November 1994 Producer Price Index

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The Producer Price Index for finished goods increased 0.5 percent in November, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. This increase followed declines of 0.5 percent in both September and October. Prices received by domestic producers of intermediate goods advanced 1.1 percent, the largest monthly increase since October 1990 when it rose 1.4 percent. Crude material prices climbed 1.0 percent, after falling in each of the 4 previous months. (See table A.)

Among finished goods, the index for finished energy goods rose 2.1 percent in November and the index for finished consumer foods turned up 0.2 percent. Both indexes had declined in each of the prior 2 months. The index for finished goods less foods and energy inched up 0.1 percent after decreasing 0.5 percent in October.

Change in Except finished Inter- goods foods from 12 mediateCrude and months Month Total Foods Energy energy ago goods goods (unadj.) 1993 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

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.2 percent in November to 126.1 (1982=100). From November 1993 to November 1994, this index advanced 1.3 percent. Over this same period, consumer food prices moved up 0.2 percent, the index for finished energy goods rose 2.1 percent, and prices for finished goods other than foods and energy advanced 1.6 percent. The Intermediate Goods index increased 3.9 percent during the 12 months ended November 1994, and crude material prices were 2.7 percent lower than a year earlier.

Finished goods

Prices for finished energy goods advanced 2.1 percent in November after a 2.9 percent decline in September and a 1.2 percent decrease in October. Prices for gasoline turned up 4.5 percent in November after falling 5.8 percent in October. Price declines slowed markedly for residential natural gas and home heating oil. Prices continued to rise rapidly for residential electricity.

Prices for finished consumer foods turned up 0.2 percent in November, after moving down as much in both September and October. Prices increased after falling a month earlier for beef and veal, eggs for fresh use, finfish and shellfish, and dairy products. Price declines slowed significantly for pork, fresh fruits and melons, and milled rice. Prices for bakery products rose after showing no change in the previous month while prices for shortening and cooking oils rose more rapidly. By contrast, prices turned down in November, after rising a month earlier, for fresh and dry vegetables, young processed chickens, confectionery end products, pasta, and processed turkeys. Soft drink prices were unchanged after moving up in October. Price increases slowed markedly for roasted coffee.

Prices for finished consumer goods other than foods and energy moved up 0.2 percent in November following a 0.3-percent decline in October. In November, passenger car prices increased 1.0 percent (-0.1 percent before seasonal adjustment) after declining 2.6 percent in October. Prices also turned up after falling in the previous month for prescription drugs, mobile homes, toys, newspaper circulation, and sporting goods. Price declines slowed for light trucks. Price increases for books accelerated. By contrast, prices turned down after rising in the previous month for cosmetics, tobacco products, women's apparel, sanitary papers, and alcoholic beverages. Price increases slowed for household glassware, over- the-counter drugs, footwear, and for lawn and garden equipment. Prices fell more in November than in October for girls' apparel.

In November, the capital equipment index inched up 0.1 percent, after declining 1.0 percent in October. Prices for communication equipment moved up after decreasing in October. Prices turned up after falling in the previous month for commercial furniture, metal cutting machine tools, and x- ray equipment. Price increases accelerated for truck trailers, pumps and compressors, and for construction machinery. Prices for motor trucks fell substantially less than they had in October. By contrast, prices fell more in November than in October for electronic computers. In addition, prices turned down after increasing a month earlier for agricultural machinery, transformers, and oil field machinery. Price increases slowed for civilian aircraft, tools and dies, railroad equipment, mining machinery, and metal forming machine tools.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 1.1 percent seasonally adjusted in November, after rising 0.3 percent in October. When food and energy prices are excluded, this index increased 0.9 percent in November, following a 0.7 percent advance in October. Prices for intermediate energy materials as well as foods and feeds turned up after falling in October. Prices for both manufacturing and construction materials continued their upward trend. (See table B.)

The index for intermediate energy goods turned up 2.8 percent in November after falling 1.7 percent in October. The gasoline index rose 4.5 percent in November after declining 5.8 percent a month earlier. In addition, prices for diesel fuel, industrial electric power, liquefied petroleum gas, jet fuels, and natural gas to electric utilities all turned up after falling in October. In addition, the commercial electric power index rose more than in the previous month. In contrast, prices for coke oven products turned down 0.5 percent after rising 2.3 percent a month earlier, and the index for liquid asphalt rose less than a month ago.

The index for durable manufacturing materials moved up 1.7 percent in November after an October increase of 1.0 percent. The copper and brass mill shapes index increased 8.5 percent after rising 1.7 percent a month earlier. Indexes for aluminum mill shapes, plywood, hot rolled steel sheet and strip, and for building paper and board also rose more than in October. In addition, prices for aluminum, copper, and hot rolled steel bars turned up after falling in the previous month. In contrast, the index for cold rolled steel sheets declined 0.5 percent after an increase of about the same amount a month earlier.

Following a 1.0 percent October decline, prices for intermediate foods and feeds registered a 0.3 percent advance in November, led by the index for beef and veal which turned up 2.5 percent after falling 2.2 percent a month earlier. Prices for confectionery materials, fluid milk products, and for condensed and evaporated milk also turned up after falling in October. In addition, the index for crude vegetable oils rose more than in the previous month, and pork prices fell less than a month earlier. The decline in the prepared animal feeds index, however, accelerated to 2.6 percent from 0.4 percent in October. In addition, flour prices turned down after rising a month earlier.

