March 1995 Producer Price Index

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The Producer Price Index for Finished Goods was unchanged in March, seasonally adjusted, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. This followed three consecutive monthly increases of 0.3 percent. Prices received by domestic producers of intermediate goods moved up 0.3 percent in March, after increasing about one percent in each of the previous two months. The Crude Goods Price Index declined 1.3 percent after increasing 1.5 percent in February and 1.0 percent in January. (See table A.)

Among finished goods in March, prices for energy goods and foods both turned down after rising in February. The index for finished goods other than foods and energy inched up 0.1 percent after rising 0.3 percent in the previous month.

recalculated to incorporate late reports and corrections by respondents. All indexes are subject to recalculation four months after original publication. During the first quarter of 1995, the Finished Goods Price Index moved up at a seasonally adjusted annual rate of 2.6 percent, following an increase at a rate of 2.2 percent during the fourth quarter of 1994. The energy goods index advanced at a 9.1 percent annual rate from December 1994 to March 1995 after showing no change over the last three months of 1994. The index for finished consumer foods turned down at a 1.8 percent annual rate from December to March after advancing at a 9.2 percent rate during the fourth quarter of 1994. The rate of increase for the finished goods index less foods and energy was 2.6 percent in the first quarter of 1995 compared with an increase at an annual rate of just 0.3 percent in the fourth quarter of 1994. Price increases accelerated for capital equipment and consumer nondurables less foods, while prices for consumer durables turned up slightly after inching down in the previous quarter.

Before seasonal adjustment, the Producer Price Index for Finished Goods was unchanged in March at 126.9 (1982 =100). From March 1994 to March 1995, the Finished Goods Price Index rose 1.6 percent. During this same period, consumer food prices increased 0.8 percent, the index for finished energy goods advanced 2.3 percent, and prices for finished goods other than foods and energy were up 1.8 percent. Prices received by domestic producers of intermediate goods increased 5.9 percent during the 12 months ended in March 1995, and crude material prices declined 1.7 percent over the same period.

The Producer Price Index for finished energy goods fell 0.5 percent in March, following increases of 0.4 percent in February and 2.3 percent in January. Prices for gasoline declined 2.1 percent in March following two months of advances. Prices for residential natural gas fell 0.6 percent after declining 0.4 percent a month earlier. Price increases for home heating oil slowed from 6.5 percent in February to 0.7 percent in March. By contrast, prices for residential power turned up after falling in February.

Prices for finished consumer foods moved down 0.2 percent in March after increasing 0.3 percent in February. Prices turned down after rising a month earlier for pork (-4.3 vs. 0.8), roasted coffee (-4.8 vs. 2.5 percent), beef and veal (-0.8 vs. 0.9), and for finfish and shellfish (-0.4 vs. 2.6 percent). Prices also fell after increasing a month earlier for young chickens, pasta products, and processed turkeys. Price increases slowed for dairy products, confectionery end products, and eggs for fresh use. Prices for fresh fruits and melons fell more in March (-5.3 percent) than in February (-3.5 percent). Prices continued to rise for processed fruits and vegetables. Prices for fresh and dry vegetables turned up 5.7 percent after falling 6.0 percent in the previous month. Price increases accelerated for soft drinks. Prices for shortening and cooking oils fell less in March than in February.

The index for consumer goods other than foods and energy moved up 0.2 percent in March, after increasing 0.3 percent in February. This index increased at a seasonally adjusted annual rate of 2.6 percent from December 1994 to March 1995 after posting a rate of 0.6 percent in the fourth quarter of 1994. (The moderate fourth-quarter rate of increase for this category was largely due to a 2.1 percent decline in the index for motor vehicles in October 1994.) In March, increases were registered for cosmetics, tobacco products, light trucks, tires and tubes, women's apparel, newspaper circulation, books, mobile homes, and over-the-counter drugs. These advances more than offset declines for passenger cars, household glassware, and periodicals.

