July 1996 Producer Price Index

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The Producer Price Index for Finished Goods remained unchanged in July, seasonally adjusted, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. This followed an increase of 0.2 percent in June and a 0.1-percent decline in May. Prices received by domestic producers of intermediate goods declined 0.3 percent after falling 0.5 percent in the previous month. The Crude Goods Price Index rose 1.2 percent after declining 2.3 percent in June. (See table A.)

Among finished goods in July, the index for finished consumer foods increased 0.2 percent after rising 1.6 percent a month ago. Prices for finished energy goods declined less than in June. The index for finished goods other than foods and energy rose 0.1 percent following a 0.2 percent advance in the prior month.

Before seasonal adjustment, the Producer Price Index for Finished Goods decreased 0.1 percent in July to 131.5 (1982=100). From July 1995 to July 1996, the Finished Goods Price Index rose 2.6 percent. During this same period, prices for finished consumer foods increased 4.0 percent, the index for finished energy goods advanced 5.3 percent, and prices for finished goods other than foods and energy were up 1.5 percent. Prices received by domestic producers of intermediate goods declined 0.2 percent during the 12 months ended in July 1996, and prices for crude materials moved up 11.6 percent over the same period. Finished goods The index for finished consumer foods advanced 0.2 percent in July after rising 1.6 percent in June. Prices for fresh fruits and melons dropped 15.4 percent after increasing 22.6 percent in the previous month. The index for pork also turned down after rising in June. Prices for dairy products, processed young chickens, and for beef and veal rose less than a month ago. By contrast, the index for fresh and dry vegetables turned up 2.3 percent after declining 5.4 percent in June. Prices for soft drinks and for finfish and shellfish rose more than in the previous month.

1996 Jan. -0.1 2.8 -0.3 2.2 -0.4 7.7 -0.2 7.2 Feb. -0.2 -1.3 -0.4 1.1 -0.7 5.9 -0.2 8.3 Mar. r0.0 r2.1 r-0.2 0.7 r0.1 r-2.5 r-2.3 r7.5 Apr. r2.0 r3.6 r-0.1 0.6 4.0 r8.2 r-0.4 10.3 May 3.7 0.4 0.2 0.7 6.3 -3.8 -0.3 12.8 June 1.3 -3.7 -0.1 0.3 1.4 -7.7 -1.4 9.4 July -0.1 -0.6 -0.3 -0.2 2.7 1.4 -1.6 11.6 r=revised. Some percent changes shown here and elsewhere in this release may differ from those previously reported because indexes for March 1996 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision four months after original publication. The index for consumer goods less foods and energy turned down 0.1 percent after moving up 0.3 percent in June. Prices for passenger cars turned down 0.9 percent following a 1.0-percent advance in the prior month. Indexes for gold jewelry and light trucks also turned down after rising in June. Prices for sanitary papers fell after showing no change a month ago. Indexes for prescription drugs, women's apparel, and for men's and boys' apparel rose less than in the previous month. By contrast, the index for textile housefurnishings rose 1.7 percent after rising 0.2 percent in June. Prices for over-the-counter drugs and floor coverings turned up after falling a month ago. The index for tobacco products rose after showing no change in June.

The index for finished energy goods moved down 0.9 percent in July following a 2.1-percent decline in June. Gasoline prices fell 2.8 percent after decreasing 7.4 percent in the previous month. Prices for heating oil and residential natural gas turned up after falling a month ago. By contrast, the index for residential electric power turned down 0.8 percent after rising 0.4 percent in June. Prices for finished lubricants fell more than a month ago.

The index for capital equipment turned up 0.3 percent following a 0.1 percent decline in June. This is the largest monthly increase in this index since November 1995. Prices for civilian aircraft rose 1.9 percent after increasing 0.1 percent a month ago. The indexes for electronic computers and heavy motor trucks turned up after falling in the previous month. Prices for communication and related equipment rose after showing no change in June. By contrast, the index for light motor trucks turned down 0.2 percent after rising 0.6 percent a month ago. Prices for construction machinery and for transformers and power regulators also fell after increasing in June.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components decreased 0.3 percent in July, seasonally adjusted, after declining 0.5 percent a month earlier. The index for energy goods fell less than in June. The index for nondurable manufacturing materials, however, declined after remaining unchanged in the previous month. Prices for durable manufacturing materials, construction materials, and for foods and feeds turned down after rising a month earlier. Excluding food and energy prices, the intermediate materials index fell 0.3 percent after declining 0.1 percent a month ago. (See table B.)

