October 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 0.4 percent in October, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This followed a 0.2-percent increase in September and a 0.3 percent rise in August. Prices received by domestic producers of intermediate goods registered no change in October after increasing 0.3 percent a month earlier. The Crude Goods Price Index declined 0.6 percent following a 1.5-percent drop in September. (See table A.)

Among finished goods in October, prices for both finished energy goods and finished consumer foods rose more than in the prior month. By contrast, the index for finished goods other than food and energy fell 0.3 percent after rising 0.3 percent in September.

Change in Except finished Inter- goods foods from 12 mediateCrude and months Month Total Foods Energy energy ago goods goods (unadj.) 1995 Oct. 0.2 -0.1 -0.1 0.3 2.3 0.0 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 0.7 percent in October to 132.5 (1982=100). From October 1995 to October 1996, the Finished Goods Price Index rose 3.0 percent. Over the same period, prices for finished consumer foods increased 5.0 percent, the index for finished energy goods advanced 9.5 percent, and prices for finished goods other than food and energy were up 0.8 percent. Prices received by domestic producers of intermediate goods rose 0.5 percent for the 12 months ended in October, and the index for crude materials increased 9.4 percent during this time frame.

Finished Goods

The Producer Price Index for finished energy goods rose 1.9 percent in October after increasing 0.2 percent in the previous month. Prices for gasoline rose 5.5 percent following a 0.9-percent rise in September. The index for home heating oil also rose more in October than a month earlier. Prices for residential gas registered no change after declining in September. By contrast, the index for finished lubricants declined 1.5 percent in October after remaining unchanged a month ago. Also, prices for residential electric power turned down after rising in September.

Prices for finished consumer foods rose 0.8 percent in October following a 0.2-percent rise in the prior month. The index for pork rose 4.4 percent in October after declining 7.5 percent a month ago. Prices for fresh and dry vegetables and for finfish and shellfish also turned up after falling in September. The indexes for bakery products and processed young chickens each rose in October after registering no change in the previous month. In addition, prices for beef and veal increased more than they did in September. By contrast, prices for fresh fruits and melons rose 6.8 percent in October following a 24.6- percent increase in the prior month. The index for dairy products also rose less rapidly than in September. Prices for eggs for fresh use, processed fruits and vegetables, confectionery end products, and for shortening and cooking oils turned down in October after rising a month ago.

Prices for finished consumer goods less foods and energy declined 0.1 percent in October following a 0.2-percent rise a month earlier. The index for passenger cars fell 1.6 percent after increasing 1.2 percent in September. Before seasonal adjustment, the passenger car index for October was up 5.2 percent. The October new car index was 0.1 percent lower than it had been a year earlier. In accordance with our usual practice, most new model year passenger cars and light trucks were introduced into the PPI in October. (See "Quality Changes for 1997 Model Vehicles.") Prices for light trucks, prescription drugs, tires and tubes, and home electronic equipment also turned down in October after rising in the prior month. The index for girls' apparel rose less than in September and prices for household appliances fell more in October than in the prior month. By contrast, prices for periodicals rose 3.2 percent after declining 0.9 percent in September. The indexes for sanitary papers and newspapers also rose in October after falling in the previous month. Prices for books and women's apparel rose more than in September. The index for cosmetics fell less than in the prior month. The indexes for alcoholic beverages and for men's and boys' apparel rose in October after registering no change in the previous month.

The index for capital equipment declined 0.4 percent in October following a 0.3 percent rise in the prior month. Prices for light motor trucks fell 1.2 percent after rising 1.3 percent in September. The index for heavy motor trucks also turned down in October after rising in the previous month. Prices for electronic computers and for x-ray and electromedical equipment fell more in October than in the prior month. By contrast, the index for ships rose 4.0 percent after increasing 0.1 percent in September. Prices for railroad equipment and for transformers and power regulators advanced more in October than in the prior month. The indexes for commercial furniture and for offices and store machines and equipment turned up after falling in September. The index for textile machinery rose in October after registering no change a month earlier.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components remained unchanged in October, seasonally adjusted, after advancing 0.3 percent a month earlier. The indexes for foods and feeds, durable manufacturing materials, construction materials, and nondurable manufacturing materials turned down after rising in September. By contrast, prices for energy goods rose more than in the previous month. Excluding food and energy prices, the intermediate materials index turned down 0.1 percent after rising the same amount a month earlier. (See table B.)

