April 1996 Producer Price Index

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The Producer Price Index for Finished Goods increased 0.4 percent in April, seasonally adjusted, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. This followed a 0.5-percent rise in March and a 0.2-percent decline in February. Prices received by domestic producers of intermediate goods moved up 0.3 percent in April, after increasing 0.2 percent in March. The Crude Goods Price Index advanced 5.3 percent after moving up 1.6 percent in March. (See table A.)

The rise in the April Finished Goods index was led by a rise in prices for energy goods. The index for finished goods other than foods and energy moved up 0.1 percent, the same as in both February and March. However, prices for consumer foods declined in April after rising in March.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.5 percent in April to 130.8 (1982 =100). From April 1995 to April 1996, the Finished Goods Price Index rose 2.5 percent. During this same period, consumer food prices increased 2.0 percent, prices for finished energy goods advanced 6.8 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 0.6 percent during the 12 months ended in April 1996, and crude material prices advanced 10.3 percent over the same period.

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

1996 Jan. r0.2 -0.2 r2.5 -0.1 2.3 0.1 r0.7 Feb. -0.2 -0.3 -0.7 0.1 2.0 -0.4 -0.7 Mar. 0.5 0.6 2.4 0.1 2.4 0.2 1.6 Apr. 0.4 -0.3 2.8 0.1 2.5 0.3 5.3 r=revised. Some percent changes shown here and elsewhere in this release may differ from those previously reported because indexes for December 1995 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision four months after original publication.

Finished goods

The Producer Price Index for finished energy goods advanced 2.8 percent in April, after rising 2.4 percent in March. Prices for home heating oil increased more rapidly in April (13.3 percent) than in March (10.5 percent). Prices for residential electric power and residential natural gas also increased somewhat more than they had in the previous month. Prices for gasoline rose 6.1 percent in April, slightly less than the 7.1 percent rise in March. Before seasonal adjustment, the April gasoline index rose 13.4 percent. (See special note at the end of the release regarding quality adjustment for gasoline.) The index for finished lubricants turned up 1.9 percent in April after moving down 0.3 percent in the previous month.

Prices for finished consumer foods moved down 0.3 percent in April, following a rise of 0.6 percent in March. The index for fresh and dry vegetables turned down 15.5 percent after rising 43.1 percent in the previous month. Prices also declined for dairy products, finfish and shellfish, roasted coffee, and eggs for fresh use after rising in March. Prices rose less than a month earlier for processed turkeys and pasta products. By contrast, beef and veal prices turned up 3.3 percent after falling 5.1 percent in the previous month. Prices also turned up in April for bakery products, shortening and cooking oils, processed young chickens, and milled rice. The indexes for pork, processed fruits and vegetables, and confectionery end products rose more than the prior month. The index for fresh fruits and melons fell 2.2 percent in April following a 2.5 percent decline in March.

The index for consumer goods other than foods and energy was unchanged in April, after inching up 0.1 percent in March. Price increases for sanitary papers, household appliances, newspaper circulation, and alcoholic beverages were offset by declines for cosmetics, over-the-counter drugs, periodical circulation, passenger cars, and for men's and boys' apparel.

In April, the capital equipment index increased 0.2 percent after inching down 0.1 percent in March. The index for commercial furniture turned up 0.5 percent after declining the same amount a month earlier. Prices for x-ray equipment also rose after declining in the previous month. The index for electronic computers fell less than a month earlier, and prices for construction machinery rose after remaining unchanged in March. By contrast, the index for heavy trucks turned down 0.3 percent after rising 1.0 percent a month earlier. Prices for civilian aircraft and for transformers and power regulators also declined after increasing a month earlier. The index for light trucks rose less than in March.

