June 1996 Producer Price Index

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The Producer Price Index for Finished Goods increased 0.2 percent in June, seasonally adjusted, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. This followed a decrease of 0.1 percent in May and a 0.4-percent rise in April. Prices received by domestic producers of intermediate goods declined 0.5 percent after rising the same amount in the previous month. The Crude Goods Price Index fell 2.3 percent after increasing 1.3 percent in May. (See table A.)

Among finished goods in June, the index for finished consumer foods moved up 1.6 percent, after showing no change a month ago. Prices for energy goods declined more than in May. The index for finished goods other than foods and energy increased 0.2 percent following no change in the prior month.

Change in Except finished Inter- goods foods from 12 mediateCrude and months Month Total Foods Energy energy ago goods goods (unadj.) 1995 June -0.2 -0.3 -1.1 0.1 2.1 0.1 0.9 July 0 0.9 -1.9 0.2 1.7 0.1 -0.7 Aug. 0.1 0.1 -0.3 0.1 1.3 0.1 -1.4 Sept. 0.3 1.2 -0.5 0.2 1.8 -0.2 1.9 Oct. 0.2 -0.1 -0.1 0.3 2.3 0 0.1 Nov. 0.3 1.1 -1.0 0.4 2.1 -0.1 1.6 Dec. 0.6 0.1 3.8 0.1 2.3 0.2 1.6

may differ from those previously reported because indexes for February 1996 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 1996, the Finished Goods Price Index rose at a seasonally adjusted annual rate of 2.2 percent after increasing at a 3.0-percent rate in the latter half of 1995. In the first half of 1996, prices for consumer foods rose at a 2.8 percent annual rate, following a 6.5-percent rate of increase in the second half of 1995. The index for finished goods less foods and energy rose at a 0.7-percent rate for the first half of 1996 after increasing at a 2.6-percent annual rate from June to December 1995. By contrast, prices for finished energy goods turned up at an 8.5-percent annual rate in the first 6 months of 1996, following a 0.3-percent rate of decline in the previous 6 months. The Intermediate Goods Price Index edged up at a 0.3-percent rate, about the same rate as in the last 6 months of 1995. The Crude Goods Price Index rose at a 12.2- percent rate from December 1995 to June 1996, after increasing at a 6.3- percent rate in the prior 6 months.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.5 percent in June to 131.6 (1982=100). From June 1995 to June 1996, the Finished Goods Price Index rose 2.7 percent. During this same period, prices for consumer foods increased 4.6 percent, the index for finished energy goods advanced 4.1 percent, and prices for finished goods other than foods and energy were up 1.6 percent. Prices received by domestic producers of intermediate goods edged up 0.3 percent during the 12 months ended in June 1996, and prices for crude materials moved up 9.4 percent over the same period.

Finished goods

Prices for finished consumer foods advanced 1.6 percent in June, after showing no change in May. In June, prices for beef and veal rose 5.6 percent after decreasing 2.2 percent in the previous month. Prices also turned up after falling a month earlier for finfish and shellfish, eggs for fresh use, soft drinks, and pasta products. The indexes for fresh and dry vegetables and roasted coffee fell less than in the previous month. Price increases accelerated for fresh fruits and melons, dairy products, and processed young chickens. By contrast, pork prices increased 3.2 percent, following an 8.6-percent rise in May. The indexes for confectionery end products and for processed fruits and vegetables rose less than in the prior month. Prices turned down after rising a month earlier for shortening and cooking oils and milled rice. The index for ready-to-serve breakfast cereals fell more than in the previous month.

The index for consumer goods other than foods and energy moved up 0.3 percent in June, after edging up 0.1 percent in May. From December 1995 to June 1996, this index increased at a 1.1-percent seasonally adjusted annual rate, compared with a 2.8-percent rate of increase in the latter half of 1995. In June, the index for passenger cars rose 1.0 percent, following a 0.3-percent advance in May. Price increases also accelerated for prescription drugs, men's and boys' apparel, mobile homes, footwear, and books. Prices turned up after falling in May for alcoholic beverages, women's apparel, newspapers, light trucks, and gold jewelry. The index for sanitary papers was unchanged after declining a month earlier. By contrast, the index for tobacco products was unchanged after rising 3.2 percent in May. Prices for tires and tubes also showed no change, following an increase in the prior month. The indexes for over-the-counter drugs and floor coverings turned down after rising a month ago. Price increases slowed in June for periodicals and household furniture.

The index for finished energy goods moved down 2.1 percent in June, following a 0.6-percent decline in May. Gasoline prices fell 7.4 percent after showing no change in the previous month. Heating oil prices fell 11.4 percent after declining 7.3 percent a month ago. By contrast, the index for residential electric power increased 0.4 percent after inching up 0.1 percent in May. Price declines slowed for residential natural gas and finished lubricants.

