June 1995 Producer Price Index

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The Producer Price Index for Finished Goods inched down 0.1 percent in June, seasonally adjusted, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. This followed no change in May and a 0.5 percent increase in April. Prices received by domestic producers of intermediate goods were up 0.1 percent after moving up 0.2 percent in the previous month. The Crude Goods Price Index turned up 0.7 percent after falling 0.8 percent in May. (See table A.)

Among finished goods in June, declines for energy (-1.0 percent) and foods (-0.3 percent) outweighed an increase of 0.2 percent in finished goods other than food and energy. Prices for capital goods edged up 0.2 percent, partly reflecting continued increases for heavy motor trucks. Prices also increased from May to June for consumer durables, such as mobile homes and passenger cars, but decreased for consumer nondurables, such as women's apparel.

Change in Except finished Inter- goods foods from 12 mediateCrude and months Month Total Foods Energy energy ago goods goods (unadj.) 1994 June 0.1 -0.4 0.3 0.1 0.1 0.3 1.1 July 0.2 0.4 0.9 0.1 0.6 0.3 -0.4 Aug. 0.6 0.2 2.3 0.2 1.9 0.7 0 Sept. -0.3 -0.2 -2.4 0.1 1.5 0.4 -2.4 Oct. -0.4 -0.1 -1.3 -0.4 1.0 0.3 -0.6 Nov. 0.6 1.0 2.2 0.2 1.3 0.8 0.6 Dec. 0.3 1.3 -0.9 0.2 1.7 0.4 0.5

reported because indexes for February 1995 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision four months after original publication.

During the first 6 months of 1995, the Finished Goods Price Index rose at a seasonally adjusted annual rate of 2.1 percent, the same as in the last 6 months of 1994. These prices increased at a 1.5 percent annual rate in the first half of 1994. During the first half of 1995, price increases accelerated for the energy and nonfood components; however, food prices turned down after rising in the previous 6 months. The index for energy goods advanced at a 6.6 percent annual rate from December 1994 to June 1995 after increasing at a 1.6 percent annual rate in the second half of 1994. Prices for finished goods other than foods and energy moved up at a 2.9 percent annual rate in the first half of 1995 after rising at a 1.0 percent annual rate in the previous 6 months; much of this acceleration was due to the index for motor vehicles. Consumer foods, however, turned down at a rate of 3.1 percent during the first 6 months of 1995 after increasing at a rate of 5.5 percent in the second half of 1994. The Intermediate Goods Price Index advanced at a rate of 6.9 percent after rising at a rate of 6.2 percent in the last half of 1994. The Crude Goods Price Index turned up at a rate of 5.2 percent from December 1994 to June 1995 after falling at a 4.6 percent annual rate over the last 6 months of 1994.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.2 percent in June to 128.2 (1982 =100). From June 1994 to June 1995, the Finished Goods Price Index rose 2.1 percent. During this same period, consumer food prices increased 1.2 percent, prices for finished energy goods advanced 4.1 percent, and prices for finished goods other than foods and energy were up 2.0 percent. Prices received by domestic producers of intermediate goods increased 6.5 percent during the 12 months ended in June 1995, and crude material prices moved up 0.2 percent over the same period.

Finished goods

Prices for finished consumer foods declined 0.3 percent in June, after decreasing 0.6 percent in May. Prices turned up in June after falling a month earlier for beef and veal, eggs for fresh use, young chickens, pork, and roasted coffee. Price declines slowed for finfish and shellfish, dairy products, and for shortening and cooking oils. Prices for milled rice rose more rapidly in June (12.3 percent) than in May (3.0 percent). By contrast, prices for fresh fruits and melons fell 13.5 percent after skyrocketing almost 30 percent in the previous month. Prices continued to fall sharply for fresh and dry vegetables. Pasta prices turned down in June after rising in May. Price increases slowed for bakery products, processed fruits and vegetables, and processed turkeys.

The Producer Price Index for finished energy goods fell 1.0 percent in June, following a 0.2 percent decrease in May. Gasoline prices turned down 3.1 percent after increasing 2.0 percent in the previous month, and prices for home heating oil declined 5.8 percent after advancing 9.3 percent in May. By contrast, prices for residential natural gas decreased less than a month earlier. Prices for residential electricity turned up in June after falling in May.

