January 1997 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 declined 0.3 percent in January, seasonally adjusted, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. This followed increases of 0.6 percent in December and 0.2 percent in November. Prices received by producers of intermediate goods rose 0.2 percent in January after increasing 0.3 percent in the month prior. The Crude Goods Price Index advanced 5.2 percent following a gain of 4.9 percent in December. (See table A.)

Among finished goods in January, the index for energy goods turned down after rising in each of the previous six months. Prices for finished consumer foods declined 1.0 percent in January after falling 0.1 percent in the previous month. Prices for finished goods other than food and energy remained unchanged after increasing 0.1 percent in December.

1997 Jan. -0.3 -1.0 -0.2 0 2.5 0.2 5.2 NOTE: Some percent changes shown here and elsewhere in this release may differ from those previously reported because seasonal adjustment factors have been recalculated to reflect developments during 1996. In addition, indexes for September 1996 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision four months after original publication.

Before seasonal adjustment, the Producer Price Index for Finished Goods dropped 0.1 percent in January to 132.6 (1982=100). From January 1996 to January 1997, the Finished Goods Price Index rose 2.5 percent. Over the same period, prices for finished consumer foods rose 2.5 percent, the index for finished energy goods advanced 10.4 percent, and prices for finished goods other than food and energy were up 0.6 percent. Prices received by domestic producers of intermediate goods increased 1.0 percent for the 12 months ended in January, and the index for crude goods rose 15.1 percent during this same period.

Finished Goods

The Producer Price Index for Finished Energy Goods declined 0.2 percent in January following an increase of 3.4 percent in the prior month. Prices for unleaded regular gasoline turned down 4.9 percent after advancing 14.1 percent in December. The index for premium unleaded gasoline and home heating oil also fell after rising a month ago. The index for finished lubricants fell more than in December. By contrast, prices for residential gas rose 5.0 percent following an increase of 0.9 percent in December.

Prices for finished consumer foods fell faster than a month ago. The index for fresh fruits and melons dropped 6.0 percent after rising 11.8 percent in December. Prices also turned down after rising a month earlier for eggs for fresh use, pork, and young chickens. The index for beef and veal fell more in January than it did a month ago. By contrast, prices for fresh and dry vegetables rose 4.2 percent following a 21.4 percent decline in December. The indexes for confectionery end products and for pasta also increased after falling in the prior month. Prices for dairy products fell less than a month ago, and the indexes for shortening and cooking oils rose more than in December.

1997 Jan. -0.8 1.1 0.1 1.0 -1.0 12.9 2.0 15.1 NOTE: Some percent changes shown here and elsewhere in this release may differ from those previously reported because seasonal adjustment factors have been recalculated to reflect developments during 1996. In addition, indexes for September 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 finished consumer goods excluding food and energy remained unchanged in January after rising 0.1 percent in December. Price increases for prescription drugs, alcoholic beverages, light trucks, and for tires and tubes were offset by price declines for passenger cars, sanitary papers, newspaper circulation, and for men's and boys' apparel.

The index for capital equipment registered no change in January after rising 0.1 percent in December. Price increases for light motor trucks, communications and related equipment, commercial furniture, construction machinery and equipment, and agricultural machinery and equipment offset price declines for heavy motor trucks, civilian aircraft, and electronic computers.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 0.2 percent in January, seasonally adjusted, after rising 0.3 percent a month earlier. Increases for energy goods, both durable and nondurable manufacturing materials, and construction materials outweighed declines for foods and feeds. Excluding food and energy, the intermediate materials index increased 0.1 percent for the third consecutive month. (See table B.)

The rise in the index for intermediate energy materials slowed to 1.1 percent from 2.2 percent in December. The index for diesel fuel turned down 2.0 percent after rising 5.2 percent in the previous month. Prices for both regular and premium unleaded gasoline also fell after increasing in December. Prices for liquefied petroleum gas and jet fuels rose less than a month earlier. By contrast, the index for electric power turned up 0.3 percent after falling 0.6 percent in December. Prices for residual fuel and liquid asphalt also increased after declining in the prior month. The index for industrial natural gas rose more than a month ago.

