August 1994 Producer Price Index

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The Producer Price Index for Finished Goods increased 0.6 percent seasonally adjusted from July to August, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. The Finished Goods Price Index moved up 0.5 percent in July and showed no change in June. Prices received by domestic producers of intermediate goods rose 0.7 percent over the month following a 0.5 percent advance in July. Crude material prices declined 0.4 percent after falling 0.9 percent in the previous month. (See table A.)

The index for finished goods other than foods and energy moved up 0.4 percent, faster than in July. Consumer food prices also moved up more than in the previous month. Prices for finished energy goods continued to rise, although not as much as in July.

Change in Except finished Inter- goods foods from 12 mediateCrude and months Month Total Foods Energy energy ago goods goods (unadj.) 1993 Aug. -0.8 0.3 -1.0 -1.1 0.5 0 -0.7 Sept. 0.2 0.6 -0.1 0.1 0.4 0 0.7 Oct. -0.1 -0.2 0.8 -0.3 0.2 0.1 2.2 Nov. 0.1 0.8 -2.1 0.4 0.4 0.2 -0.3 Dec. -0.1 0.6 -2.9 0.1 0.2 -0.3 -1.5

availability of late reports and corrections by respondents.

Before seasonal adjustment, the Producer Price Index for Finished Goods moved up 0.5 percent in August to 126.6 (1982=100). From August 1993 to August 1994, the Finished Goods Price Index increased 1.9 percent. During this same period, consumer food prices rose 1.4 percent, the energy goods index advanced 2.8 percent, and prices for finished goods other than foods and energy were up 1.9 percent. The Intermediate Goods Price Index moved up 2.4 percent during the 12 months ended in August 1994, and prices for crude goods were 0.8 percent higher than a year before.

Finished goods

The index for consumer goods other than foods and energy moved up 0.4 percent in August after showing no change in July. Prices turned up after falling a month earlier for cosmetics, sanitary papers and health products, tobacco products, prescription drugs, alcoholic beverages and light trucks. Prices for women's apparel and over-the-counter drugs moved up after showing little or no change a month earlier. Prices for passenger cars rose 0.7 percent, the same as in July. (Before seasonal adjustment, the passenger car index inched down 0.1 percent in August.) By contrast, prices turned down after rising a month earlier for tires and tubes and floor coverings. Price increases for newspaper circulation slowed from 2.4 percent in the previous month to 0.6 percent in August. Prices for household flatware were unchanged in August after moving up 2.5 percent in the preceding month.

The Producer Price Index for finished consumer foods moved up 0.7 percent seasonally adjusted in August after rising 0.5 percent a month earlier. Prices turned up markedly after falling in the previous month for beef and veal (6.9 vs. -2.0 percent), dairy products, pork, and eggs for fresh use. Price declines slowed for shortening and cooking oils and for milled rice. Prices rose more rapidly than in the preceding month for finfish and shellfish. By contrast, prices for roasted coffee moved up 12.0 percent after rising nearly 43 percent in July. Prices turned down after increasing in July for soft drinks, fresh fruits and melons, bakery products, and pasta. Prices for young chickens fell 3.2 percent after falling 1.4 percent in the previous month, and prices for turkeys were almost unchanged after increasing 2.8 percent in July.

Prices for finished energy goods advanced 1.7 percent in August following a 2.5 percent increase in the preceding month. Prices for home heating oil were unchanged after rising 6.4 percent in July. Prices for residential gas turned down 0.7 percent following a 0.9 percent increase a month earlier. Price increases slowed for gasoline (from 8.0 percent in July to 6.8 percent in August) and residential electric power.

The capital equipment index inched up 0.1 percent for the third consecutive month. Increases for motor vehicles, pumps and compressors, and railroad equipment outweighed declines for office and store machines, metal cutting machine tools, and electronic computers.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components rose 0.7 percent in August after increasing 0.5 percent in July. Prices for foods and feeds turned up after 5 consecutive months of decline. Indexes for nondurable and durable manufacturing materials as well as for energy goods rose more than in the prior month. Prices for construction materials rose the same amount as in the month before. (See table B.)

In August, the index for intermediate foods and feeds advanced 0.4 percent after declining 2.0 percent in July. Prices turned up after falling in July for meats, condensed and evaporated milk, and flour. Indexes for prepared animal feeds, confectionery materials, fluid milk products, crude vegetable oils, and for natural and processed cheese declined less than in the previous month. In contrast, prices for malt and malt byproducts were unchanged after increasing a month earlier.

Prices for nondurable manufacturing materials registered a 1.4 percent advance in August following July's increase of 0.9 percent. Indexes for primary and miscellaneous basic organic chemicals, plastic resins and materials, woodpulp, alkalies and chlorine, and synthetic fibers advanced more than in July. In addition, gray fabric prices turned up after falling a month earlier. Prices for paper and intermediate basic organic chemicals, however, rose less than in July.