In March, the capital equipment index inched down 0.1 percent after rising 0.3 percent in both February and January. This index advanced at a 2.1 percent seasonally adjusted annual rate in the first quarter of 1995 after showing no change over the final quarter of 1994. In March, the index for ships turned down 1.5 percent after increasing 2.4 percent a month earlier. Prices also turned down after rising in the previous month for transformers and textile machinery. Price increases for heavy trucks slowed from 1.7 percent in February to 0.4 percent in March. Price increases also slowed from February to March for commercial furniture, railroad equipment, printing trades machinery, metal cutting machine tools, and mining machinery. Prices were unchanged after increasing a month earlier for communication equipment and for tools and dies. By contrast, prices turned up after falling in February for light motor trucks and for office and store machines. Prices for electronic computers fell 0.9

percent following a 1.8 percent decline in the previous month. Price increases accelerated for truck trailers, construction machinery, pumps, and oil field machinery. Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 0.3 percent, seasonally adjusted in March, after rising 0.9 percent in February. During the first quarter, this index rose at a 9.2 percent seasonally adjusted annual rate after increasing at a 6.9 percent rate in the fourth quarter of 1994. When food and energy prices are excluded, this index increased 0.4 percent in March after rising 1.0 percent in each of the previous two months. Prices for both nondurable and durable manufacturing materials, containers, energy goods, and construction materials rose less than in February. In contrast, the foods and feeds index turned up after declining in the previous month. (See table B.)

The index for nondurable manufacturing materials increased 0.6 percent after rising 1.7 percent a month earlier. These prices rose at an 18.5 percent seasonally adjusted annual rate in the last three months after climbing at a 15.2 percent rate from September to December. In March, the rise in the paperboard index slowed to 0.1 percent from 4.3 percent in the previous month. Prices for paper, plastic resins and materials, and gray fabrics also rose less than in February. Indexes for alkalies and chlorine and for miscellaneous basic organic chemicals turned down after rising a month ago. The index for inedible fats and oils, however, turned up 1.0 percent after falling 15.3 percent in February. Prices for intermediate basic organic chemicals rose more than a month earlier.

The rise in the index for durable manufacturing materials slowed to 0.1 percent in March from 1.3 percent a month earlier. Durable manufacturing material prices rose at a seasonally adjusted annual rate of 14.0 percent from December to March, slightly less than the 14.9 percent rate of increase in the fourth quarter of 1994. In March, the rise in the aluminum mill shapes index slowed to 0.1 percent from 6.4 percent in the previous month. Prices for both cold and hot rolled steel sheet and strip and for hot rolled steel bars also rose less than in February. By contrast, the copper and brass mill shapes index turned up 2.3 percent after declining 1.0 percent in February. Prices for plywood, aluminum, and copper also rose after falling a month earlier.

Prices for containers registered a 1.0 percent advance in March after increasing 3.9 percent in February. This index advanced at a 30.8 percent seasonally adjusted annual rate during the first quarter after increasing at a 17.8 percent rate in the fourth quarter of 1994. In March, the rise in the index for paper boxes and containers slowed to 1.3 percent from 3.3 percent in the previous month, and aluminum can prices rose 0.4 percent after surging 19.6 percent a month earlier.

The index for intermediate energy goods rose 0.1 percent in March, compared with a rise of 0.8 percent in the previous month. From December to March, prices for energy goods rose at a 7.9 percent seasonally adjusted annual rate after rising at a 1.9 percent rate from September to December. The March rise in the diesel fuel index slowed to 0.2 percent from 5.7 percent a month earlier. Indexes for liquefied petroleum gas and industrial electric power also rose less than in February. Prices for gasoline and coke oven products turned down after rising a month ago. In addition, indexes for both industrial and commercial natural gas fell more than a month earlier. The residual fuel index, however, rose 15.7 percent after declining 2.4 percent in February. Prices for natural gas to electric utilities also turned up after falling in the previous month.

The Producer Price Index for construction materials rose 0.3 percent in March, slightly less than its February advance. This index rose at a 5.3 percent seasonally adjusted annual rate from December to March after increasing at a 5.6 percent rate in the preceding three months. In March, price increases for fabricated structural metal products, gypsum products, plastic construction products, plywood, and asphalt felts and coatings outweighed declines for softwood lumber, nonferrous wire and cable, and for non-fluid power metal valves. The index for intermediate foods and feeds turned up 0.3 percent in March after falling 0.2 percent a month earlier. During the first quarter, this index rose at a 3.3 percent seasonally adjusted annual rate after falling at a rate of almost 6 percent in the previous quarter. In March, the index for prepared animal feeds rose 1.3 percent after declining by the same amount in the previous month. Prices for crude vegetable oils and for bulk liquid milk products also turned up after falling a month earlier. In addition, the flour index fell less than in February. Conversely, the pork index turned down 4.3 percent after rising 0.8 percent in the previous month. Prices for confectionery materials, beef and veal, and refined sugar also fell after increasing in February. In addition, the index for natural and processed cheese rose less than it had a month earlier. Crude Goods

The Producer Price Index for Crude Materials for Further Processing turned down 1.3 percent in March, seasonally adjusted, after advancing in the previous 2 months. During the first quarter of this year, crude goods rose at a seasonally adjusted annual rate of 4.9 percent, following two consecutive quarterly decreases. In March, prices declined 2.4 percent for foodstuffs and feedstuffs and 1.6 percent for crude energy goods. However, basic industrial materials edged up 0.5 percent for the month. (See table B.)

