September 1996 Producer Price Index

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

The Producer Price Index for Finished Goods advanced 0.2 percent in September, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This followed an increase of 0.3 percent in August and no change in July. Prices received by domestic producers of intermediate goods rose 0.3 percent in September after increasing 0.2 percent in the prior month. The Crude Goods Price Index fell 1.5 percent following a 0.2-percent increase in August. (See table A.)

Among finished goods, increases were registered in September for finished goods less food and energy, finished consumer foods, and finished energy goods. The index for finished goods less foods and energy turned up 0.3 percent after declining 0.1 percent a month earlier. This rise was led by increases in the indexes for passenger cars and light trucks (on a seasonally adjusted basis).

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

During the third quarter of 1996, prices received by domestic producers of finished goods advanced at a 2.2-percent seasonally adjusted annual rate, slightly more than the 1.9-percent rate posted in the second quarter. The index for finished consumer foods rose at a 6.1-percent seasonally adjusted annual rate after increasing at a 4.9-percent rate in the previous 3 months. Prices for finished energy goods advanced at a 0.5- percent rate from June to September after remaining unchanged from March to June. The index for finished goods other than foods and energy rose at a 1.1-percent seasonally adjusted rate in the third quarter after increasing at a 1.7-percent rate in the second quarter. Prices for intermediate goods edged up at a 0.6-percent annual rate in the 3 months ended September, after increasing at a 1.6-percent rate in the previous 3-month period. The index for crude materials for further processing rose at a 2.9-percent seasonally adjusted annual rate from June to September after increasing at a 14.3-percent rate from March to June.

Before seasonal adjustment, the Producer Price Index for Finished Goods declined 0.2 percent in September to 131.6 (1982=100). From September 1995 to September 1996, the Finished Goods Price Index rose 2.9 percent. During this same period, prices for finished energy goods increased 7.1 percent, the index for finished consumer foods advanced 4.2 percent, and prices for finished goods other than foods and energy were up 1.4 percent. Prices received by domestic producers of intermediate goods increased 0.5 percent during the 12 months ended in September, and the index for crude materials rose 10.2 percent over the same period.

Finished goods

The Producer Price Index for finished consumer goods less food and energy increased 0.2 percent in September after being unchanged in the previous month. This index increased at a 0.6-percent seasonally adjusted annual rate in the third quarter after rising at a 2.5-percent rate from March to June. In September, the index for passenger cars turned up 1.2 percent after seasonal adjustment following a 0.2-percent decline in the prior month. (The index for passenger cars declined 2.4 percent in September before seasonal adjustment.) Prices for prescription drugs, light trucks, book publishing, and women's apparel also increased after declining in August. The index for girls' apparel rose after being unchanged a month ago. By contrast, the index for sanitary papers turned down 1.0 percent after rising 0.6 percent in the previous month. Prices for tobacco products, cosmetics, and periodical circulation fell more than a month earlier. The index for alcoholic beverages was unchanged after rising in August.

The index for capital equipment turned up 0.3 percent after falling 0.1 percent in the previous month. From June to September, this index rose at a 2.0-percent seasonally adjusted annual rate after declining at a 0.3- percent rate in the second quarter. In September, the index for light trucks turned up 1.3 percent after falling 0.2 percent a month ago. Prices for civilian aircraft, communication and related equipment, and for transformers and power regulators also increased after declining in August. The index for electronic computers fell less than in the previous month. In addition, prices for heavy trucks and construction machinery and equipment rose more than in the prior month. Conversely, the rise in the index for ships slowed to 0.1 percent from 0.7 percent a month earlier. Prices for office and store machines and equipment and for x-ray and electromedical equipment turned down after rising in August. The index for commercial furniture declined after remaining unchanged in the previous month.

The rise in the index for finished consumer foods slowed to 0.2 percent from 1.0 percent in August. This index increased at a 6.1-percent seasonally adjusted annual rate in the third quarter after rising at a 4.9- percent rate in the previous 3 months. In September, the index for pork turned down 7.5 percent after rising 8.7 percent in the prior month. Prices for beef and veal and eggs for fresh use rose less than in the previous month. The index for bakery products remained unchanged after rising in August. On the other hand, the rise in the index for fresh fruits and melons accelerated to 24.6 percent from 1.7 percent a month ago. Prices for dairy products also increased more than a month earlier. Indexes for fresh and dry vegetables and for finfish and shellfish fell less than in the previous month. In addition, prices for processed fruits and vegetables and roasted coffee turned up after falling in August.

