June 1997 Producer Price Index

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The Producer Price Index for Finished Goods decreased 0.1 percent in June, seasonally adjusted, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. This followed drops of 0.3 percent in May and 0.6 percent in April and is the sixth consecutive monthly decline in the index. Prices received by domestic producers of intermediate goods were unchanged in June following a 0.2-percent decrease in the previous month. The Crude Goods Price Index fell 3.3 percent after increasing 1.3 percent in May. (See table A.)

Change in Except finished Inter- goods foods from 12 mediateCrude and months Month Total Foods Energy energy ago goods goods (unadj.) 1996 June 0.3 1.4 -0.8 0.1 2.7 -0.3 -2.4 July 0 0.1 0.4 0 2.6 -0.2 2.2 Aug. 0.3 0.7 0.6 0.1 3.0 0.2 0.6 Sept. 0.3 0.4 0.7 0.1 3.0 0.4 -2.6 Oct. 0.4 0.8 1.7 -0.1 3.1 -0.2 -0.7 Nov. 0.2 0 0.9 0 3.0 -0.2 2.7 Dec. 0.5 -0.2 3.3 0.1 2.8 0.5 6.2

Among finished goods in June, the index for finished energy goods rose 0.7 percent, while the index for finished goods other than foods and energy increased 0.1 percent. Both indexes fell in the previous month. Prices for consumer foods, on the other hand, turned down in June after rising in the prior month.

During the first six months of 1997, the Finished Goods Price Index fell at a seasonally adjusted annual rate of 3.4 percent after rising at an equal rate in the last half of 1996. Prices for consumer foods declined at a seasonally adjusted annual rate of 2.8 percent during the first six months of 1997 following a 3.5-percent rate of increase in the latter half of 1996. The index for finished goods less foods and energy fell at a 0.3- percent seasonally adjusted annual rate for the first six months of 1997 after increasing at a 0.6-percent rate from June 1996 to December 1996. Prices for finished energy goods declined at a 16.0-percent seasonally adjusted annual rate in the first half of 1997 following a 16.2-percent rate of increase in the previous six months. The Intermediate Goods Price Index moved down at a 1.7-percent seasonally adjusted annual rate from December 1996 to June 1997 after posting a 1.1-percent rate of increase for the last six months of 1996. The Crude Goods Price Index fell at a 23.5- percent seasonally adjusted annual rate in the first half of 1997 after increasing at a 17.6-percent rate in the previous six months.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.1 percent in June to 131.6 (1982=100). From June 1996 to June 1997, the Finished Goods Price Index fell 0.1 percent. During this same period, consumer food prices moved up 0.3 percent, prices for finished energy goods fell 1.3 percent, and prices for finished goods other than foods and energy rose 0.2 percent. Prices received by domestic producers of intermediate goods moved down 0.4 percent during the 12 months ended in June 1997, and crude material prices fell 5.4 percent over the same period.

Finished goods

The Producer Price Index for finished energy goods rose 0.7 percent in June following a 2.1-percent decline in May. Gasoline prices advanced 0.4 percent after falling 7.1 percent in May. The index for residential natural gas also turned up after falling a month earlier. Prices for finished lubricants rose more than a month ago. The index for residential electric power rose after showing no change in May. By contrast, home heating oil prices turned down 5.8 percent after increasing 2.2 percent in the previous month.

Prices for finished consumer foods fell 0.9 percent in June following a 0.4-percent increase in the prior month. The index for fresh fruits and melons decreased 15.6 percent after rising 7.9 percent in the previous month. Prices for finfish and shellfish, pork, and beef and veal also turned down following increases a month earlier. The indexes for eggs for fresh use and for processed young chickens fell more than in May. On the other hand, prices for dairy products decreased 1.1 percent after declining 1.5 percent a month ago. The indexes for soft drinks and milled rice also fell less than in the previous month.

The index for consumer goods other than foods and energy moved up 0.1 percent after falling 0.3 percent in May. On a seasonally adjusted annual rate basis, this index showed no change from December 1996 to June 1997, compared with a 0.6-percent rate of increase in the latter half of 1996. In June, the index for passenger cars rose 0.3 percent following a 1.6- percent decline in May. Prices for sanitary papers, alcoholic beverages, and periodical circulation also turned up after falling in the previous month. By contrast, the index for book publishing turned down 1.1 percent in June after rising 0.1 percent a month earlier. Prices for men's and boys' apparel and for household appliances also fell after increasing in May. The indexes for tobacco products, prescription drugs, and women's apparel rose less than a month ago.