The index for intermediate foods and feeds declined 2.0 percent after increasing 1.1 percent in September. The index for prepared animal feeds turned down 5.2 percent after rising 2.4 percent in the previous month. Prices for crude vegetable oils, refined sugar, and for natural and processed cheese also decreased after advancing a month earlier. The index for fluid milk products rose less than in September. On the other hand, the index for pork turned up 4.4 percent after falling 7.5 percent in the prior month. Prices for confectionery materials rose more than in the previous month.

The index for durable manufacturing materials fell 0.4 percent after rising 0.6 percent a month earlier. The index for plywood turned down 3.8 percent after advancing 5.7 percent in the previous month. Prices for hot rolled steel sheet and strip, building paper and board, semifinished steel mill products, cold rolled steel sheets and strip, and for hot rolled steel bars, shapes, and structural plates also decreased after rising a month earlier. Indexes for aluminum mill shapes and aluminum declined more than in the previous month. By contrast, the index for copper turned up 0.7 percent after falling 1.4 percent a month ago. Prices for copper and brass mill shapes also increased after decreasing in the previous month, and the index for hardwood lumber rose more than in September.

The index for construction materials turned down 0.3 percent after rising 0.4 percent a month earlier. The index for softwood lumber fell 5.1 percent after advancing 2.7 percent in the previous month. Prices for plywood, asphalt felts and coatings, and fabricated ferrous wire products also turned down after rising in September. The index for millwork remained unchanged after rising a month earlier. Prices for plastic construction products fell more than in September, and the index for concrete products rose less than a month ago. Conversely, the rise in the index for fabricated structural metal products accelerated to 0.4 percent from 0.1 percent in the previous month. Prices for air conditioning and refrigeration equipment and switchgear turned up after falling a month ago.

The index for nondurable manufacturing materials turned down 0.2 percent after rising the same amount in the previous month. The index for inedible fats and oils dropped 10.3 percent after increasing 9.1 percent a month earlier. Prices for synthetic fibers and for alkalies and chlorine also turned down after increasing in September. Indexes for plastic resins and materials and primary basic organic chemicals rose less than a month ago. Prices for paperboard fell more than in the preceding month. On the other hand, the decline in the index for paper slowed to 0.8 percent from 1.2 percent in September. Prices for miscellaneous inorganic chemicals rose more than a month earlier.

The rise in the index for intermediate energy goods accelerated to 1.7 percent from 0.8 percent in the previous month. The index for liquefied petroleum gas jumped 18.4 percent after inching up 0.1 percent in September. Prices for gasoline, residual fuel, and diesel fuel also rose more than a month earlier. The index for commercial natural gas fell less than in the previous month. The rise in the index for jet fuels, however, slowed to 1.6 percent from 6.8 percent a month ago. Prices for both commercial and industrial electric power also rose less than in the prior month.

Crude goods

The Producer Price Index for Crude Materials for Further Processing decreased 0.6 percent in October, seasonally adjusted, after falling 1.5 percent a month earlier. The indexes for foodstuffs and feedstuffs fell less than in the prior month, and prices for energy materials rose more than in September. By contrast, the index for basic industrial materials rose less than a month ago. (See table B.)

The decline in the index for crude foodstuffs and feedstuffs slowed to 2.7 percent from 3.8 percent in September. The index for slaughter hogs turned up 7.2 percent after falling 6.0 percent in the previous month. Prices for slaughter broilers and fryers, and for fresh and dry vegetables also increased after declining in September. On the other hand, the rise in the index for slaughter cattle slowed to 1.0 percent from 6.8 percent in the prior month. Prices for fresh fruits and melons also rose less than in the previous month. The index for soybeans fell more than a month ago, and prices for fluid milk turned down after rising a month earlier.

The rise in the index for crude energy materials accelerated to 1.5 percent from 0.6 percent in the previous month. The decline in the index for natural gas slowed to 3.2 percent from 6.4 percent a month earlier. Price for crude petroleum rose more than in the previous month. By contrast, the index for coal turned down 2.5 percent after rising 3.1 percent a month ago.

The rise in the index for crude nonfood materials less energy slowed to 0.3 percent from 0.6 percent in the previous month. The index for iron and steel scrap turned down 4.3 percent after rising 0.4 percent a month ago. Prices for aluminum base scrap and silver ores also declined after increasing in the previous month. The index for leaf tobacco rose less than in September. Conversely, the index for cattle hides turned up 12.1 percent after falling 3.6 percent a month earlier. Prices for raw cotton, copper ores, copper base scrap, and pulpwood also increased after declining in September. Indexes for wastepaper and for hardwood logs, bolts, and timber rose more than a month earlier.