The rise in the index for finished energy goods slowed to 0.2 percent from 0.7 percent in the previous month. From June to September, this index increased at a 0.5- percent seasonally adjusted annual rate after remaining unchanged from March to June. In September, the index for residential natural gas turned down 2.1 percent after rising 0.7 percent a month earlier. Prices for home heating oil rose less than a month ago. The index for finished lubricants was unchanged after rising 1.9 percent in August. The rise in the index for residential electric power, however, accelerated to 0.4 percent from 0.1 percent in the prior month. Prices for gasoline increased 0.9 percent for the second consecutive month.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 0.3 percent, seasonally adjusted, in September after rising 0.2 percent in August. The indexes for energy goods, materials for both durable and nondurable manufacturing, construction materials, and intermediate foods and feeds all registered gains in September. Excluding food and energy goods, prices for intermediate materials rose 0.1 percent in September. This index declined at a 0.3-percent seasonally adjusted annual rate in the third quarter, after remaining unchanged in the previous 3-month period. (See table B).

In September, prices for intermediate energy goods increased 0.8 percent after rising 0.9 percent a month earlier. This index rose at a seasonally adjusted annual rate of 4.6 percent in the third quarter, after moving up at a 0.9-percent rate in the second quarter. In September, price increases for jet fuels, electric power, gasoline, diesel fuel, and liquefied petroleum gas outweighed declines for utility natural gas and liquid asphalt.

The index for durable manufacturing materials rose 0.6 percent in September, after declining the same amount in August. This index fell at a seasonally adjusted annual rate of 3.6 percent from June 1996 to September 1996, after rising at a 4.7-percent rate in the second quarter. In September, the decline in the price for aluminum mill shapes slowed to 0.4 percent from 1.9 percent a month earlier. The indexes for both copper and brass mill shapes and aluminum also fell less than a month ago. The price for plywood rose more than in August, and the index for flat glass turned up after falling in the previous month. By contrast, the index for cold rolled steel sheets and strip edged up 0.1 percent, following a rise of 1.2 percent in August. Price increases for hot rolled steel sheet and strip also slowed in September from the previous month. The indexes for both copper and gold declined after advancing in August.

Prices for nondurable manufacturing materials rose 0.2 percent in September, following an increase of 0.3 percent a month earlier. For the third quarter, this index declined at a seasonally adjusted annual rate of 1.2 percent, after a decreasing at a 3.0-percent rate in the second quarter. In September, price increases for plastic resins and materials, primary basic organic chemicals, inedible fats and oils, and for processed yarns and threads outweighed declines for paper, intermediate basic organic chemicals, phosphates, gray fabrics, and paint materials.

The index for construction materials rose 0.4 percent after increasing 0.3 percent in August. In the third quarter, this index moved up at a 2.5- percent seasonally adjusted annual rate, compared with a 5.2-percent rate of increase in the second quarter. In September, price increases for softwood lumber, plywood, millwork, concrete products, fabricated structural metal products, and gypsum products more than offset declines for plastic construction products, air conditioning and refrigeration equipment, steel wire, and switchgear.

The index for intermediate foods and feeds rose 1.1 percent in September, following an increase of 0.2 percent in August. This index rose at a seasonally adjusted annual rate of 5.3 percent over the last three months after surging at a 32.2-percent rate in the second quarter. In September, prices for prepared animal feeds advanced 2.4 percent after declining 0.1 percent a month earlier. The indexes for fluid milk products and for condensed and evaporated milk also turned up after falling in August. The index for flour fell less than in the previous month. Prices for confectionery materials rose more in September than a month earlier. By contrast, the index for pork declined 7.5 percent, following a rise of 8.7 percent in the previous month. Prices for malt and malt byproducts also turned down after rising in August. The indexes for beef and veal and for natural and processed cheese both rose less than a month ago.

Crude goods

The Producer Price Index for Crude Materials for Further Processing fell 1.5 percent in September, seasonally adjusted, after increasing 0.2 percent in the previous month. Prices for crude foodstuffs and feedstuffs fell more than in the previous month, and the index for crude energy materials rose less than in August. By contrast, the index for basic industrial materials rose more than in the prior month. (See table B.)

