September 1995 Producer Price Index

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The Producer Price Index for Finished Goods increased 0.3 percent seasonally adjusted from August to September, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This followed a decline of 0.1 percent in August and no change in July. Prices received by domestic producers of intermediate goods inched down 0.l percent over the month after showing no change in each of the previous 2 months. Crude material prices advanced 1.9 percent after falling in August and July. (See table A.)

Among finished goods, the index for finished foods turned up after showing no change in August, and the index for finished energy goods fell much less than in recent months. In addition, the index for finished goods less foods and energy moved up just slightly more in September (0.2 percent) than in August (0.1 percent).

Change in Except finished Inter- goods foods from 12 mediate Crude and months Month Total Foods Energy energy ago goods goods (unadj.) 1994 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

been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.

During the third quarter of 1995, prices received by domestic producers of finished goods advanced at a seasonally adjusted annual rate of 0.9 percent, the same amount posted in the second quarter. The index for finished goods other than foods and energy rose at a seasonally adjusted annual rate of 2.0 percent after rising at a 2.9 percent rate in both the first and second quarters. The index for finished energy goods turned down from June to September after rising from March to June. After two consecutive quarterly declines, the consumer foods index increased in the third quarter. Prices for intermediate goods edged down in the third quarter, the first calendar-quarter decline in 2 years. The index for crude materials for further processing fell slightly after increasing in each of the previous 3 calendar quarters.

Before seasonal adjustment, the Producer Price Index for Finished Goods declined 0.2 percent in September to 127.9 (1982=100). From September 1994 to September 1995, this index increased 1.8 percent. During this same period, consumer food prices rose 2.9 percent, the index for finished energy goods fell 0.8 percent, and the prices for finished goods other than foods and energy advanced 2.1 percent. The index for intermediate goods increased 4.9 percent during the 12 months ended in September 1995, and crude material prices were 2.7 percent higher than a year earlier.

Finished goods

Prices for finished consumer foods increased 1.0 percent over the month on a seasonally adjusted basis after showing no change in August. After falling at a seasonally adjusted annual rate of 4.9 percent in the second quarter and 1.2 percent in the first quarter, this index turned up at a 9.1 percent rate from June to September. In September, prices for fresh and dry vegetables advanced nearly 40 percent after falling about 13 percent in August. Prices also turned up after falling a month earlier for shortening and cooking oils and for pasta products. Price declines for beef and veal slowed from 3.4 percent in August to 1.3 percent in September. Price increases accelerated over the month for eggs for fresh use, turkeys, pork, processed fruits and vegetables, and milled rice. By contrast, prices turned down after rising a month earlier for finfish and shellfish, roasted coffee, fresh fruits and melons, and soft drinks. Prices rose less in September than in August for dairy products, processed young chickens, and confectionery end products.

Prices for finished energy goods moved down 0.5 percent in September after falling 0.9 percent a month earlier. During the third quarter, this index fell at a 14.7 percent annual rate after rising at annual rates of 2.0 percent in the second quarter and 11.3 percent in the first quarter. In September, prices for residential natural gas and home heating oil turned up after falling in the previous month. Prices for residential electric power, however, declined after increasing a month earlier. Gasoline prices fell for the fourth consecutive month in September (about 2 percent).

Prices for finished consumer goods other than foods and energy moved up 0.3 percent from August to September following a 0.1 percent rise in the previous month. This index rose at a seasonally adjusted annual rate of

2.3 percent in the third quarter following an increase at a 3.2 percent rate in the second quarter. Prices turned down after rising a month earlier for light motor trucks, jewelry, and leather footwear. Price increases slowed from August to September for sanitary papers and health products, alcoholic beverages, periodicals, and mobile homes. Prices fell more in September than in August for home electronic equipment. By contrast, prices turned up after falling a month earlier for cosmetics, soaps and detergents, over-the-counter drugs, and for tires and tubes. The passenger car index increased 0.5 percent in September after rising 0.2 percent in August. (On an unadjusted basis, this index actually fell 3.1 percent in September following a 0.6 percent decline in the previous month.) Price increases also accelerated in September for newspapers, prescription drugs, girls' apparel, household furniture, and floor coverings. The index for sporting goods was unchanged over the month after falling in August. Prices fell more in September than in August for household glassware.