The decline in the index for intermediate energy goods slowed to 0.6 percent from 3.7 percent in June. The index for diesel fuel turned up 5.1 percent after falling 9.2 percent in the previous month. Prices for jet fuels and commercial natural gas also increased after declining a month earlier. Indexes for gasoline, industrial electric power, commercial electric power, and liquefied petroleum gas fell less than in June. In addition, prices for residual fuel rose more than a month ago. On the other hand, the rise in the index for liquid asphalt slowed to 3.8 percent from 9.2 percent in the prior month.

The index for nondurable manufacturing materials fell 0.8 percent after remaining unchanged a month earlier. The index for plastic resins and materials turned down 0.3 percent after rising 2.5 percent in the previous month. Prices for intermediate basic organic chemicals, miscellaneous basic organic chemicals, miscellaneous inorganic chemicals, and paint materials also declined after increasing in June. The index for paper fell more than in the previous month. By contrast, the rise in the index for woodpulp accelerated to 5.3 percent from 2.9 percent a month ago. Prices for synthetic fibers increased after remaining unchanged in the previous month.

The index for durable manufacturing materials turned down 0.9 percent after rising 0.2 percent a month earlier. The rise in the index for hot rolled steel sheet and strip slowed to 0.2 percent from 0.7 percent in the previous month. Prices for hot rolled steel bars, plates, and structural shapes also increased less than in June. The index for aluminum mill shapes fell more than a month ago. Conversely, the decline in the index for cold rolled steel sheets and strip slowed to 0.2 percent from 0.9 percent in June. Prices for copper, aluminum, and plywood also fell less than in the previous month. The index for flat glass turned up after falling a month ago.

The index for intermediate foods and feeds fell 0.1 percent after increasing 1.3 percent in the previous month. The index for pork turned down 3.3 percent after rising 3.2 percent a month earlier. Prices for refined sugar also fell after increasing in June. Indexes for beef and veal, fluid milk products, and dry milk products rose less than a month ago. In addition, prices for flour and crude vegetable oils fell more than in the previous month. On the other hand, the index for prepared animal feeds turned up 1.2 percent after falling 0.2 percent in June.

The index for construction materials turned down 0.1 percent after rising 0.4 percent in the previous month. The index for softwood lumber fell 3.2 percent after increasing 2.9 percent a month earlier. Prices for switchgear and non-fluid power metal valves also turned down after rising in June. The index for nonferrous wire and cable fell more than in the previous month. Indexes for millwork and concrete products rose less than a month ago. In addition, prices for gypsum products, heating equipment, and fabricated ferrous wire and cable remained unchanged after rising in the prior month. By contrast, the decline in the index for plywood slowed to 0.4 percent from 1.9 percent in June. Prices for asphalt felts and coatings turned up after falling a month earlier.

Crude goods

The Producer Price Index for Crude Materials for Further Processing turned up 1.2 percent in July, seasonally adjusted, after declining 2.3 percent in the previous month. Prices for crude energy materials increased after falling in June. The index for crude foodstuffs and feedstuffs rose more in July than a month earlier. By contrast, prices for basic industrial materials declined slightly more than in June. (See table B.)

In July, prices for crude energy materials rose 1.4 percent after falling 7.7 percent in the previous month. The index for natural gas increased 0.6 percent after dropping 12.5 percent in June (see the special note at the end of this release regarding future changes in this index). Prices for crude petroleum advanced 3.5 percent in July following a 5.3percent decline a month earlier. The index for coal fell less than a month ago.

Prices for crude foodstuffs and feedstuffs rose 2.7 percent in July after increasing 1.4 percent in the prior month. The index for corn turned up 11.1 percent after dropping 3.3 percent in June. Prices for slaughter hogs; soybeans; fresh vegetables, except potatoes; alfalfa hay; and slaughter turkeys also rose after falling a month earlier. Price declines for wheat slowed in July. By contrast, the index for slaughter broilers fell 7.4 percent after rising 18.4 percent in June. Prices for fresh fruits and melons fell 15.4 percent in July following a 22.6 percent increase in the previous month. The increase in the index for slaughter cattle slowed in July, and prices for Irish potatoes for processing fell after remaining unchanged in June.