Prices for crude foodstuffs and feedstuffs fell 3.8 percent after declining 0.3 percent in the prior month. This index decreased at a seasonally adjusted annual rate of 6.1 percent from June 1996 to September 1996, following a 58.1-percent rate of increase in the second quarter. In September, the index for corn fell 24.0 percent following a 3.8-percent decline in August. Prices for slaughter broilers also fell more than in August. The indexes for slaughter hogs and soybeans turned down after rising a month ago. Prices for fluid milk rose less than in the prior month. By contrast, prices for slaughter cattle increased 6.8 percent after showing no change in the previous month. The indexes for Irish potatoes for processing and alfalfa hay turned up after falling in the prior month. Prices for fresh fruits and melons rose more than in August.

Prices for crude energy materials rose 0.6 percent after increasing 0.7 percent in the previous month. This index rose at a seasonally adjusted annual rate of 22.9 percent from June 1996 to September 1996, following a 15.0-percent rate of decline in the second quarter. In September, price increases for crude petroleum and coal more than offset price declines for natural gas.

The index for crude nonfood materials less energy increased 0.6 percent after rising 0.1 percent in August. This index declined at a seasonally adjusted annual rate of 3.6 percent in the third quarter of 1996 following a 7.9-percent rate of decline in the second quarter of 1996. In September, prices for leaf tobacco turned up 12.2 percent after falling 4.6 percent a month ago. The indexes for copper ores and copper base scrap fell less than in the prior month. Prices for aluminum base scrap rose more than in August. The indexes for hardwood logs, bolts, and timber and for iron and steel scrap increased after showing no change in the previous month. By contrast, prices for raw cotton turned down 2.9 percent after rising 6.5 percent a month ago. The indexes for cattle hides, gold ores, and pulpwood also fell after increasing in August. Prices for softwood logs, bolts, and timber rose less 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 0.2 percent in September, after increasing 0.5 percent in August. (Net output price indexes are not seasonally adjusted.) During the third quarter of 1996, this index rose at an annual rate of 12.9 percent, after declining at a 12.7-percent rate in the second quarter. In September, prices for the oil and gas extraction industry group were unchanged, after rising 1.1 percent in the previous month. Price declines slowed, however, for the industry groups for metal mining and nonmetallic minerals mining. In addition, prices for the bituminous coal and lignite mining industry moved up 2.4 percent after showing no change a month earlier. In September, the Producer Price Index for Total Mining stood at 80.6 (December 1984=100), 17.3 percent higher than a year earlier.

Manufacturing. The Producer Price Index for total domestic manufacturing industries inched up 0.1 percent in September, after rising 0.2 percent in August. From June to September, this index increased at a 1.3-percent annual rate, after rising at a 3.5-percent rate in the second quarter. In September, price increases for the petroleum refining, lumber and wood, apparel, and chemical industry groups more than offset declines for the transportation, paper, tobacco, and electrical machinery industry groups. In September, the index for total manufacturing was 127.5 (December 1984=100), 2.6 percent above its year earlier level.

Other. Among other industries in September, the index for electric power utilities also increased about the same as in August. Prices turned up after falling a month earlier for trucking (except local), deep sea domestic transportation of freight, water transportation of freight (not elsewhere classified), airports and airport services, travel agencies, ferrous scrap collection, waste materials other than metal and paper, truck rental and leasing, and other specialty hospitals. The index for telephone communications increased following no change in August. Price increases accelerated for radio broadcasting and for building cleaning and maintenance services (not elsewhere classified).

By contrast, prices turned down for marine cargo handling, cable and other pay television services, operators of nonresidential buildings, real estate agents and managers, hotels and motels, and advertising agencies after rising in August. Prices fell after being unchanged for employment agencies and for farm products warehousing and storage. Prices fell more than in August for nonferrous scrap collection, freight transportation arrangement, and local trucking without storage.

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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 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.

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 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.

1Table 3. Producer Price Indexes for selected commodity groupings (1982=100 unless otherwise indicated)

1/ Data for May 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.

1Table #4 Producer price indexes for the net output of major industry groups, not seasonally adjusted