The index for consumer goods other than foods and energy moved up 0.2 percent in June, after increasing 0.4 percent in May. From December 1994 to June 1995, this index rose at a 3.0 percent seasonally adjusted annual rate, compared with a rise at a 1.2 percent rate in the latter half of 1994. In June, the tobacco products index was unchanged after rising 2.2 percent in the previous month. Prices turned down after increasing a month earlier for household appliances, cosmetics, and floor coverings. The index for women's apparel fell more in June than in the previous month. Prices rose less in June than in May for household furniture, girls' apparel, periodicals, and leather footwear. By contrast, prices turned up after decreasing in May for passenger cars, prescription drugs, and for tires and tubes. Prices for textile housefurnishings were unchanged in June after falling a month earlier. The index for mobile homes rose more rapidly in June than in May. Prices for sanitary papers and health products increased 2.0 percent for the second consecutive month.

In June, the capital equipment index increased 0.2 percent, the same as in May. This index rose at a 2.7 percent annual rate in the first half of 1995, compared with a 0.9 percent rate of advance in the last half of 1994. In June, increases were registered for paper industries machinery (3.2 percent), transformers and power regulators (1.3 percent), and heavy motor trucks (1.2 percent). However, prices declined for electronic computers and x-ray equipment.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 0.1 percent, seasonally adjusted, in June after rising 0.2 percent in May. Excluding food and energy prices, this index increased 0.2 percent, the same as a month earlier. Price increases for nondurable manufacturing materials, foods and feeds, and containers outweighed declines for energy goods, durable manufacturing materials, and construction materials. (See table B.)

The index for nondurable manufacturing materials increased 0.7 percent in June after rising 0.6 percent a month earlier. This index advanced at a 17.6 percent annual rate in the first half of 1995 after climbing at a 17.1 percent rate in the final half of 1994. In June, price rises for woodpulp, paper, nitrogenates, and inedible fats and oils more than offset declines for primary basic organic chemicals, phosphates, leather, and for alkalies and chlorine.

Prices for intermediate foods and feeds increased 1.0 percent after declining the same amount in the previous month. This index fell at a 0.7 percent annual rate during the first 6 months of 1995 after declining at a 5.8 percent rate from June to December 1994. In June, the index for prepared animal feeds turned up 1.0 percent after falling 1.4 percent in the previous month. Prices for beef and veal, crude vegetable oils, natural and processed cheese, and pork also rose after declining in May. The flour index rose more than a month earlier. By contrast, the index for fluid milk products declined 2.8 percent after decreasing 0.3 percent in the previous month. Prices for confectionery materials turned down after rising a month earlier.

The index for containers rose 1.1 percent in June after increasing 1.4 percent a month earlier. Prices for this category increased at a 20.8 percent annual rate during the first 6 months of 1995 after rising at a 14.7 percent rate during the last 6 months of 1994. The June deceleration was mainly the result of smaller price increases for paper boxes and containers.

The index for intermediate energy goods turned down 1.3 percent in June after rising in each of the last 7 months. From December 1994 to June 1995, this index advanced at a 5.8 percent annual rate after climbing at a 2.4 percent rate in the latter half of 1994. In June, the index for industrial electric power turned down 2.0 percent after rising 1.3 percent a month earlier. Prices for gasoline, diesel fuel, commercial electric power, jet fuels, and liquefied petroleum gas also fell after increasing in the previous month. By contrast, the commercial natural gas index turned up 0.4 percent after falling 4.0 percent a month earlier. Prices for natural gas to electric utilities fell less than in the previous month, and the residual fuel index rose more than in May.

Prices for durable manufacturing materials fell 0.2 percent, the same as in May. This index advanced at a 6.3 percent annual rate during the first 6 months of 1995 following a 12.8 percent rate of advance in the second half of 1994. In June, price decreases for flat glass, plywood, building paper and board, and silver outweighed advances for copper and brass mill shapes, hot rolled steel sheet and strip, copper, and aluminum.

The index for construction materials declined 0.1 percent in June after remaining unchanged a month earlier. From December 1994 to June 1995, this index moved up at a seasonally adjusted annual rate of 3.3 percent following a 5.1 percent rate of increase in the second half of 1994. In June, prices declined for plywood, softwood lumber, gypsum products, and for asphalt felts and coatings. By contrast, prices increased for millwork, nonferrous wire and cable, heating equipment, and cement.