The index for crude nonfood materials less energy fell 1.6 percent after declining 1.4 percent in June. Prices for copper ores dropped 17.6 percent in July after decreasing 2.2 percent a month earlier. The index for aluminum base scrap fell more than in June. Prices for wastepaper and cattle hides rose less than a month ago. By contrast, prices for iron and steel scrap declined 1.6 percent after dropping 3.2 percent. The indexes for copper base scrap and raw cotton fell less than in the prior month. Prices for pulpwood logs turned up after falling 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 increased 0.5 percent in July, after falling 6.5 percent in June. (Net output price indexes are not seasonally adjusted.) In July, prices for the oil and gas extraction industry group index turned up 2.0 percent, after declining 9.4 percent in the previous month. The index for the bituminous coal and lignite mining industry group continued to decline. By contrast, the index for the nonmetallic minerals mining industry group turned down after increasing in the previous month. Prices for the metal mining industry group fell more in July than in June. In July, the Producer Price Index for total mining stood at 78.6 (December 1984=100), 11.3 percent higher than a year earlier. Manufacturing. The Producer Price Index for total domestic manufacturing industries was unchanged in July, after moving down 0.2 percent in June. Price declines for the petroleum refining industry group slowed from 5.5 percent in June to 0.9 percent in July. Prices turned up after showing no change a month earlier for the industry groups for textile mill products, fabricated metal products, and tobacco manufactures. Prices continued to rise for the nonmetallic mineral products industry group. The index for the nonelectrical machinery group was unchanged after falling 0.3 percent in June. By contrast, prices turned down after increasing in June for the lumber and wood products and for the rubber and plastic products industry groups. Indexes fell more in July than in June for the industry groups for primary metal industries and leather products. Prices continued to decrease for the paper products and electrical machinery industry groups. Price increases slowed for the food products and apparel industry groups. In July the index for total manufacturing was 127.1 (December 1984=100), 2.2 percent above its year earlier level. Other. Among other industries, the index for passenger car rental advanced 14.7 percent after falling 7.7 percent in June. In July, prices also turned up, following declines or no change in the previous month, for linehaul railroad operations, general warehousing and storage, tugging and towing services, air passenger transportation, nonscheduled air transportation, airport and airport services, refined petroleum pipe lines, travel agencies, natural gas utilities, help supply agencies, advertising agencies, and for accounting, auditing, and bookkeeping. Price increases accelerated for trucking (except local), freight transportation along the Great Lakes, truck rental and leasing, and for skilled and intermediate care facilities. Prices declines slowed for water transportation of freight (not elsewhere classified), metal scrap collection, and for waste material collection other than metal and paper. By contrast, prices turned down in July, after rising or showing no change in June, for courier services (except by air), deep sea domestic transportation of freight, freight transportation arrangement, radio broadcasting, electric power utilities, operators of nonresidential buildings, and for other specialty hospitals. Prices rose less in July than in June for cable and other pay television services, recovered paper collection, and for hotels and motels. The index for local trucking without storage was unchanged in July after increasing in the previous month.

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Future Changes in Producer Price Indexes for Natural Gas

Effective with the release of data for August 1996, the 1-month lag in the PPI for Natural gas to pipelines, commodity code 05-31, will be eliminated. This index has reflected lagged data since its inception in 1967. This methodological revision is intended to improved the usefulness of the Natural gas series for analyzing current economic conditions. The PPI for Natural gas is a component of the crude materials stage-of-processing index

The August 1996 PPI for Natural gas to be released on September 12 will reflect the prices reported for this commodity as of the August 1996 PPI pricing date (the Tuesday of the week containing the 13th). At that time, the July 1996 PPI for Natural gas (as well as the affected July 1996 indexes for crude energy materials and crude materials for further processing) will be revised to eliminate the 1-month lag in pricing. Data prior to July will continue to represent natural gas prices with a 1-month lag. As a result of this revision, the July 1996 percent change for the Natural gas index will represent a two-month (May to July) price movement.

To permit interested data users to assess the impact of the change in pricing, the Bureau of Labor Statistics will make available, on request, estimates for the Natural gas series based on unlagged data for the period from August 1994 to August 1996.

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 Mar. 1996 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 March 1996 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. Table 3. Producer Price Indexes for selected commodity groupings (1982=100 unless otherwise indicated)

1/ Data for March 1996 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