The index for crude energy materials fell 1.6 percent after climbing 4.5 percent during the previous month. Crude energy materials rose at a 6.0 percent annual rate in the first quarter, in sharp contrast to large declines in the third and fourth quarters of 1994. Prices for natural gas to pipelines continued to decline, while crude petroleum turned down 0.8 percent in March after rising 5.4 percent in February. Coal prices increased 3.0 percent after falling in the prior month.

The crude foodstuffs and feedstuffs index dropped 2.4 percent, after rising 1.2 percent in the previous month. Crude foodstuffs and feedstuffs fell at an annual rate of 5.4 percent in the first quarter of 1995, the fifth consecutive quarterly drop. In March, indexes for slaughter cattle, slaughter broilers, slaughter hogs, unprocessed finfish, and wheat all turned down after increasing during the preceding month. The indexes for both alfalfa hay and slaughter turkeys declined more than in February. By contrast, the index for fresh and dried vegetables rose 5.7 percent, after declining last month. Fluid milk prices advanced 3.0 percent, after edging up 0.4 percent in February.

Price increases for basic industrial materials slowed from 1.4 percent in February to 0.5 percent in March. In the first quarter of 1995, this index increased at a 21.1 percent annual rate after rising at a 26.7 percent rate from September to December of 1994. In March, the deceleration in this index was led by softwood logs which rose 1.0 percent after climbing 4.2 percent in February. Price increases also slowed for sand and gravel. Prices fell more in March than in February for iron and steel scrap. Aluminum scrap prices fell 10.0 percent in March after moving down 4.3 percent in February. In addition, prices for leaf tobacco and copper ores turned down following increases in the prior month. Conversely, prices for wastepaper and raw cotton rose more than in February.

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 0.7 percent in March after increasing 1.3 percent in February. (Net output price indexes are not seasonally adjusted.) This index inched up slightly at an annual rate of 0.6 percent in the first quarter of 1995 after falling at an 8.6 percent annual rate from September to December. In March, prices turned down 2.2 percent after rising 1.8 percent a month earlier for the oil and gas extraction industry group index. The index for nonmetallic minerals mining was unchanged after advancing about 1 percent in both February and January. By contrast, prices for the bituminous coal and lignite mining industry group turned up 3.5 after moving down in each of the three previous months. Price increases for the metal mining industry group accelerated from 0.8 percent in February to 2.8 percent in March. The index for the anthracite mining industry group was unchanged following a 1.1 percent decline a month earlier. Manufacturing. The Producer Price Index for total domestic manufacturing industries moved up 0.2 percent in March, after rising about 0.6 percent in both February and January. This index rose at an annual rate of 5.0 percent from December to March, after rising at an 2.0 percent rate in the final quarter of 1994. In March, prices turned down after rising a month earlier for the industry groups for petroleum refining and for electrical and electronic machinery. The transportation equipment group index inched down after showing no change in February. Price increases slowed for the industry groups for food and kindred products, textile mill products, apparel, furniture and fixtures, paper products, printing and publishing, chemicals and allied products, leather products, primary metal industries, and fabricated metal products. By contrast, price increases accelerated for the industry groups for tobacco manufactures, rubber and plastic products, and nonmetallic mineral products.

Other. Among other industries, prices for waste paper collection increased 16.6 percent, following a 9.7 percent advance in February. In March, price increases also accelerated for local trucking with storage, radio broadcasting, hotels and motels, and help supply agencies. Prices turned up after falling a month earlier for the industry groups for building cleaning and maintenance, truck rental and leasing, airports and airport services, deep sea domestic transportation of freight, tugging and towing services, and electric power utilities. Prices fell less in March than in February for freight transportation arrangement. Prices increased in March after showing no change a month earlier for scheduled air cargo transportation and freight transportation along the Great Lakes. The passenger car rental index rose at least 5.6 percent for the second consecutive month.

By contrast, price increases slowed for non-air courier services, non- local trucking, scheduled air passenger transportation, offices and clinics of doctors of medicine, and skilled and intermediate care facilities. Prices turned down in March after rising in February for farm products warehousing and storage, travel agencies, and medical laboratories. Prices were unchanged after rising in the previous month for air courier services and for refrigerated warehousing and storage. The index for natural gas utilities fell about 1.3 percent for the second consecutive month.

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 Nov. 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 November 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 Nov. 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