Gasoline prices climbed 1.5 percent in June after falling 2.8 percent in the prior month. Prices for liquefied petroleum gas also turned up after declining in May, and indexes for industrial and commercial electric power fell less in June than in the previous month. Residual fuel prices rose much more than in May. In contrast, indexes for industrial natural gas, natural gas to electric utilities, and miscellaneous petroleum and coal products fell in June after rising in May. Commercial natural gas prices fell more than in May.

Food and feed prices fell 1.4 percent in June following a May drop of 0.9 percent. From December 1993 to June 1994, this index declined at a 3.4 percent annual rate after climbing at a 12.1 percent rate in the latter half of 1993. Flour prices dropped 3.1 percent in June following a 2.0 percent May advance. Indexes for fluid milk products and for crude vegetable oils also turned down in June, while the natural and processed cheese index dropped more than in May. Indexes for prepared animal feeds and for confectionery materials climbed after falling in May, however, and prices for pork and for beef and veal fell less in June than in the previous month.

The index for materials for nondurable manufacturing increased 0.7 percent for the second consecutive month. This index advanced at a 5.1 percent rate during the first 6 months of 1994 following a 2.6 percent rate of decline in the second half of 1993. Prices for paperboard, finished fabrics, and miscellaneous inorganic chemicals fell in June. In contrast, indexes for plastic resins and materials and miscellaneous primary basic organic chemicals rose in June.

Crude goods

The Producer Price Index for Crude Materials for Further Processing moved up 0.9 percent in June seasonally adjusted following a decline of 1.4 percent in the preceding month. The June upturn was broad based; indexes for crude foodstuffs and feedstuffs fell much less than in May, prices for crude energy materials rose more than in the prior month, and the basic industrial materials index rose after falling a month earlier. (See table B.)

The decline in the crude foodstuffs and feedstuffs index slowed to 1.2 percent in June from 3.4 percent in the preceding month. From December 1993 to June 1994, this index moved down at a seasonally adjusted annual rate of 13.1 percent following an increase of 15.7 percent in the second half of 1993. The corn index turned up 6.5 percent in June after falling 3.5 percent a month earlier. Indexes for fresh and dry vegetables, slaughter broilers, and unprocessed finfish also rose after falling a month earlier. In addition, prices for slaughter cattle and slaughter hogs fell less than in the prior month. The wheat index, however, turned down 5.5 percent after rising 3.9 percent in May. Prices for hay and fluid milk fell more than in the previous month.

The crude energy materials index moved up 3.3 percent after rising 1.0 percent in May. These prices rose at an annual rate of 18.2 percent during the first half of the year after falling at a 25.1 percent rate during the final 6 months of last year. The natural gas to pipelines index moved up 1.0 percent in June after declining 9.3 percent in May. Conversely, the rise in the crude petroleum index slowed to 8.0 percent from 14.8 percent in May. In addition, the index for coal decreased 0.9 percent after rising 0.6 percent a month earlier.

The crude nonfood materials less energy index moved up 0.7 percent after decreasing 1.1 percent in May. This index climbed at a seasonally adjusted annual rate of 9.6 percent in the first half of the year, almost twice as much as its rate of advance in the previous 6 months. The rise in the wastepaper index accelerated to 33.9 percent in June, far more than its increase of 11.8 percent a month earlier. Indexes for copper ores, aluminum base scrap, and copper base scrap also rose considerably more than they did in May. Prices for softwood logs, bolts, and timber fell less than a month earlier. In addition, the other roundwood products index turned up after declining last month. By contrast, iron and steel scrap prices fell 8.2 percent after declining 5.7 percent a month ago, and the raw cotton index rose less than in the previous month.

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

Mining. The Producer Price Index for the net output of total domestic mining industries turned up 2.6 percent in June following declines in both in both April and May. (Net output price indexes are not seasonally adjusted.) During the first half of 1994, this index rose at an annual rate of 8.4 percent after falling at an 18.4 percent rate in the last half of 1993. In June, the index for the oil and gas extraction group index advanced 3.3 percent after 2 months of decline. In addition, price increases accelerated for the metal mining industry group. In June, the Producer Price Index for total mining stood at 75.9 (December 1984=100), down 5.7 percent from June 1993.

Manufacturing. The Producer Price Index for the domestic manufacturing sector inched up 0.1 percent in June after increasing 0.2 percent in both April and May. From December 1993 to June 1994, this index increased at a 2.9 percent annual rate after declining at a 1.2 percent annual in the latter half of 1993. In June, price increases for the petroleum refining industry group slowed from 2.4 percent in May to 1.4 percent. Increases also were recorded in June for the industry groups for primary metal industries, nonmetallic mineral products, and for lumber and wood products. Prices for the transportation industry group inched down after rising a month earlier, and price increases slowed for the furniture and fixtures industry group. The index for the domestic manufacturing industry sector stood at 120.5 (December 1984=100) in June, 0.8 percent higher than a year earlier.

Other. Prices turned up after falling a month earlier for tour operators, water transportation of freight, n.e.c., and for crude petroleum pipe lines. Price increases accelerated for waste paper collection (from 7.5 percent in May to 25.5 percent), nonferrous metal scrap collection, electric power utilities, and scheduled air passenger transportation. Prices fell less in June than in May for scheduled air cargo transportation. By contrast, prices turned down in June after rising in May for natural gas utilities, travel agencies, and radio broadcasting. Price increases slowed for truck rental and leasing, deep sea domestic transportation of freight, and other specialty hospitals. Price fell more in June than in May for passenger car rental and ferrous metal scrap collection.

Information in this news release will be made available to sensory impaired individuals upon request. Voice phone: 202-606-7828; TDD phone 202-606- 5897; TDD Message Referral phone number: 1-800-326-2577. Table 1. Producer Price Indexes and percent changes by stage of processing (1982=100)

1/ Comprehensive relative importance figures are computed 6/ Percent of total finished goods. once each year in December. 7/ Percent of total intermediate materials. 2/ Data for Feb. 1994 have been revised to reflect the availability 8/ Formerly titled "Crude materials for of late reports and corrections by respondents. All data are subject further processing, excluding crude to revision 4 months after original publication. foodstuffs and feedstuffs, plant and 3/ Not seasonally adjusted. animal fibers, oilseeds, and leaf tobacco." 4/ Includes crude petroleum. 9/ Percent of total crude materials. 5/ Excludes crude petroleum. Table 2. Producer Price Indexes and percent changes for selected commodity groupings by stage of processing (1982=100 unless otherwise indicated)

See footnotes at end of table. Table 2. Producer Price Indexes and percent changes for selected commodity groupings by stage of processing - Continued (1982=100 unless otherwise indicated)

1/ Data for February 1994 have been revised to reflect 2/ Not seasonally adjusted. the availability of late reports and corrections by respondents. 3/ Not available. All data are subject to revision 4 months after original publication.

1/ Data for Feb. 1994 have been revised to reflect the availability of late reports and corrections by respondents. All data are subject to revision 4 months after original publication.

2/ Prices of some items in this grouping are lagged 1 month.

Table #4 Producer price indexes for the net output of major industry groups