In June, the capital equipment index increased 0.1 percent after declining 0.2 percent in May. This index moved down at a 0.6-percent seasonally adjusted annual rate in the first half of 1997 after increasing at a 0.3-percent rate in the last half of 1996. In June, the index for electronic computers rose 0.6 percent after decreasing 4.6 percent in May. Prices for heavy motor trucks also turned up after falling a month earlier. The index for communications and related equipment rose after showing no change in the previous month. Prices for light motor trucks and ships fell less than a month ago. Conversely, the index for civilian aircraft increased 0.1 percent following a 0.4 percent gain in May. Prices for x- ray equipment turned down after showing no change in the prior month. Commercial furniture prices fell after rising in May. The index for tools and dies showed no change after increasing a month ago.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components showed no change in June, seasonally adjusted, after declining 0.2 percent in May. The index for intermediate energy goods turned up after falling a month ago. Prices for durable manufacturing materials rose more than in the prior month. By contrast, the indexes for both intermediate foods and feeds and construction materials turned down after rising a month earlier. Prices for nondurable manufacturing materials were unchanged after increasing in May. Excluding foods and energy prices, the index for intermediate materials increased 0.1 percent after showing no change in each of the previous 3 months. (See table B.)

The index for intermediate energy materials rose 0.6 percent, seasonally adjusted, after falling 1.9 percent in June. This index declined at a 14.7 percent seasonally adjusted annual rate in the first half of 1997 after rising at a 12.5-percent rate in the final half of 1996. In June, gasoline prices rose 0.4 percent after falling 7.1 percent a month ago. Prices for commercial electric power and jet fuels increased after decreasing a month earlier. By contrast, the index for residual fuel rose 3.4 percent after advancing 13.4 percent in the prior month. Prices for natural gas to electric utilities and petroleum coke fell after rising in May.

The index for durable manufacturing materials advanced 0.3 percent in June following a 0.2-percent increase in May. From December 1996 to June 1997, this index advanced at a 3.7-percent seasonally adjusted annual rate after falling at a 1.7-percent rate in the latter half of 1996. In June, price increases for aluminum mill shapes, copper and brass mill shapes, plywood, and for copper cathode and refined copper outweighed price declines for cold rolled sheets and strip, silver, gold, and cold finished bars.

The index for construction materials declined 0.1 percent following a 0.4-percent advance in May. Prices for this category advanced at a 2.9- percent seasonally adjusted annual rate during the first 6 months of 1997 after rising at a 1.4-percent rate during the last 6 months of 1996. In June, the index for softwood lumber turned down 2.7 percent after rising 1.3 percent in the prior month. Prices for plastic construction products also turned down after rising a month earlier. Fabricated structural metal products showed no changed after advancing a month ago. Prices decreased for gypsum products and millwork after increasing in May. By contrast, the index for plywood advanced 2.7 percent after falling 0.4 percent a month earlier. Prices for metal valves, except fluid power, also turned up after falling in May.

The index for intermediate foods and feeds declined 1.4 percent in June following a 0.5-percent rise in May. This index advanced at a 1.6- percent seasonally adjusted annual rate in the first half of 1997 after falling at an 8.5-percent rate in the latter half of 1996. In June, the index for prepared animal feeds turned down 2.2 percent following a 1.7- percent rise in the prior month. Prices for pork, beef and veal, and crude vegetable oils also declined after rising a month ago. By contrast, natural, processed, and imitation cheese declined 0.7 percent following a 3.3-percent decrease a month ago. Dry milk products showed no change after declining in May.

The index for nondurable manufacturing materials showed no change in June following a 0.2-percent increase in May. This index declined at a 0.9- percent seasonally adjusted annual rate during the first 6 months of 1997 after falling at a 0.3-percent rate in the second half of 1996. In June, prices for primary basic organic chemicals declined 0.2 percent after a 0.5- percent decline a month ago. The index for paint materials turned down after rising in May. Prices for both paper and paperboard rose less than in the previous month. By contrast, prices for miscellaneous basic organic chemicals declined 0.1 percent after a 0.9-percent fall a month earlier. The indexes for sodium compounds and for processed yarns and threads rose after falling in the prior month. Prices for woodpulp increased more than in May.

Crude Goods

The Producer Price Index for Crude Materials for Further Processing decreased 3.3 percent, seasonally adjusted following a 1.3-percent increase in May. Prices for crude energy materials also fell after rising in the prior month. The index for crude foodstuffs and feedstuffs decreased more than a month ago. Prices for basic industrial materials rose less than in May. (See table B.)

Prices for crude energy materials dropped 2.9 percent following a 3.4- percent gain in May. This index decreased at a 48.0-percent seasonally adjusted annual rate during the first half of 1997 following a 99.5-percent rate of increase in the last half of 1996. In June, prices for crude petroleum turned down 14.1 percent after rising 7.3 percent in the previous month. The index for natural gas increased 3.3 percent after gaining 5.8 percent in the prior month. By contrast, prices for coal turned up 3.0 percent after falling 6.4 percent in May.