The index for materials and components for construction increased 0.9 percent after rising 0.7 percent a month earlier. The increase in prices for nonferrous wire and cable accelerated to 3.0 percent from 0.3 percent in October. Indexes for plywood, fabricated structural metal products, softwood lumber, concrete products, non-fluid power metal valves, and wiring devices also rose more than a month ago. In addition, prices for asphalt felts and coatings remained unchanged after falling in October. Conversely, prices for gypsum products turned down 2.0 percent after increasing 3.1 percent a month earlier, and the plastic construction products index rose less than in the prior month.

The rise in the Producer Price Index for nondurable manufacturing materials slowed to 0.8 percent in November from 1.5 percent the month before. The index for intermediate basic organic chemicals turned down 0.2 percent after rising 6.1 percent in October. Prices for woodpulp and phosphates also declined after increasing in the prior month. Indexes for plastic resins and materials, alkalies and chlorine, synthetic rubber, and miscellaneous basic organic chemicals rose less than in October. The index for gray fabrics, however, turned up 0.4 percent after declining 0.5 percent a month earlier, and paperboard prices rose more than in October.

Crude goods

The Producer Price Index for Crude Materials for Further Processing moved up 1.0 percent in November after falling 0.6 percent in October. The index for crude foodstuffs and feedstuffs turned up after falling a month earlier, and the basic industrial materials index rose more than in October. In contrast, the crude energy materials index fell after remaining unchanged in the prior month. (See table B.)

The index for crude foodstuffs and feedstuffs turned up 1.5 percent in November after declining in 7 of the last 8 months. The slaughter cattle index rose 6.5 percent after dropping 3.1 percent in October. Prices for corn, soybeans, and unprocessed finfish also turned up after falling a month earlier. By contrast, the slaughter broilers index turned down 10.3 percent after increasing over 5 percent in each of the pervious 2 months. Prices for fresh vegetables except potatoes, fluid milk, and hay also moved down after rising in October.

The crude nonfood materials less energy index moved up 3.4 percent after rising 0.9 percent in October. The raw cotton index turned up 8.4 percent after declining 9.1 percent a month ago. Prices for wastepaper and softwood logs, bolts, and timber also turned up after falling in October. In addition, indexes for iron and steel scrap and nonferrous scrap rose more than a month earlier. In contrast, indexes for both cattle hides and for construction sand and gravel turned down after rising in October.

The crude energy materials index fell 1.0 percent in November after remaining unchanged in October. The crude petroleum index turned down 0.6 percent following an increase of 2.5 percent in October. Prices for natural gas to pipelines fell more than in the previous month. The rise in the coal index, however, accelerated to 2.3 percent from 0.9 percent in October.

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

Mining. The Producer Price Index for the net output of the domestic mining sector declined 0.8 percent in November after falling 3.0 percent in September and 0.3 percent in October. (Net output price indexes are not seasonally adjusted.) Price declines for the oil and gas extraction industry group accelerated from -0.9 percent in October to -2.0 percent in November. Prices for the nonmetallic mining industry group turned down after rising in each of the 2 previous months. However, prices rose more rapidly than in the previous month for the metal mining and the bituminous coal and lignite mining industry groups. In November, the Producer Price Index for total mining stood at 71.4 (December 1984=100), 4.5 percent lower than a year earlier.

Manufacturing. Prices received by producers for the net output of the domestic manufacturing sector moved up 0.4 percent in November after rising 0.3 percent in October. Increases were registered for the following industry groups: petroleum refining; paper and allied products; primary metal industries; lumber and wood products; rubber and plastic products; chemicals and allied products, fabricated metal products; and printing and publishing. By contrast indexes for both the transportation and the apparel industry groups inched down. The index for the net output of the domestic manufacturing sector stood at 121.9 in November (December 1984=100), 2.2 percent higher than a year earlier.

Other. Among other industries, price increases accelerated for crude petroleum pipelines, passenger car rental, and nonferrous metal scrap collection. Prices turned up after falling a month earlier for ferrous metal scrap collection, waste paper collection, natural gas utilities, cable and other pay tv services, and scheduled air passenger transportation. Price declines slowed for electric power utilities and for truck rental and leasing. Prices continued to rise for other specialty hospitals. By contrast, prices turned down after rising in October for water transportation of freight, n.e.c., deep sea foreign transportation of freight, local trucking without storage, tugging and towing services, travel agencies, and for airports and airport services. Price increases slowed for scheduled air cargo transportation, radio broadcasting, non- local trucking, general medical and surgical hospitals, help supply services, and for hotels and motels. Prices fell more than a month earlier for psychiatric hospitals

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.

New seasonal adjustment method to be implemented

Effective with the release of PPI data for January 1995 on February 10, a new methodology will be used to calculate seasonally adjusted data. BLS will switch from the Bureau of the Census' X-11 program to a new system for calculating its Commodity and Stage-of-Processing indexes. This new system will improve our data production capabilities and modernize our basic methods of seasonal adjustment. Central to this change will be Statistics Canada's X-11ARIMA/88 software (Dagum 1988) for seasonal adjustment. To receive a summary report on the new methodology, please contact our Branch of Information and Analysis at 202-606-7708. 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 July 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 July 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 July 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