Crude goods

In June, the Producer Price Index for Crude Materials for Further Processing rose 0.7 percent, seasonally adjusted, after falling 0.8 percent during the prior month. The index for both basic industrial materials and crude foodstuffs and feedstuffs increased in June following decreases in May. Conversely, the crude energy index declined after rising in May. (See table B.)

The index for crude nonfood materials less energy turned up 0.6 percent in June, after falling 0.3 percent in May. This index advanced at a 12.7 percent seasonally adjusted annual rate for the first half of 1995, about half the 24 percent rate of increase for the final 6 months of 1994. The June upturn was largely due to price increases for raw cotton, copper base scrap, and iron and steel scrap, all of which declined in May. In addition, prices increased after showing no change for hardwood logs, bolts, and timber. By contrast, the indexes for both cattle hides and wastepaper turned down over 5 percent in June, following price increases in the previous month. Price declines slowed for softwood logs, bolts, and timber and aluminum base scrap.

After three consecutive months of price declines, the crude foodstuffs and feedstuffs index turned up 4.0 percent in June. This index declined at a 2.5 percent seasonally adjusted annual rate for the first 6 months of 1995, following a 7.6 percent rate of decline in the latter half of 1994. The June increase resulted from an upturn in prices for slaughter cattle (5.1 percent), slaughter broilers (19.8 percent), and slaughter hogs (13.4 percent), all of which fell sharply in May. Prices also rose after falling for soybeans, unprocessed finfish, and slaughter turkeys. Price increases accelerated for corn, wheat, and raw cane sugar. Prices for fluid milk fell less than in May. Conversely, the index for fresh fruits and melons fell considerably after a large increase during the previous month.

The crude energy goods index dropped 2.7 percent in June after rising for two consecutive months. This index increased at a 9.2 percent seasonally adjusted annual rate for the first 6 months of 1995, compared with a 16.9 percent rate of decline for the final half of 1994. Indexes for both crude petroleum and natural gas moved down following increases in April and May. Prices declines for coal slowed from 2.3 percent in May to 1.2 percent in June.

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 down 2.3 percent in June after increasing 1.1 percent in May. (Net output price indexes are not seasonally adjusted.) During the first half of 1995, this index rose at an annual rate of 1.7 percent after falling at a 7.6 percent rate in the last half of 1994. In June, prices for the oil and gas extraction industry group index fell 2.9 percent after rising 2.6 percent in May. The index for bituminous and lignite mining fell less than in May. However, the indexes for the industry groups for metal mining and anthracite mining turned up after decreasing in the previous month.

Manufacturing. The Producer Price Index for total domestic manufacturing industries was unchanged in June after moving up 0.4 percent in May. From December 1994 to June 1995, this index increased at an annual rate of 4.7 percent after increasing at a 2.2 percent rate in the latter half of 1994. In June, prices for tobacco manufactures showed no change, following a rise of 2.4 percent a month earlier. Prices turned down in June after increasing in May for the industry groups for textile mill products, chemicals and allied products, petroleum refining, and electrical machinery. Prices for the lumber and wood products industry group index continued their 3-month slide, falling more in June (-1.0 percent) than in both previous months. By contrast, prices for the paper and allied products industry group continued their upward trend of several months, rising 1.8 percent in June after increasing 1.3 percent in May. Prices for the industry group for measuring instruments turned up after inching down a month earlier. The index for rubber and plastic products increased much more in June than in May. Prices for the nonelectrical machinery industry group increased 0.3 percent after showing no change in the previous month. Prices continued to rise moderately for the industry group for furniture and fixtures.

Other. Among other industries, prices turned down after rising in the previous month for wastepaper collection, deep sea foreign transportation of freight, refined petroleum pipelines, travel agencies, and radio broadcasting. Prices for passenger car rental and employment agencies fell more in June than in May. Price increases slowed from May to June for scheduled air passenger transportation.

By contrast, price indexes turned up after falling in May for nonferrous metal scrap collection, hotels and motels, truck rental and leasing, psychiatric hospitals, and for water transportation of freight, n.e.c. Price increases accelerated for electric power utilities, skilled and intermediate health care facilities, and deep sea domestic transportation of freight. Prices for scheduled air cargo transportation rose 2.3 percent for the second consecutive month.

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