Prices for crude foodstuffs and feedstuffs declined 5.4 percent following a 0.3-percent decrease in May. From December 1996 through June 1997, this index fell at a 6.5-percent seasonally adjusted annual rate after declining at a 19.5-percent rate in the second half of 1996. In June, prices for slaughter cattle fell 6.9 percent following a 0.7-percent increase in the prior month. The indexes for slaughter hogs, soybeans, Irish potatoes for processing, and for fresh fruits and melons also turned down after rising in May. On the other hand, the index for slaughter broilers and fryers rose 3.0 percent after decreasing 10.3 percent a month ago. Prices for fresh vegetables, except potatoes also turned up after falling in the previous month. The indexes for wheat and fluid milk fell less than in May.

The index for crude nonfood materials less energy increased 0.4 percent following a 1.2-percent gain in May. This index increased at a seasonally adjusted annual rate of 5.7 percent in the first six months of 1997 following a 1.9-percent rate of decline in the latter half of 1996. In June, prices for aluminum base scrap decreased 0.9 percent after a 4.8- percent rise a month ago. The indexes for wastepaper, gold ores, and for softwood logs, bolts, and timber also turned down after rising in May. Prices for iron and steel scrap and copper base scrap rose less than in the previous month. Conversely, the index for copper ores increased 11.9 percent after rising 3.6 percent in the prior month. Prices for iron ore showed no change after falling in May. The index for pulpwood logs fell 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 declined 1.8 percent in June following a 2.3-percent advance in May. (Net output price indexes are not seasonally adjusted.) During the first half of 1997 this index declined at an annual rate of 41.5 percent, after advancing at a 78.0-percent annual rate for the latter half of 1996. In June, prices for the oil and gas extraction industry group fell 3.0 percent following a 4.0-percent rise in the previous month. By contrast, the index for the coal mining industry group increased 1.3 percent after a 3.9-percent decrease a month ago. Prices for the metal mining industry group rose 3.4 percent following a 0.3-percent gain in the previous month. The index for the nonmetallic minerals mining industry group advanced 0.4 percent after a 0.1-percent advance the prior month. In June, the Producer Price Index for total mining industries stood at 79.7 (December 1984=100), 2.0 percent above its year-ago level.

Manufacturing. The Producer Price Index for the net output of total domestic manufacturing industries decreased 0.2 percent in June following a 0.1-percent decrease in May. During the first half of 1997 this index declined at an annual rate of 1.1 percent, after increasing at a 1.4- percent annual rate for the latter half of 1996. In June, price decreases for the industry groups for petroleum refining and related products, food and kindred products, lumber and wood products, rubber and plastic products, and measuring and controlling instruments more than offset price increases for the paper and allied products, primary metal industries, and electrical machinery and equipment industry groups. In June, the Producer Price Index for the net output of the domestic manufacturing sector stood at 127.3 (December 1984=100), 0.2 percent above its year-ago level.

Other. Among other industries in June, the indexes for railroads (line- haul operating), trucking (except local), travel agencies, natural gas utilities, real estate agents and managers, hotels and motels, and medical laboratories advanced following declines a month ago. Prices for air passenger transportation rose after showing no change in the prior month. The indexes for tugging and towing services, electric power utilities, passenger car rental, skilled and intermediate care facilities, legal services, and architectural services increased more than in the previous month. Prices for general warehousing and storage and nonscheduled air transportation were unchanged following declines in May. The indexes for water transportation of freight (not elsewhere classified), freight transportation arrangement, operators and lessors of nonresidential buildings, and other specialty hospitals fell less than in the previous month.

By contrast, prices for local trucking without storage, deep sea foreign transportation of freight, airports and airport services, radio broadcasting, and truck rental and leasing declined following advances a month ago. The indexes for scheduled air cargo transportation and telephone communications (except radiotelephone) fell after showing no change in the prior month. The index for psychiatric hospitals fell more than last month. Prices for local trucking with storage, marine cargo handling, refined petroleum pipelines, and scrap and waste materials were unchanged following advances in May. Prices for cable and other pay television services, advertising agencies, and accounting services rose less than in the previous month.

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

1/ Comprehensive relative importance figures are initially computed 3/ Includes crude petroleum. 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/ Percent of total intermediate materials. respectively, in the release tables containing January and May data. 7/ Formerly titled "Crude materials for 2/ The indexes for Feb. 1997 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 4 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 February 1997 have been recalculated 2/ Not seasonally adjusted. to incorporate late reports and corrections by respondents. 3/ Not available. All indexes are subject to revision 4 months after original publication.

1/ Data for Feb. 1997 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.

1/ Indexes in this table are derived from the net-output-weighted industry price indexes. Because of differences in coverage and aggregation methodology, they will generally not match the movements of similarly-titled indexes which are derived from traditional commodity groupings. 2/ The indexes for Feb. 1997 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication. 3/ Not available. Table 5. Producer Price Indexes by stage of processing, seasonally adjusted (1982=100)

1/ All seasonally adjusted indexes are subject to change up to 5 years after original publication due to the recalculation of seasonal factors each January. The indexes for February 1997 have been recalculated to incorporate late reports and corrections by respondents. 2/ Includes crude petroleum. 3/ Excludes crude petroleum.