The rise in the index for durable manufacturing materials slowed to 0.2 percent from 0.5 percent in the previous month. The index for prepared paint turned down 0.3 percent after rising 2.2 percent a month earlier. Prices for flat glass also declined after increasing a month ago. The index for hot rolled steel sheet and strip fell more than in December, and prices for copper and brass mill shapes rose less than in the prior month. On the other hand, the rise in the index for aluminum accelerated to 6.0 percent from 1.9 percent in the previous month. Prices for hardwood lumber and aluminum mill shapes also rose more than a month earlier. Indexes for hot rolled steel bars, plates, and structural shapes and for cold rolled steel sheet and strip fell less than a month ago.

The index for nondurable manufacturing materials increased 0.1 percent for the third consecutive month. Price increases for inedible fats and oils, synthetic fibers, primary basic organic chemicals, and woodpulp outweighed declines for plastic resins and materials, intermediate basic organic chemicals, and nitrogenates.

The index for construction materials rose 0.1 percent after remaining unchanged in December. Price increases for millwork, gypsum products, softwood lumber, fabricated structural metal products, and for nonferrous wire and cable more than offset declines for plastic construction products, air conditioning and refrigeration equipment, and plywood.

The index for intermediate foods and feeds fell 0.8 percent after declining 0.2 percent in the previous month. The index for prepared animal feeds turned down 0.7 percent after rising 0.5 percent a month earlier. Prices for pork and flour also declined after advancing in December. The indexes for beef and veal and fluid milk products fell more than a month ago. Conversely, the decline in the index for natural and processed cheese slowed to 0.3 percent from 2.8 percent. Prices for condensed and evaporated milk also fell less than in the prior month. The index for crude vegetable oils rose more than in the previous month.

Crude Goods

The Producer Price Index for Crude Materials for Further Processing increased 5.2 percent, seasonally adjusted, after rising 4.9 percent a month earlier. The index for foodstuffs and feedstuffs fell less than a month ago. The index for basic industrial materials advanced in January after showing no change in December. Prices for crude energy materials rose substantially, though less than in the prior month. (See table B.)

The index for crude foodstuffs and feedstuffs fell 1.0 percent after declining 2.7 percent in the prior month. Prices for slaughter cattle fell 1.4 percent after declining 4.5 percent in December. The index for corn also fell less than the previous month. Prices for soybeans, fresh and dry vegetables, and slaughter hogs turned up after falling the previous month. Conversely, the indexes for slaughter broilers and fryers, fresh fruits and melons, and slaughter turkeys fell after rising in December.

The index for crude nonfood materials less energy rose 2.0 percent after remaining unchanged in the previous month. Prices for iron and steel scrap rose 6.4 percent after declining 0.8 percent the prior month. The indexes for wastepaper and softwood logs, bolts and timber also turned up after falling in December. Prices for aluminum base scrap rose more than a month ago. By contrast, the index for raw cotton fell 6.6 percent after increasing 1.0 percent the previous month. Prices for nonferrous metal ores and for construction sand and gravel also turned down after rising in December.

The index for crude energy materials increased 12.9 percent after advancing 16.5 percent in the previous month. The index for natural gas rose 21.6 percent after rising 34.1 percent in December. By contrast, prices for coal turned up 3.0 percent after decreasing 0.4 percent a month earlier. The index for crude petroleum rose more than in December.

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 10.1 percent in January following a 12.8 percent increase in December. (Net output price indexes are not seasonally adjusted.) In January, prices for the oil and gas extraction industry group moved up 12.5 percent after increasing 17.0 percent in the previous month. The index for the metal mining industry group turned down 0.2 percent after rising the same amount in December. By contrast, the indexes for the nonmetallic minerals mining industry group and for the bituminous coal and lignite mining industry group turned up in January after falling in December. In January, the Producer Price Index for Total Mining Industries stood at 109.8 (December 1984=100), 38.8 percent higher than a year earlier.

Manufacturing. The Producer Price Index for total domestic manufacturing industries edged up 0.1 percent for the second consecutive month. The largest increases were for the industry groups for leather products (1.1 percent), printing and publishing (0.9 percent), and for lumber and wood products (0.5 percent). Prices also rose for the industry groups for measuring instruments, non-electrical machinery, and for furniture and fixtures. The index for the transportation equipment industry group edged up 0.1 percent. By contrast, declines were registered in January for the industry groups for petroleum refining (-0.2 percent), food and kindred products (-0.6 percent), and for paper products (-0.2 percent). The index for the net output of the domestic manufacturing sector stood at 128.2 (December 1984=100), 1.9 percent higher than its year-earlier level.

