January 1995 Producer Price Index

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

The Producer Price Index for Finished Goods increased 0.3 percent in January, seasonally adjusted, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. In December, this index rose 0.4 percent, following a 0.6 percent advance in November. Prices received by domestic producers of intermediate goods moved up 1.0 percent in January after increasing 0.4 percent in the previous month. The Crude Goods Price Index turned up 1.0 percent after falling 0.4 percent in December. (See table A.)

Among finished goods, food prices turned down after rising substantially in December, and the index for finished goods other than foods and energy moved up 0.2 percent in January after increasing 0.3 percent a month earlier. In contrast, the index for finished energy goods advanced 2.3 percent after declining 1.0 percent in the previous month.

1995 Jan. 0.3 -0.6 2.3 0.2 1.6 1.0 1.0

Finished goods

The Producer Price Index for finished energy goods advanced 2.3 percent in January, seasonally adjusted. This followed a December decline of 1.0 percent. Gasoline prices turned up 7.9 percent, following a 3.0 percent decrease in the previous month. Prices also turned up after falling a month earlier for residential electricity and residential natural gas. Prices for home heating oil, however, turned down 5.2 percent after rising 3.0 percent in December.

Prices for finished consumer foods declined 0.6 percent in January, following a 1.4 percent increase in December. Prices turned down almost 27 percent for fresh and dry vegetables after skyrocketing 61 percent a month earlier. Prices also turned down after rising in the previous month for fresh fruits and melons, eggs for fresh use, and roasted coffee. Prices fell more in January than in December for dairy products and processed turkeys. By contrast, prices turned up after falling in the previous month for beef and veal, processed finfish and shellfish, processed young chickens, and processed fruits and vegetables. Pork prices increased almost 6 percent after inching up slightly in December. Price increases also accelerated for soft drinks and for shortening and cooking oils.

1995 Jan. 0.7 1.0 1.0 5.2 -0.1 -0.1 3.0 -2.2 Note: Figures shown above and elsewhere in this release may differ from those previously reported because seasonal adjustment factors have been recalculated to reflect developments through 1994. In addition, data for September 1994 have been revised to reflect the availability of late reports and corrections by respondents.

The index for consumer goods other than foods and energy inched up 0.1 percent in January after increasing 0.3 percent in the previous month. Prices turned down in January after rising in December for prescription drugs, apparel, alcoholic beverages, and periodicals. Prices rose much less in January than in the previous month for passenger cars and light trucks. Prices for tobacco products and newspaper circulation were unchanged after moving up somewhat in December. By contrast, price increases accelerated for cosmetics and sanitary papers. Prices turned up after falling or showing no change a month earlier for textile housefurnishings, books, and sporting goods.

The capital equipment index rose 0.3 percent in January after advancing 0.4 percent in December. Increases were registered for civilian aircraft, metal cutting machine tools, paper industry machinery, truck trailers, and pumps and compressors. By contrast, prices for heavy trucks declined 1.8 percent. Prices also moved down for transformers and power regulators.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 1.0 percent seasonally adjusted in January, after rising 0.4 percent in December. When food and energy prices are excluded, this index also increased 1.0 percent in January, following a 0.5 percent advance in December. Prices for both durable and nondurable manufacturing materials, construction materials, as well as containers rose more than in December. The intermediate energy materials index increased after remaining unchanged a month earlier, and the foods and feeds index turned up after falling in December. (See table B.)

The index for nondurable manufacturing materials increased 2.0 percent after rising 1.1 percent a month earlier. The rise in the paperboard index accelerated to 4.9 percent in January from 0.1 percent in the previous month. Prices for paper, plastic resins and materials, both intermediate and miscellaneous organic chemicals, synthetic fibers, and phosphates also rose more than in December. The index for alkalies and chlorine, however, turned down 2.1 percent after rising 4.5 percent a month ago. Prices for primary organic chemicals and for inedible fats and oils rose less than they had in December.

The index for durable manufacturing materials moved up 1.8 percent in January after a December advance of 1.0 percent. The rise in the aluminum mill shapes index accelerated to 9.6 percent in January from 4.2 percent a month earlier. Prices for semifinished steel mill products and cold rolled steel sheets and strip also rose more than in December. Indexes for hot rolled steel sheet and strip and flat glass turned up after falling in the previous month. In addition, prices for hot rolled steel bars rose after remaining unchanged a month earlier. The index for plywood, however, turned down 3.1 percent after advancing 0.2 percent in December. Prices for copper and brass mill shapes rose less than in December.

The rise in the container index accelerated to 1.9 percent in January from 0.9 percent in December. This increase was mainly a result of the paper boxes and containers index, which rose 2.4 percent after increasing 0.8 percent in the prior month.

