August 1996 Producer Price Index

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The Producer Price Index for Finished Goods advanced 0.3 percent in August, seasonally adjusted, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. For July, the index registered no change, which followed a 0.2-percent increase in June. Prices received by domestic producers of intermediate goods rose 0.2 percent in August after declining 0.3 percent in the prior month. The Crude Goods Price Index rose 0.2 percent following a 2.0-percent increase in July. (See table A.)

Among finished goods in August, prices for energy turned up after falling in July. The index for finished consumer foods rose more in August than a month earlier. By contrast, prices for finished goods other than foods and energy fell 0.1 percent after rising 0.1 percent in July.

Change in Except finished Inter- goods foods from 12 mediateCrude and months Month Total Foods Energy energy ago goods goods (unadj.) 1995 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

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.3 percent in August to 131.9 (1982=100). From August 1995 to August 1996, the Finished Goods Price Index rose 3.0 percent. During this same period, prices for finished consumer foods increased 5.1 percent, the index for finished energy goods advanced 6.4 percent, and prices for finished goods other than foods and energy were up 1.4 percent. Prices received by domestic producers of intermediate goods remained unchanged during the 12 months ended in August 1996, and prices for crude materials rose 13.9 percent over the same period.

Finished Goods

The Producer Price Index for finished energy goods rose 0.7 percent in August after dropping 0.9 percent in the previous month. Prices for gasoline increased 0.9 percent after falling 2.8 percent in July. The indexes for residential electric power and finished lubricants also rose after falling in the prior month. By contrast, prices for residential natural gas increased 0.7 percent following a 1.4-percent gain in July. The index for heating oil also rose less than in the prior month.

Prices for finished consumer foods rose 1.0 percent in August after advancing 0.2 percent in the previous month. Prices for pork rose 8.7 percent following a decline of 3.3 percent in July. The indexes for fresh fruits and melons, eggs for fresh use, and for shortening and cooking oils also turned up after declining a month ago. Prices for beef and veal rose more than in July. By contrast, the index for fresh and dry vegetables fell 11.9 percent in August after rising 2.3 percent in the previous month. The indexes for finfish and shellfish and for young chickens also declined after increasing in July.

The index for consumer goods less foods and energy registered no change in August following a drop of 0.1 percent a month earlier. Price increases for sanitary paper products, alcoholic beverages, tires and tubes, floor coverings, sporting goods, and newspaper circulation were offset by declines for prescription drugs, passenger cars, book publishing, women's apparel, men's and boys' apparel, and light trucks.

Prices for capital equipment turned down 0.1 percent in August after rising 0.3 percent in the previous month. The index for civilian aircraft dropped 0.3 percent after rising 1.9 percent in July. Prices also turned down after rising in the prior month for electronic computers and for communications and related equipment. Price increases slowed in August for heavy motor trucks. By contrast, the index for ships rose 0.7 percent after falling 0.2 percent in July. Prices for agricultural machinery rose 0.3 percent in August after registering no change a month earlier. The indexes for x-ray and electromedical equipment, and for construction machinery and equipment advanced after declining in July.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 0.2 percent in August, seasonally adjusted, after declining 0.3 percent a month earlier. The indexes for energy goods, nondurable manufacturing materials, construction materials, and for foods and feeds turned up after falling in June. Prices for durable manufacturing materials fell less than in the previous month. Excluding food and energy prices, the intermediate materials index turned up 0.1 percent after falling 0.3 percent a month earlier. (See table B.)

The index for intermediate energy goods rose 0.9 percent after declining 0.6 percent in July. The index for industrial electric power turned up 0.5 percent after falling 2.2 percent in the previous month. Prices for gasoline and commercial electric power also increased after declining a month earlier. The index for liquefied petroleum gas rose after remaining unchanged in July. In addition, prices for jet fuels rose more than a month ago. On the other hand, the index for diesel fuel remained unchanged after rising 5.1 percent in the prior month. Prices for residual fuel and liquid asphalt turned down after increasing in the previous month.

The index for nondurable manufacturing materials rose 0.3 percent after falling 0.8 percent a month earlier. The index for miscellaneous basic organic chemicals turned up 0.9 percent after declining 2.0 percent in the previous month. Prices for both intermediate basic organic chemicals and for plastic resins and materials also increased after falling a month earlier. The indexes for paperboard, paper, and miscellaneous inorganic chemicals declined less than in the previous month. By contrast, the rise in the index for woodpulp slowed to 2.3 percent from 5.3 percent a month ago. Prices for synthetic fibers remained unchanged after increasing in the previous month.

The index for construction materials turned up 0.3 percent after falling 0.1 percent a month earlier. The index for softwood lumber rose 4.3 percent after declining 3.2 percent in the previous month. The index for plywood also turned up after falling in July. Prices for gypsum products increased after remaining unchanged a month earlier. The index for nonferrous wire and cable fell less than a month ago, and prices for millwork rose more than in July. Conversely, the index for plastic construction products turned down 0.5 percent after rising 0.8 percent in the previous month. Prices for asphalt felts and coatings and for plumbing fixtures and brass fittings also declined after increasing a month ago.

The decline in the index for durable manufacturing materials slowed to 0.6 percent from 0.9 percent in the previous month. The index for copper turned up 0.5 percent after falling 13.8 percent a month earlier. Prices for cold rolled steel sheet and strip and for building paper and board also rose after decreasing in July. The index for hot rolled steel sheet and strip rose more than a month ago. In addition, prices for copper and brass mill shapes fell less than in the previous month. On the other hand, the index for aluminum mill shapes declined 1.9 percent after falling 0.5 percent in July. Prices for flat glass turned down after rising a month earlier and the index for aluminum declined after remaining unchanged a month ago.