In June, the capital equipment index fell 0.1 percent for the second consecutive month. This index inched down at a 0.1-percent seasonally adjusted annual rate in the first half of 1996, after increasing at a 2.4- percent rate in the last half of 1995. In June, price declines for electronic computers and heavy motor trucks more than offset increases for light motor trucks, civilian aircraft, construction machinery, printing trades machinery, agricultural machinery, machine tools, and oil and gas field machinery.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components decreased 0.5 percent in June, seasonally adjusted, after increasing the same amount a month earlier. The index for energy goods turned down after rising in May. Prices for foods and feeds, durable manufacturing materials, and construction materials rose less than in the previous month. The index for nondurable manufacturing materials remained unchanged after rising a month earlier. Excluding foods and energy prices, the intermediate materials index fell 0.1 percent after rising 0.2 percent a month ago. (See table B.)

The index for intermediate energy goods turned down 3.7 percent after rising 0.4 percent in May. This index advanced at a 7.9-percent seasonally adjusted rate in the first half of 1996, after remaining unchanged in the final half of 1995. In June, the index for industrial electric power turned down 4.0 percent after rising 3.2 percent in the previous month. Jet fuel prices also declined after increasing a month earlier. The index for gasoline fell after remaining unchanged in May. Prices for diesel fuel and commercial electric power decreased more than a month ago. In addition, the index for residual fuel rose less than in the preceding month. By contrast, the decline in the index for commercial natural gas slowed to 0.6 percent in May from 2.9 percent in the prior month, and prices for petroleum coke turned up after falling a month earlier.

The rise in the index for intermediate foods and feeds slowed to 1.3 percent from 3.7 percent a month earlier. This index rose at a 14.4- percent seasonally adjusted annual rate during the first 6 months of 1996 after increasing at a 21.8-percent rate from June to December 1995. In June, the index for flour turned down 4.7 percent after rising 14.9 percent in the previous month. Prices for prepared animal feeds and crude vegetable oils also declined after increasing in May. The index for pork rose less than in the previous month. By contrast, the index for beef and veal turned up 5.6 percent after falling 2.2 percent a month ago. Prices for refined sugar also increased after declining in the previous month. The indexes for fluid milk products and butter rose more than a month earlier.

The rise in the index for durable manufacturing materials slowed to 0.2 percent in June from 1.0 percent a month earlier. Prices for this category decreased at a 1.3-percent seasonally adjusted annual rate during the first 6 months of 1996 after falling at a 3.8-percent rate during the last 6 months of 1995. In June, the index for copper fell 16.7 percent following a 9.1 percent increase in the previous month. Prices for copper and brass mill shapes, plywood, cold rolled steel sheet and strip, and aluminum also turned down after rising in May. Conversely, the index for hot rolled steel sheet and strip turned up 0.7 percent after falling 0.1 percent a month ago. Prices for prepared paint also increased after declining in May. The index for flat glass fell less than in the previous month.

The index for construction materials rose 0.4 percent after increasing 0.7 percent in the previous month. From December 1995 to June 1996, this index advanced at a 2.4-percent seasonally adjusted annual rate after climbing at a 0.3-percent rate in the latter half of 1995. In June, the rise in the index for softwood lumber slowed to 2.9 percent from 8.1 percent a month earlier. Prices for fabricated structural metal products and millwork also rose less than in May. The indexes for plywood and nonferrous wire and cable turned down after rising a month ago. In addition, prices for asphalt felts and coatings fell after remaining unchanged in the previous month. On the other hand, the index for plastic construction products turned up 0.8 percent after falling 0.2 percent in May. Prices for concrete products and gypsum products rose more than in the prior month.

The index for nondurable manufacturing materials remained unchanged in June after rising 0.2 percent in the previous month. This index declined at a 5.6-percent seasonally adjusted annual rate during the first 6 months of 1996 after falling at a 4.2-percent rate in the second half of 1995. In June, the rise in the index for miscellaneous basic organic chemicals slowed to 0.2 percent from 3.4 percent in the previous month. Prices for intermediate basic organic chemicals and inedible fats and oils also rose less than in May. The index for primary basic organic chemicals turned down after rising a month ago. By contrast, paper price declines slowed to 0.6 percent from 3.8 percent in the prior month. Prices for woodpulp and for processed yarns and threads turned up after falling in May. The index for plastic resins and materials rose more than a month earlier.

Crude goods

The Producer Price Index for Crude Materials for Further Processing fell 2.3 percent in June, seasonally adjusted, following a 1.3-percent increase in the prior month. In June, prices for crude foodstuffs and feedstuffs rose less than in the previous month. The indexes for crude energy materials and basic industrial materials fell more than in May. (See table B.)