Prices for materials and components for construction registered a 0.6 percent advance in January after increasing 0.2 percent in December. Indexes for fabricated structural metal products, concrete products, switchgear, and heating equipment rose more than in December. The decline in the softwood lumber index slowed to 1.3 percent from 4.0 percent in December. Prices for millwork were unchanged after falling month earlier. By contrast, the plywood index turned down 3.1 percent after rising 0.2 percent a month earlier. Prices for gypsum products also fell after advancing in December. In addition, indexes for plastic construction products and nonferrous wire and cable rose less than in the prior month.

The index for intermediate energy goods rose 1.0 percent in January after remaining unchanged the month before. The gasoline index turned up 7.9 percent after falling 3.0 percent in December. Prices for liquid asphalt and natural gas to electric utilities also turned up in January after falling in the prior month. In addition, the index for diesel fuel fell less than in December, and residual fuel prices rose more than in the previous month. In contrast, the jet fuels index turned down 1.3 percent after rising 3.0 percent a month earlier. Prices for both industrial and commercial natural gas also fell after increasing in December. Indexes for commercial electric power and liquefied petroleum gas rose less than they had risen in the previous month.

The Producer Price Index for intermediate foods and feeds turned up 0.7 percent in January after falling 0.8 percent in December. The beef and veal index turned up 2.7 percent after falling 1.4 percent a month earlier. Prices for prepared animal feeds and for natural and processed cheese also turned up after falling in December. Indexes for pork, confectionery materials, and refined sugar rose more in January than in December. In addition, prices for miscellaneous beverage materials remained unchanged after falling in the previous month. In contrast, the index for flour turned down 0.3 percent after rising 0.7 percent a month earlier. Prices for crude vegetable oils also fell after increasing in the previous month, and the fluid milk products index fell more than in December.

Crude goods

The Producer Price Index for Crude Materials for Further Processing moved up 1.0 percent in January after declining 0.4 percent in December. The index for crude energy materials fell less than in December, and prices for basic industrial materials rose more than in the prior month. By contrast, the crude foodstuffs and feedstuffs index turned down after rising a month earlier. (See table B.)

The index for crude energy materials declined 1.3 percent seasonally adjusted in January, the third consecutive monthly decline. The natural gas to pipelines index fell 2.8 percent. Crude petroleum prices rose 2.5 percent.

The rise in the crude nonfood materials less energy index accelerated to 3.0 percent from 2.3 percent in December. The iron and steel scrap index rose 4.8 percent in January after increasing 3.3 percent in the prior month. Prices for wastepaper, raw cotton, pulpwood logs, and construction sand and gravel also rose more than in December. The cattle hide index turned up after falling a month earlier, and miscellaneous roundwood prices were unchanged after falling in December. In contrast, the rise in the index for copper base scrap slowed to 1.4 percent in January from 6.2 percent in the previous month.

The crude foodstuffs and feedstuffs index declined 0.1 percent in January after increasing 0.2 percent in December. The fresh vegetables except potatoes index turned down 33.2 percent following a 91.0 percent rise in December. Prices for slaughter broilers, fluid milk, fresh fruits and melons, and corn also turned down after increasing a month earlier. The slaughter cattle index, however, turned up 2.6 percent after falling about 1 percent in December. Prices for Louisiana rough rice and both unprocessed finfish and shellfish also rose after declining a month earlier. In addition, slaughter hog prices rose more than they had risen in December.

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

Mining. The Producer Price Index for the net output of total domestic mining industries decreased 0.4 percent in January after falling 0.8 percent in both December and November. (Net output price indexes are not seasonally adjusted.) In January, price declines for the bituminous coal and lignite mining industry group slowed to 0.3 percent from 7.2 percent a month earlier. The index for nonmetallic minerals mining rose more rapidly than a month earlier. Prices for the metal mining industry rose substantially for the fifth consecutive month. The oil and gas extraction industry group index, however, fell 1.0 percent after moving up 0.3 percent in December.

Manufacturing. The Producer Price Index for total domestic manufacturing industries turned up 0.6 percent in January, following a 0.2 percent decline in December. Prices turned up after declining or showing no change a month earlier for the industry groups for rubber and plastic products, food and kindred products, textile mill products, and for electrical and electronic machinery. Price increases accelerated for the industry groups for primary metal industries, paper and allied products, nonmetallic mineral products, fabricated metal products, nonelectrical machinery, transportation equipment, and leather and leather products. Prices for the petroleum refining industry group moved down 0.5 percent in January after falling 5.7 percent in December. The index for the chemicals industry group rose 1.3 percent for the second consecutive month. By contrast, prices turned down after rising a month earlier for the apparel industry group.