The index for intermediate energy goods moved up 2.2 percent in August after a July increase of 1.7 percent. The rise in commercial electric power prices accelerated to 1.6 percent from 0.1 percent in July. Indexes for residual fuel and industrial electric power also rose more than a month earlier. In addition, prices for natural gas to electric utilities turned up after falling in July. In contrast, the index for diesel fuel decreased 0.2 percent after increasing 7.3 percent in the previous month. Prices for miscellaneous petroleum and coal products also turned down after rising a month earlier. In addition, indexes for jet fuel and gasoline rose less than in the prior month.

The Producer Price Index for durable manufacturing materials rose 0.7 percent after increasing 0.6 percent a month earlier. Prices advanced for hot rolled steel sheet and strip, plywood, aluminum, and for building paper and board. Conversely, indexes for copper and brass mill shapes, silver, gold, and zinc declined in August.

The index for construction materials moved up 0.3 percent in August, the same as the month before. Increases for softwood lumber, plywood, plastic construction products, asphalt felts and coatings, concrete products, and switchgear outweighed declines for nonferrous wire and cable, plumbing fixtures and brass fittings, and for air conditioning and refrigeration equipment.

Crude goods

The Producer Price Index for Crude Materials for Further Processing moved down 0.4 percent in August after falling 0.9 percent in July. Indexes for crude energy materials and for crude foodstuffs and feedstuffs fell less than in July. In contrast, the basic industrial materials index advanced less than it had a month before. (See table B.)

The decline in the crude energy materials index slowed to 0.1 percent in August from 1.3 percent a month earlier. The natural gas to pipelines index turned up 3.0 percent after dropping 9.7 percent in July, and coal prices rose somewhat faster than in the previous month. Crude petroleum prices, however, turned down 3.4 percent after increasing in each of the previous 5 months.

The crude foodstuffs and feedstuffs index moved down 1.4 percent after declining 2.1 percent in July. The smaller July decrease was partly due to the corn index, which was unchanged after dropping 14 percent in July. Indexes for slaughter broilers, soybeans, and Irish potatoes for processing fell less than in July. In addition, prices for slaughter hogs, slaughter turkeys, and unprocessed shellfish rose more in August than the month before. By contrast, the rise in the slaughter cattle index slowed to 1.1 percent from 6.4 percent in the prior month. Prices for fresh vegetables except potatoes turned down after rising in July, and the fluid milk index fell more than a month earlier.

The index for crude nonfood materials less energy moved up 1.4 percent in August following an increase of 2.0 percent in July. Price increases for wastepaper slowed to 1.4 percent from over 36 percent in July and nearly 34 percent in June. Indexes for aluminum base scrap, copper ores, gold ores, and copper base scrap turned down after rising in the previous month. The raw cotton index, however, turned up 3.8 percent after dropping almost 12 percent in July. Prices for iron and steel scrap rose more than a month earlier, and the softwood logs, bolts, and timber index fell less than in July.

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

Mining. The Producer Price Index for the net output of the domestic mining sector moved up 0.3 percent in August after falling 2.2 percent in the preceding month. (Net output price indexes are not seasonally adjusted.) The oil and gas extraction industry group index turned up 0.4 percent following a 3.6 percent decline in July. Price increases accelerated for the industry group for bituminous coal and lignite mining. By contrast, the metal mining industry group index turned down 0.8 percent in August after rising 5.1 percent in July, and the index for the nonmetallic minerals mining group fell much more than in the previous month.

Manufacturing. Prices received by producers for the net output of the domestic manufacturing sector rose 0.6 percent in August after moving up 0.2 percent in July. Prices for the petroleum refining industry group increased 5.8 percent in August after rising 4.4 percent in the previous month. Price increases also accelerated for the industry groups for chemicals and allied products and for paper and allied products. Prices turned up after falling a month earlier for the industry groups for lumber and wood products and for food and kindred products. Prices continued to climb for the industry groups for primary metal industries and for rubber and plastic products.

Other. After rising over 25 percent in July, the index for wastepaper collection moved up 1.0 percent in August. Prices turned up after falling a month earlier for scheduled air transportation. Prices for ferrous metal scrap collection rose faster in August (8.8 percent) than in July (2.1 percent). Price declines slowed for airports and airport services. The index for general medical and surgical hospitals increased 0.6 percent for the second consecutive month. By contrast, price increases for the passenger car rental index slowed markedly from July (8.8 percent) to August (0.9 percent). Price increases also slowed for nonferrous metal scrap collection and radio broadcasting. The index for crude petroleum pipelines was unchanged after moving up 1.7 percent in July. Prices turned down in August after increasing in the preceding month for hotels and motels, as well as for cable and other pay television services.

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