Other. Among other industries in January, prices turned up after falling in December for non-local trucking, water transportation of freight (not elsewhere classified), air passenger transportation, freight transportation arrangement, cable and other pay television services, ferrous metal scrap collection, recovered paper collection, other waste material collection, hotels and motels, and for passenger car rental. Price increases accelerated in January for general warehousing and storage, marine cargo handling, telephone communications (except radiophone), natural gas utilities, nonferrous scrap collection, offices and clinics of doctors of medicine, skilled and intermediate care facilities, and other specialty hospitals. Price declines slowed for truck rental and leasing. Prices rose after showing no change in the previous month for courier services (except by air), farm product warehousing and storage, general medical and surgical hospitals, and for accounting, auditing, and bookkeeping services.

By contrast, prices turned down after rising a month earlier for railroad line-haul operations, deep sea domestic transportation of freight, and for airports and airport services. Price increases slowed from December to January for advertising agencies. Prices for radio broadcasting fell more than a month ago.

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.

Recalculation of seasonal adjustment factors

Effective with this release, seasonal adjustment factors have been recalculated to reflect 1996 price movement patterns for stage-of- processing (SOP) and commodity groupings. This routine annual recalculation may affect seasonally adjusted indexes and percent changes from January 1992 to the present. Revised seasonally adjusted data for this period, as well as seasonal factors for commodity indexes to be used through December 1997, are available on request from BLS. The table below shows 1996 monthly seasonally adjusted percent changes for the three major SOP categories calculated with the old seasonal factors, compared with the percent changes for recalculated indexes. The latter incorporate new seasonal factors that reflect 1996 price movement patterns.

Resampling of Industries

Effective with this release, another set of new and resampled industries is introduced. Three (3) mining industries, twenty-six (26) manufacturing industries, and two (2) service industries were resampled this month. In addition, four (4) other service industries were introduced into the PPI sample for the first time. Indexes for these industries appear in table 5 of the PPI Detailed Report.

Under the resampling procedure, the sample for an industry is updated to reflect current conditions more accurately when the structure, membership, technology, or product mix of an industry has shifted significantly. The Bureau of Labor Statistics published the first results of this systematic process in July 1986. Subsequent efforts have been completed at 6-month intervals.

Standard Industrial Classification (SIC) Code Industry

2086 Bottled and canned soft drinks 2092 Prepared fresh or frozen fish and seafoods 2281 Spun yarn 2282 Texturing, throwing, and winding mill products: cotton, manmade fibers, silk, and wool 2321 Men's and boys' suits and coats 2542 Partitions and fixtures, except wood 2752 Commercial printing, lithographic 2754 Commercial printing, gravure 2759 Commercial printing, n.e.c. 2841 Soap and other detergents 2842 Specialty cleaning, polishing, and sanitation preparations 2843 Surface-active agents 2851 Paints and allied products

3331 Primary copper 3398 Metal heat treating 3412 Metal shipping barrels, drums, kegs, and pails 3451 Screw machine parts 3536 Overhead traveling cranes, hoists, and monorail systems 3543 Industrial patterns 3564 Industrial and commercial fans and blowers and air purification equipment 3565 Packing, packaging and bottling machinery 3578 Calculating and accounting machines 3613 Switchgear and switchgear apparatus 3651 Household audio and video equipment 3674* Semiconductors and related devices

4011 Railroads, line-haul operating 4412 Deep sea foreign transportation of freight 8082** Home health care services 8111** Legal services 8711** Engineering design, analysis, and consulting services 8712** Architectural design, analysis, and consulting services

*The publication structure for this industry is changing, though the industry has not been resampled. See " Changes in the PPI for Semiconductors" in the January 1997 issue of the Producer Price Index Detailed Report.

**New industries, effective January 1997. See "New Producer Price Indexes for Home Health Care and Professional Services" in the January 1997 issue of the Producer Price Index Detailed Report.

For information on specific additions, deletions, and recodes of indexes that are effective this month, see tables 12 through 18 in the January 1997 issue of the Producer Price Index Detailed Report.