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 2.7 percent in October after increasing 0.2 percent in September and 0.5 percent in August. (Net output price indexes are not seasonally adjusted.) In October, prices for the oil and gas extraction industry group rose 3.9 percent after showing no change in the previous month. Price turned up for the nonmetallic minerals mining industry group, after falling in each of the 3 previous months. In addition, the index for the metal mining industry group was unchanged after declining a month ago. By contrast, prices for the bituminous coal and lignite mining industry group turned down 1.8 percent after rising 2.4 percent a month earlier. In October, the Producer Price index for total mining stood at 82.8 (December 1984=100), 20.0 percent higher than a year earlier.

Manufacturing. The Producer Price Index for total domestic manufacturing industries increased 0.5 percent in October, after inching up slightly in September and August. In October, the index for transportation equipment rose 2.4 percent after falling 1.1 percent in the previous month. Prices for petroleum refining advanced 2.6 percent, the same as in September. The index for the furniture and fixtures industry group turned up after showing little or no change in recent months. The index for tobacco manufactures was unchanged after edging down a month earlier. By contrast, prices for the lumber and wood products grouping fell 1.2 percent after increasing 1.3 percent in the previous month. Indexes also turned down after increasing in September for food and kindred products, chemicals and allied products, rubber and plastic products, leather and leather products, nonmetallic mineral products, and measuring instruments. Price increases slowed for the apparel industry group. In October, the index for total manufacturing was 128.2 (December 1984=100), 2.5 percent above its year earlier level.

Other. Among other industries in October, prices for collection of recovered paper increased 8.5 percent, after moving up 2.9 percent in September. Price increases also accelerated from September to October for trucking, except local; deep sea domestic transportation of freight; water transportation of freight, not elsewhere classified; air cargo transportation; travel agencies; skilled and intermediate care facilities; radio broadcasting; and for accounting, auditing, and bookkeeping services. Prices advanced after showing no change in the previous month for nonscheduled air transportation and psychiatric hospitals. Indexes turned up after falling in the previous month for freight transportation arrangement, hotels and motels, employment agencies, offices and clinics of doctors of medicine, and for general medical and surgical hospitals. Prices fell less than in the previous month for farm produce warehousing and storage, natural gas utilities, operators of nonresidential buildings, and passenger car rental.

By contrast, the index for electric power utilities fell 4.2 percent following a 0.4 percent increase in September. Prices also turned down after rising a month earlier for refrigerated warehousing and storage, ferrous metal scrap collection, building cleaning and maintenance services, and truck rental and leasing. The index for the collection of nonferrous metal scrap fell more in October than in September.

Information in this news release will be made available to sensory impaired individuals upon request. Voice phone: 202-606-7828; TDD phone: 202-606- 5897; TDD Message Referral phone: 1-800-326-2577.

New Seasonal Adjustment Method to be Implemented

Effective with the release of January data on February 14, 1997, the Bureau of Labor Statistics will begin using X-12 ARIMA seasonal adjustment software (developed by the Bureau of the Census) for performing Intervention Analysis Seasonal Adjustment (IASA). The X-12 ARIMA methodology incorporates a number of technical enhancements that improve the estimation of seasonal factors. This change will affect 16 PPI series. In addition, all remaining Producer Price Index series requiring seasonal adjustment will be processed using X-12 ARIMA software beginning in February 1998. Seasonal adjustment methods in the Consumer Price Index will change in similar fashion.

To request a report that describes the new methodology and its effects on the Finished Goods index, please contact Angelo Maggi on (202) 606-7729.

Seasonal adjustment factors for the PPI are recalculated in January each year to reflect price movements for the prior calendar year. This routine annual recalculation may result in revisions to seasonally adjusted indexes for the previous five years. BLS will make available recalculated seasonally adjusted indexes, as well as recalculated seasonal adjustment factors, for the period January 1992 through December 1996, at 8:30 a.m. on Wednesday, February 12, 1997. This date is two days before the scheduled release of the January 1997 PPI on Friday, February 14, 1997.

The recalculated 1992-1996 seasonally adjusted indexes will be available on the BLS Web site at http://stats.bls.gov. The recalculated 1992-1996 seasonal adjustment factors will be available on the BLS ftp site at ftp://stats.bls.gov. Choose the "pub" directory, the "special.requests" directory, and the "ppi" directory. The revised stage-of-processing index factors will be in the file, "sopsf97.txt." The revised commodity index factors will be in the file, "commsf97.txt."

This information may also be requested from the Division of Industrial Prices and Price Indexes, Section of Index Analysis, at (202) 606-7705.

1Table 1. Producer Price Indexes and percent changes by stage of processing (1982=100)

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 June 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. 1Table 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. 1Table 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 June 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 June 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