The index for intermediate foods and feeds turned up 0.2 percent after falling 0.1 percent in the previous month. The index for pork rose 8.7 percent after decreasing 3.3 percent a month earlier. Prices for crude vegetable oils and confectionery materials also turned up after falling in July. The indexes for beef and veal and for natural and processed cheese rose more than a month ago. By contrast, the index for prepared animal feeds turned down 0.1 percent after increasing 1.2 percent in the previous month. Prices for fluid milk products and for condensed and evaporated milk also decreased after rising in the prior month.

Crude goods

The Producer Price Index for Crude Materials for Further Processing rose 0.2 percent in August, seasonally adjusted, after increasing 2.0 percent in the previous month. The index for crude foodstuffs and feedstuffs turned down in August after rising a month earlier. Prices for crude energy materials rose less than in July. By contrast, the index for basic industrial materials turned up after falling a month ago. (See table B.)

Prices for crude foodstuffs and feedstuffs turned down 0.3 percent after rising 2.7 percent in the prior month. The index for corn fell 3.8 percent following an 11.1-percent increase in July. Prices for slaughter cattle remained unchanged after gaining 5.2 percent a month ago. The indexes for fresh and dry vegetables, slaughter turkeys, and unprocessed finfish turned down after rising in the previous month. Prices for wheat fell more than in July. By contrast, the index for soybeans advanced 11.4 percent following a 1.2-percent increase a month ago. Prices for slaughter broilers fell less than in July. The indexes for fresh fruits and melons and for raw cane sugar turned up after falling in the prior month. Prices for slaughter hogs rose more than a month ago.

Prices for crude energy materials rose 0.7 percent after increasing 3.9 percent in the previous month. The index for natural gas declined 1.2 percent after rising 6.6 percent in July (see the special note at the end of this release regarding changes in this index). The index for crude petroleum advanced 3.2 percent after rising 3.5 percent a month earlier. Conversely, prices for coal turned up 0.1 percent after falling 0.7 percent a month ago.

The index for crude nonfood materials less energy turned up 0.1 percent after falling 1.6 percent in July. Prices for copper ores declined 8.2 percent after dropping 17.6 percent in the prior month. The indexes for aluminum base scrap, gold ores, raw cotton, and for softwood logs, bolts, and timber rose after falling a month ago. Prices for iron and steel scrap remained unchanged after falling in July. By contrast, the index for pulpwood rose 0.3 percent following a 2.2-percent increase in the previous month. Prices for construction sand, gravel, and crushed stone also rose less than in the prior month. The index for phosphates fell more than 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 rose 0.5 percent in August, the same as in July. (Net output price indexes are not seasonally adjusted.) Price increases for the industry groups for oil and gas extraction and for the mining of gold ores outweighed declines for the industry groups for mining of copper ores and nonmetallic minerals mining. In August, the Producer Price Index for total mining stood at 80.4 (December 1984=100), 18.9 percent higher than a year earlier.

Manufacturing. The Producer Price Index for total domestic manufacturing industries moved up 0.2 percent in August, after showing no change in July. The industry group for petroleum refining turned up 1.0 percent, following a 0.9-percent decline in the previous month. Prices also turned up after falling in July for lumber and wood products, chemicals and allied products, leather products, and electrical machinery. Price increases accelerated for the industry groups for food and kindred products and textile mill products. Price declines slowed from July to August for the industry groups for paper and primary metal industries. By contrast, prices turned down after edging up in July, for the apparel industry group. The index for the industry group for nonmetallic minerals products rose less than a month earlier. The index for total manufacturing was 127.4 (December 1984=100), 2.4 percent higher than a year ago.

Other. Among other industries, prices for passenger car rental fell 3.3 percent in August, after moving up 14.7 percent in the previous month. Prices also turned down after increasing in July for non-local trucking, tugging and towing services, air passenger transportation, nonscheduled air transportation, airports and airport services, crude petroleum pipelines, travel agencies, and for truck rental and leasing. Price increases slowed for freight transportation along the Great Lakes, refined petroleum pipelines, skilled and intermediate care facilities, and for accounting services. The index for water transportation of freight (not elsewhere classified) fell more than in July. By contrast, prices turned up after falling in the previous month for radio broadcasting, electric power utilities, and for operators of non-residential buildings. Price increases accelerated for marine cargo handling and collection of recovered paper. Indexes fell less than in July for freight transportation arrangement, metal scrap collection, and other specialty hospitals.

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Natural Gas Index Revised

Effective with the release of data for August 1996, the 1-month lag in the PPI for Natural Gas, commodity code 05-31, has been eliminated. This index, which is included in the crude stage of processing only, has had a 1-month lag since its inception in 1967.

The August PPI for Natural Gas reflects the change in prices reported for this commodity between the July and August PPI pricing dates. Concurrent with the August release, the July 1996 PPI for Natural Gas, as well as all other affected July 1996 indexes, have been revised to eliminate the 1-month lag in pricing reflected in the first-published July Natural Gas index. Therefore, the revised July 1996 percent changes in the Natural Gas and other affected indexes represent a two-month (May to July) price movement.

The table below shows first-published and revised percent changes for selected July indexes on a seasonally adjusted basis. A more complete list can be found in the August 1996 edition of the PPI Detailed Report.

Index First-published Revised

Crude Materials for 1.2 2.0 further processing Crude Energy Materials 1.4 3.9 Natural Gas 0.6 6.6

To permit interested 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, commodity code 05-31, 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 Apr. 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 April 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 April 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