1996 Jan. 0.2 2.9 r-0.4 2.2 r-0.5 r3.4 r-0.4 5.5 Feb. -0.5 -1.3 -0.2 1.1 -0.5 -1.1 -0.5 4.2 Mar. 0.2 2.1 -0.2 0.7 0.1 5.9 -1.8 6.6 Apr. 1.9 3.5 -0.2 0.6 4.0 10.9 -0.5 10.3 r=revised. Some percent changes shown here and elsewhere in this release may differ from those previously reported because indexes for December 1995 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision four months after original publication.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components rose 0.3 percent in April, seasonally adjusted, following a 0.2- percent rise in March. Prices for energy materials, foods and feeds, and construction materials all rose in April. Partially offsetting these increases, the index for nondurable manufacturing declined. Prices for durable manufacturing materials remained unchanged in April. Excluding food and energy, intermediate materials prices fell 0.2 percent, the seventh straight monthly decline. (See table B.)

In April, the index for intermediate energy goods rose 3.5 percent, after rising 2.1 percent in the prior month. This acceleration was led by a 20.9-percent increase in the index for diesel fuel, which rose 4.9 percent in March. The indexes for jet fuels and industrial electric power also rose more than in March. Prices for liquefied petroleum gas turned up after falling a month earlier. By contrast, the index for residual fuel turned down 3.3 percent after rising 10.3 percent in the prior month. Prices for utility natural gas also turned down after rising in March. The index for commercial electric power rose less than in the previous month.

The index for intermediate foods and feeds rose faster in April (1.9 percent) than in March (0.2 percent). This acceleration was led by a 3.3- percent rise in beef and veal prices following a 5.1-percent decline in the prior month. The indexes for crude vegetable oils and flour also turned up in April. Prices for prepared animal feeds and pork rose more than in the previous month. By contrast, the index for fluid milk products rose only 0.2 percent following a 1.2-percent rise in March. The indexes for natural, processed, and imitation cheese and chips turned down in April. Prices for confectionery materials fell more than the previous month.

The index for construction materials rose 0.2 percent for the second consecutive month. The April rise was led by a 1.7-percent increase in the index for softwood lumber and a 0.6-percent increase in the index for plastic construction products. The indexes for millwork, concrete products, asphalt felts and coatings, nonferrous wire and cable, and for plumbing fixtures and brass fittings also rose in April. By contrast, prices for fabricated structural metal products fell 0.1 percent. In addition, the indexes for gypsum products, plywood, switchgear, heating equipment, and steel wire fell in April.

The index for nondurable manufacturing materials fell 0.8 percent for the second consecutive month. This decline was led by a 2.8-percent decrease in prices for paper. The indexes for woodpulp, paperboard, plastic resins and materials, intermediate basic organic chemicals, and fertilizer materials also fell. By contrast, prices for primary organic chemicals rose 4.7 percent. In addition, prices increased for finished fabrics, fluorinated hydrocarbons, and gray fabrics.

The index for durable manufacturing materials remained unchanged in April, after declining 0.2 percent a month earlier. The index for hot rolled steel bars, plates, and structural shapes rose 1.2 percent after falling 1.4 percent in March. The indexes for hot rolled steel sheet and strip, semifinished steel mill products, and flat glass also turned up in April. By contrast, the index for copper fell 3.3 percent after rising 5.3 percent in March. The indexes for aluminum mill shapes, copper and brass mill shapes, and hardwood lumber also turned down in April.

Crude goods

The Producer Price Index for Crude Materials for Further Processing rose 5.3 percent, seasonally adjusted, in April, after an increase of 1.6 percent in the previous month. Prices for both crude foodstuffs and feedstuffs and crude energy materials rose more than in March. The index for basic industrial materials fell less than in the previous month. (See table B.)

The index for crude foodstuffs and feedstuffs rose 4.0 percent in April, after an increase of 0.1 percent in the prior month. Prices for corn rose 13.8 percent in April, after advancing 4.0 percent a month earlier. Prices turned up in April for slaughter cattle, slaughter broilers, soybeans, and alfalfa hay following declines in the previous month. By contrast, the index for fresh vegetables except potatoes dropped 23.2 percent following a sharp increase of 69.6 percent in March.