In September, the capital equipment index increased 0.1 percent for the third consecutive month. This index moved up at a seasonally adjusted annual rate of 1.5 percent from June to September following a 2.4 percent rate of increase in the second quarter. In September, increases were registered for heavy motor trucks, metal cutting machine tools, transformers and power regulators, commercial furniture, communications equipment, and for pumps and compressors. Declines occurred for truck trailers, office and store machines and equipment, and electronic computers.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components declined 0.1 percent, seasonally adjusted, after remaining unchanged in each of the previous 2 months. During the third quarter, this index fell at a 0.3 percent seasonally adjusted annual rate after increasing at a 3.6 percent rate in the second quarter. In September, price declines for energy goods and durable manufacturing materials outweighed increases for construction materials and for foods and feeds. The index for nondurable manufacturing remained unchanged over the month. Excluding food and energy prices, this index increased 0.1 percent for the second consecutive month. (See table B.)

The index for intermediate energy goods declined 1.4 percent in September after falling 0.7 percent a month earlier. Prices for energy goods fell at a 17.0 percent seasonally adjusted annual rate in the last 3 months after rising at a 1.4 percent rate from March to June. In September, the index for commercial electric power turned down 1.4 percent after rising 0.4 percent in the previous month. Prices for industrial electric power and diesel fuel also declined after increasing in August. The index for residual fuel fell more than a month ago. By contrast, the decline in the liquefied petroleum gas index slowed to 0.7 percent from 8.6 percent in August. Prices for jet fuels and commercial natural gas turned up after falling a month earlier. In addition, the index for liquid asphalt rose more than in the previous month.

The index for durable manufacturing materials fell 0.1 percent for the second consecutive month. Durable manufacturing material prices rose at a seasonally adjusted annual rate of 0.3 percent from June to September, compared with a 1.2 percent rate of decline in the second quarter. In September, index declines for hot rolled steel sheet and strip, copper, copper and brass mill shapes, and zinc more than offset advances for plywood, building paper and board, silver, and platinum.

The index for construction materials rose 0.3 percent for the second month in a row. This index advanced at a 4.6 percent seasonally adjusted annual rate in the third quarter after moving up at a 1.4 percent rate in the second quarter. In September, price increases for softwood lumber, plywood, wiring devices, and switchgear outweighed declines for plastic construction products, nonferrous wire and cable, gypsum products, and fabricated ferrous wire products.

The rise in the index for intermediate foods and feeds slowed to 0.9 percent in September from 1.1 percent in August, the fourth consecutive monthly advance. From June to September, prices for foods and feeds rose at a 15.1 percent seasonally adjusted annual rate after falling at a 3.9 percent rate from March to June. In September, the rise in the index for prepared animal feeds slowed to 1.6 percent from 2.4 percent in the previous month. Prices for crude vegetable oils and for malt and malt by- products turned down after rising in the previous month. The index for confectionery materials fell more than a month earlier. Conversely, the index for natural and processed cheese turned up 3.2 percent after falling 0.7 percent in August. Prices for frozen ground meat patties also increased after declining a month earlier. The index for beef and veal fell less than in the prior month, and prices for dry milk products rose more than in August.

The index for nondurable manufacturing materials remained unchanged in September after falling 0.1 percent in the previous month. This index rose at a 0.9 percent seasonally adjusted annual rate from June to September, after increasing at a 13.2 percent rate in the preceding 3 months. In September, price increases for paper, miscellaneous basic organic chemicals, gray fabrics, and phosphates offset declines for plastic resins and materials, primary basic organic chemicals, nitrogenates, and intermediate basic organic chemicals.

Crude goods

The Producer Price Index for Crude Materials for Further Processing rose 1.9 percent, seasonally adjusted, after falling during the prior 2 months. This index declined at a 1.2 percent seasonally adjusted annual rate in the third quarter of 1995, compared with an 8.1 percent rate of increase from March to June. In September, the index for crude energy materials turned up, following 3 consecutive months of price declines. Prices for crude foodstuffs and feedstuffs rose more in September than in August. By contrast, the index for basic industrial materials fell more than in the previous month. (See table B.)

The index for crude energy materials rose 2.1 percent in September following a 4.1 percent decline in August. During the third quarter, prices for crude energy materials fell at a 26.3 percent seasonally adjusted annual rate after advancing at a 21.2 percent rate in the second quarter. Prices for natural gas and coal turned up in September after falling in the preceding month. The crude petroleum index rose more than in August.