Other. Among other industries, prices for waste paper collection advanced over 15 percent in January, the third consecutive substantial monthly increase. The index for the U. S. Postal Service increased 10.3 percent, reflecting across-the-board rate hikes for domestic services. Other increases were for crude petroleum pipelines, metal scrap collection, water transportation of freight, n.e.c., tugging and towing services, freight transportation arrangement, hotels and motels, and health services. Prices declined, however, for deep sea domestic transportation of freight, radio broadcasting, scheduled air transportation, airports and airport services, and passenger car rental.

Resampling of industries

Effective with this release, another set of resampled industries is introduced. Under the resampling procedure, the sample for an industry is updated to reflect current conditions more accurately when the structure, membership, technology, or product mix of an industry has shifted significantly. The Bureau of Labor Statistics published the first results of this systematic process in July 1986. Subsequent efforts have been completed at 6-month intervals.

Thirty-seven new or resampled industries are being introduced this month. Among the newly introduced series are data for skilled and intermediate nursing care facilities and for building cleaning and maintenance services, n.e.c. Indexes for these industries and most of their products will continue to appear in table 5 of the monthly detailed report, Producer Price Indexes.

Standard Industrial Classification (SIC) code Industry

1475 Phosphate rock 2079 Shortening, table oils, and other edible fats and oils, n.e.c. 2095 Roasted coffee 2211 Broadwoven fabric mills, cotton 2221 Broadwoven fabric mills, manmade fiber and silk 2257 Weft knit fabric 2261 Finishers of broadwoven fabrics of cotton 2262 Finishers of broadwoven fabrics of manmade fiber and silk 2269 Finishers of textiles, n.e.c. 2411 Logging 2711 Newspaper publishing 3211 Flat glass 3291 Abrasive products 3353 Aluminum sheet, plate, and foil 3354 Aluminum extruded products

3355 Aluminum rolling and drawing, n.e.c. 3411 Metal cans 3443 Fabricated plate work (boiler shapes) 3498 Fabricated pipe and pipe fittings 3523 Farm machinery and equipment 3524 Lawn and garden tractors and home and garden equipment 3533 Oil and gas field machinery and equipment 3534 Elevators and moving stairways 3559 Special industry machinery, n.e.c. 3571 Electronic computers 3572 Computer storage devices 3579 Office machines, n.e.c. 3596 Scales and balances, except laboratory 3634 Electric housewares and fans 3663 Radio and television broadcasting communications equipment 3714 Motor vehicle parts and accessories 3728 Aircraft parts and auxiliary equipment, n.e.c. 4731 Arrangement of transportation of freight and cargo 7349 Building cleaning and maintenance services, n.e.c. 8053 Skilled and intermediate nursing care facilities

For information on specific additions, deletions, and recodes of indexes that are effective this month, see tables 13 through 18 of Producer Price Indexes, Data for January 1995.

New seasonal adjustment method implemented

Effective with this release, a new methodology has been used to calculate seasonally adjusted data. In January, BLS switched from the Bureau of the Census' X-11 program to a new system for calculating its Commodity and Stage-of-Processing indexes. Central to this change is the use of Statistics Canada's X-11ARIMA/88 methodology (Dagum 1988) for seasonal adjustment. This methodology for seasonal adjustment incorporates a number of technical enhancements that improve the estimation of seasonal factors. To receive a summary report on the new methodology, please contact our Branch of Information and Analysis at 202-606-7705, or see "Summary of changes to the Producer Price Index seasonal adjustment methodology" in the January 1995 issue of Producer Price Indexes.

Recalculation of Seasonal Adjustment Factors

Effective with this release, seasonal adjustment factors have been recalculated to reflect 1994 price movement patterns for stage-of- processing (SOP) and commodity groupings. This routine annual recalculation may affect seasonally adjusted indexes and percent changes from January 1990 to the present. Revised seasonally adjusted data for this period, as well as seasonal factors to be used through December 1995, are available on request from BLS. Table C shows 1994 monthly seasonally adjusted percent changes for the three major SOP categories calculated with the old seasonal factors, compared with the percent changes for recalculated indexes. The latter incorporate the new seasonal factors that reflect 1994 price movement patterns and the impact of the new seasonal adjustment methodology mentioned above.

In addition, Intervention Analysis Seasonal Adjustment (IASA) methods were introduced to calculate seasonally adjusted data for electric power and residential natural gas. This methodology improves the quality of the seasonal factor estimates for these indexes.

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: 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 Sept. 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 September 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. Table 3. Producer Price Indexes for selected commodity groupings (1982=100 unless otherwise indicated)

1/ Data for Sept. 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