The index for crude energy materials rose 10.9 percent in April, following a 5.9 percent increase a month earlier. The index for natural gas to pipelines increased 15.4 percent, after rising 5.9 percent in March. Prices for crude petroleum rose 14.3 percent in April, following an 8.5 percent increase in the previous month. By contrast, prices for coal turned down after rising in March.

The index for crude nonfood materials less energy fell 0.5 percent in April, after falling 1.8 percent in the prior month. April marked the tenth consecutive monthly decline for this index. Prices for raw cotton turned up 7.1 percent, after declining 9.1 percent in March. The index for iron and steel scrap also rose after falling in the prior month. The index for leaf tobacco registered no change after declining in March. By contrast, the index for softwood logs, bolts, and timber dropped 3.9 percent after a 0.3 percent rise in March. Prices for copper ores also fell in April after rising a month earlier. The index for wastepaper fell more than a month ago, and prices for copper base scrap turned down in April.

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

Mining. The Producer Price Index for the net output of total domestic mining industries advanced 8.5 percent in April after increasing 4.1 percent in March. (Net output price indexes are not seasonally adjusted.) Prices for the oil and gas extraction industry group jumped 12.7 percent after advancing 5.5 percent in the previous month. Prices continued to rise modestly for the nonmetallic minerals mining industry group. By contrast, the indexes for the metal mining and bituminous coal and lignite mining industry groups turned down after moving up in March. In April, the Producer Price Index for mining stood at 85.4 (December 1984=100).

Manufacturing. The Producer Price Index for total domestic manufacturing industries moved up 0.6 percent in April, after rising 0.3 percent in March. Prices for the petroleum refining industry group advanced 11.3 percent after increasing 6.2 percent in March. Prices turned up after falling a month earlier for the industry groups for food and kindred products, furniture and fixtures, and measuring instruments. Price declines slowed from March to April for the industry groups for paper and allied products, primary metal industries, and electrical machinery. By contrast, the indexes for the leather products and the tobacco manufactures industry groups moved down after increasing a month earlier. Prices for the nonelectrical machinery industry group moved down slightly more than they had in March.

Other. Among other industries, prices for waste paper collection continued their long downward trend, decreasing 16.6 percent in April. Prices turned down or showed no change after rising a month earlier for crude petroleum pipe lines, travel agencies, tugging and towing services, nonlocal trucking, natural gas utilities, building cleaning and maintenance services, passenger car rental, offices and clinics of doctors of medicine, and other specialty hospitals. Price increases slowed for air passenger transportation; airports and airport services; freight transportation arrangement; advertising agencies; and accounting, auditing, and bookkeeping services. The index for water transportation of freight, not elsewhere classified fell more in April than in March. Prices continued to fall for truck rental and leasing.

By contrast, prices turned up in April after falling or showing no change in March for local trucking without storage; nonair courier services; air cargo transportation; telephone communications, except radiotelephone; cable and other pay television services; ferrous metal scrap collection; operators of nonresidential buildings; psychiatric hospitals; and medical laboratories. Price increases accelerated for nonferrous metal scrap collection, skilled and intermediate care facilities, and hotels and motels. Prices continued to rise for electric power utilities.

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Quality Adjustment for Gasoline

A quality adjustment has been made for gasoline prices in the April PPI to account for the effects of the mandated changes to gasoline in California. Without quality adjustment, the gasoline index would have risen approximately 0.6 percentage point more than the published rise of 6.1 percent. For more details, see "Quality Adjustment for Changes to Gasoline Resulting from the California Air Resources Board (CARB) Requirements Effective March 1, 1996" in the April 1996 issue of our monthly detailed report, Producer Price Indexes. To receive an advance copy of this article, please contact our Section of Index Analysis and Public Information at 202-606-7705.