Prices for crude foodstuffs and feedstuffs rose 1.4 percent, following a 6.3-percent increase a month earlier. This index rose at a 23.1-percent seasonally adjusted annual rate for the first half of 1996, following a 27.6-percent rate of increase for the last half of 1995. In June, the index for corn turned down 3.3 percent after rising 15.7 percent a month earlier. Prices for slaughter hogs, wheat, soybeans, and alfalfa hay turned down after rising in May. By contrast, prices for slaughter cattle rose 6.3 percent, following a 1.1-percent increase in the prior month. The indexes for slaughter broilers and fluid milk also rose more than in May. Prices for fresh and dry vegetables fell less than a month ago.

The index for crude energy materials declined 7.7 percent after falling 3.8 percent in May. This index increased at a 14.0-percent seasonally adjusted annual rate for the first half of 1996, following a 2.8- percent rate of increase for the last half of 1995. In June, prices for natural gas to pipelines fell 12.5 percent, following a 2.8-percent drop in the prior month. The index for coal turned down after rising in May. By contrast, prices for crude petroleum fell 5.3 percent after declining 7.3 percent a month ago.

The index for crude nonfood materials less energy fell 1.4 percent, following a 0.3-percent decline in May. This index fell at a 9.2-percent seasonally adjusted annual rate for the first 6 months of 1996, following an 18.0-percent rate of decrease for the last half of 1995. In June, prices for iron and steel scrap turned down 3.2 percent after rising 1.6 percent a month ago. The indexes for nonferrous metal scrap, copper ores, and for softwood logs, bolts, and timber turned down after rising in the prior month. By contrast, prices for wastepaper rose 13.0 percent after increasing 0.2 percent in May. The index for raw cotton fell less than a month ago. Prices for cattle hides turned up after falling in May, and the index for hardwood logs, bolts, and timber remained unchanged after declining in the prior month.

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

Mining. The Producer Price Index for the net output of total domestic mining industries fell 6.5 percent in June, after decreasing 2.1 percent in May. (Net output price indexes are not seasonally adjusted.) During the first half of 1996, this index rose at an annual rate of 11.4 percent, after rising at a 3.6-percent rate in the last half of 1995. In June, prices for the oil and gas extraction industry group index moved down 9.4 percent, after declining 3.6 percent in the previous month. Prices for the industry groups for bituminous coal and lignite mining and metal mining both turned down after increasing a month earlier. Price increases for the nonmetallic mineral products industry group slowed significantly from May to June. By contrast, the index for the anthracite mining industry group was unchanged after decreasing in the previous month. In June, the Producer Price Index for total mining stood at 78.2 (December 1984=100), 7.4 percent higher than a year earlier.

Manufacturing. The Producer Price Index for total domestic manufacturing industries moved down 0.2 percent in June, after rising 0.4 percent in May. From December 1995 to June 1996, this index increased at a 2.9-percent annual rate, after rising at a 1.5-percent rate in the latter half of 1995. The index for the petroleum refining industry group turned down 5.5 percent in June, after increasing 1.7 percent in May. Prices also fell, after increasing a month earlier for the industry groups for leather products and primary metal industries. Prices for tobacco manufactures were unchanged after rising sharply in May. Prices rose less rapidly than in the previous month for lumber and wood products and chemicals. By contrast, prices turned up after falling a month earlier for the industry group for measuring instruments. Price declines slowed for the paper and allied products industry group. The index for food and kindred products rose 1.0 percent for the second consecutive month. In June the index for total manufacturing was 127.1 (December 1984=100), 2.2 percent above its year- earlier level.

Other. Among other industries, prices for waste paper collection increased 9.8 percent, after decreasing in each of the 4 previous months. Indexes also turned up, following declines in May, for farm products warehousing and storage, freight transportation along the Great Lakes, marine cargo handling, truck rental and leasing, and other specialty hospitals. Price increases accelerated for freight transportation arrangement, radio broadcasting, electric power utilities, operators of nonresidential buildings, and for hotels and motels. Indexes fell less in June than in May for water transportation of freight, not elsewhere classified, and natural gas utilities.

By contrast, the index for metal scrap collection fell 4.6 percent, after rising 1.2 percent a month earlier. Prices also turned down in June, following increases in May, for general warehousing and storage, tugging and towing services, scheduled air passenger transportation, airports and airport services, travel agencies, and help supply services. Price increases slowed in June for cable and other pay television services, real estate agents and managers, and for skilled and intermediate care facilities. Prices fell more than in the previous month for line-haul railroad operations, advertising agencies, and passenger car rental, without drivers. The index for air courier services was unchanged after rising in May and prices for nonscheduled air transportation moved down after showing no change in each of the previous 2 months.

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