The index for crude foodstuffs and feedstuffs rose 4.2 percent in September following a 0.7 percent increase in August. From June to September, this index increased at a 41.7 percent seasonally adjusted annual rate, after declining in each of the 6 preceding calendar quarters. In September, prices turned up after falling in the previous month for slaughter cattle, fresh and dried vegetables, and alfalfa hay. The index for corn rose more in September than a month earlier, and prices for soybeans advanced after showing no change in the previous month. In contrast, the index for slaughter broilers rose less than in August. Furthermore, prices for unprocessed finfish, fresh fruits and melons, and wheat all turned down following increases in the preceding month.

Prices for crude nonfood materials less energy fell 2.1 percent in September, the third consecutive monthly decline. This index dropped at a 17.8 percent seasonally adjusted annual rate in the third quarter after moving up at a 4.1 percent rate from March to June. In September, indexes for iron and steel scrap, aluminum base scrap, and copper ores all turned down after rising in August. In addition, the indexes for wastepaper and cattle hides fell more than in August. Conversely, the index for raw cotton turned up 7.9 percent after falling 11.5 percent in the previous month. Prices also increased in September after falling a month earlier for pulpwood logs, bolts, and timber. Prices fell much less than in the previous month for softwood logs, bolts, and timber.

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

Mining. The Producer Price Index for the net output of the domestic mining sector advanced 2.4 percent in September after decreasing 4.3 percent in the preceding month. (Net output price indexes are not seasonally adjusted.) From June to September, this index fell at a 20.3 percent annual rate following an increase at an 11.2 percent annual rate in the second quarter. In September, the oil and gas extraction industry group index turned up 3.6 percent following a 6.1 percent decrease in August. The index for the industry group for bituminous coal and lignite mining also moved up after declining a month earlier. Prices for the nonmetallic minerals mining group increased somewhat more than in the previous month. The metal mining industry group index fell about as much as in the previous month. In September, the Producer Price Index for total mining stood at 68.6 (December 1984=100), 5.2 percent lower than a year earlier.

Manufacturing. Prices received by producers for the net output of the domestic manufacturing sector edged down 0.1 percent in September, the fourth consecutive month of little or no change. During the third quarter, this index moved down at a 0.6 percent annual rate following an increase at a 3.6 percent annual rate in the second quarter. In September, a 1.5 percent decrease was registered for the industry group for transportation equipment. Other declines were for the industry groups for petroleum refining, primary metal industries, chemicals and allied products, and non- electrical machinery. Prices increased for the industry groups for lumber and wood products, paper and allied products, printing and publishing, furniture and fixtures, textile mill products, and for food and kindred products. The index for the net output of the domestic manufacturing sector stood at 124.3 in September (December 1984=100), 2.6 percent higher than a year earlier.

Other. Among other industries, the index for waste paper collection fell almost 20 percent, the fourth consecutive monthly decline. Prices also declined in September for metal scrap collection, passenger car rental, psychiatric hospitals, deep sea domestic transportation of freight, travel agencies, freight transportation arrangement, and electric power utilities. Prices advanced, however, for water transportation of freight not elsewhere classified, scheduled air transportation, farm product warehousing and storage, radio broadcasting, tugging and towing services, and non-local trucking.

Producer Price Index data for October 1995 are scheduled for release on Thursday, November 9, at 8:30 a.m. (E.S.T.)

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 initially computed 3/ Includes crude petrolem. after the publication of December indexes and are recalculated 4/ Excludes crude petroleum. after final December indexes are available. The first-published 5/ Percent of total finished goods. and final December relative importances initially appear, 6/ Pecent of total intermediate materials. respectively, in the release tables containing January and May data. 7/ Formerly titled "Crude materials for 2/ The indexes for May 1995 have been recalculated to incorporate further processing, excluding crude late reports and corrections by respondents. All indexes foodstuffs and feedstuffs, plant and are subject to revision four months after original publication. animal fibers, oilseeds, and leaf tobacco." 8/ Percent of total crude materials. 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/ The indexes for May 1995 have been recalculated 2/ Not seasonally adjusted. to incorporate late reports and corrections by respondents. 3/ Not available. All indexes are subject to revision four months after original publication.

1/ Data for May 1995 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, not seasonally adjusted