July 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 decreased 0.1 percent in July, seasonally adjusted, the Bureau of Labor Statistics of the U. S. Department of Labor reported today. This followed drops of 0.1 percent in June and 0.3 percent in May and is the seventh consecutive monthly decline in the index. Prices received by domestic producers of intermediate goods decreased in July after showing no change in the previous month. The Crude Goods Price Index fell 0.1 percent after declining 3.3 percent in June. (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 July 0.0 0.1 0.4 0.0 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 July, price decreases for finished consumer goods other than foods and energy, finished consumer foods, and capital equipment outweighed increases for finished energy goods. The index for finished goods other than foods and energy turned down 0.1 percent following a 0.1-percent rise in June.

Before seasonal adjustment, the Producer Price Index for Finished Goods decreased 0.2 percent in July to 131.3 (1982=100). From July 1996 to July 1997, the Finished Goods Price Index fell 0.2 percent. During this same period, consumer food prices moved up 0.1 percent, prices for finished energy goods fell 1.4 percent, and prices for finished goods other than foods and energy showed no change. Prices received by domestic producers of intermediate goods moved down 0.3 percent during the 12 months ended in June 1997, and crude material prices fell 7.3 percent over the same period.

Finished goods

The index for consumer goods other than foods and energy declined 0.1 percent after rising 0.1 percent in June. Prices for passenger cars turned down 1.6 percent after rising 0.3 percent in the prior month. The indexes for alcoholic beverages and floor coverings also fell after rising a month ago. Prices for sanitary paper products showed no change after rising in June. By contrast, the index for book publishing rose 0.1 percent following a 1.1-percent decline in the prior month. Prices for men's and boys' apparel also turned up after falling in June. The index for women's apparel rose more than a month ago.

Prices for finished consumer foods fell 0.2 percent in July following a 0.9-percent decline in the prior month. The index for eggs for fresh use turned up 21.7 percent after decreasing 8.6 percent in the previous month. Prices for pork, processed young chickens, and for fresh and dry vegetables also rose after falling a month earlier. The index for fresh fruits and melons declined less than in June. On the other hand, prices for roasted coffee decreased 0.4 percent following a 3.8-percent gain a month ago. The index for processed turkeys also turned down after rising in the prior month. Prices for dairy products decreased more than in June.

The index for capital equipment fell 0.1 percent after rising 0.1 percent in the previous month. Prices for light motor trucks dropped 0.8 percent following a 0.3-percent decline in June. The indexes for electronic computers and railroad equipment fell after rising in the prior month. Conversely, the index for civilian aircraft increased 0.4 percent following a 0.1 percent gain in June. Prices for x-ray equipment and for transformers and power regulators turned up after falling in the prior month.

The Producer Price Index for finished energy goods rose 0.1 percent in July following a 0.7-percent gain in June. Prices for unleaded regular gasoline advanced 1.7 percent after increasing 3.5 percent a month ago. The index for residential natural gas also rose less than in the prior month. Prices for residential electric power remained unchanged after increasing 0.2 percent in the previous month. By contrast, the index for home heating oil fell 3.4 percent after declining 5.8 percent in June. Prices for finished lubricants rose more than a month ago.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components declined 0.2 percent in July, seasonally adjusted, after showing no change in June. The indexes for intermediate energy goods and durable manufacturing materials decreased after increasing a month earlier. By contrast, prices for nondurable manufacturing materials rose after showing no change in the prior month. The index for construction materials rose after falling in the previous month. Prices for intermediate foods and feeds fell less than a month ago. Excluding foods and energy, the intermediate materials index was unchanged for July after rising slightly in June. (See table B.)

The index for intermediate energy goods declined 1.1 percent following a 0.6-percent advance in the previous month. Prices for commercial electric power decreased 1.8 percent after a 1.2-percent increase in June. The indexes for jet fuels, residual fuels, and liquefied petroleum gas turned down after rising a month ago. Prices for No. 2 diesel fuel fell more than in the prior month. By contrast, the index for industrial electric power advanced 0.7 percent following a 0.6-percent decline in June. Prices for coke oven products increased more than last month. The index for natural gas to electric utilities turned up after falling a month earlier.

The index for durable manufacturing materials declined 0.6 percent following a 0.3-percent advance in the previous month. Prices for copper cathode and refined copper decreased 9.7 percent after a 4.0-percent increase in June. The indexes for copper and brass mill shapes and aluminum mill shapes fell after rising in the prior month. The index for hot rolled sheet and strip moved down after showing no change a month ago. Prices for plywood rose less than a month earlier. By contrast, the index for semifinished steel mill products advanced 2.6 percent after showing no change in June. Prices for hot rolled bars, plates, and structural shapes rose more than in the previous month. The index for cement turned up after falling a month ago.

The index for nondurable manufacturing materials advanced 0.2 percent after showing no change in the previous month. Prices for basic organic chemicals increased 0.8 percent following a 0.6-percent decrease in June. The indexes for paper, fertilizer materials, and woodpulp rose more than a month ago. Prices for medicinal and botanical chemicals turned up after falling in the prior month. By contrast, the index for paperboard advanced 0.2 percent following a 0.7-percent advance in June. Prices for inedible fats and oils and plastic resins and materials decreased after increasing a month ago. The index for basic inorganic chemicals rose less than in the previous month.

The index for construction materials advanced 0.1 percent following a 0.1-percent decline in the previous month. Prices for softwood lumber decreased 0.1 percent after a 2.7-percent decrease in June. The index for plastic construction materials showed no change after falling a month ago. The indexes for fabricated structural metal products and fabricated ferrous wire products rose after showing no change a month earlier. Prices for millwork, cement, and air conditioning and refrigeration equipment advanced after declining in the prior month. By contrast, the index for plywood increased 0.1 percent following a 2.7-percent increase in June. Prices for nonferrous wire and cable and asphalt felts and coatings turned down after rising a month earlier. The index for gypsum products fell more than in the prior month.

The index for intermediate foods and feeds declined 1.2 percent following a 1.4-percent decline in the previous month. Prices for pork increased 1.2 percent after a 3.4-percent decrease in June. The indexes for prepared animal feeds and fluid milk products fell less than a month ago. By contrast, the index for refined sugar declined 2.9 percent following a 0.1-percent advance in June. Prices for flour fell more than in the previous month. The index for butter decreased after increasing a month ago.

Crude Goods

The Producer Price Index for Crude Materials for Further Processing decreased 0.1 percent, seasonally adjusted, following a 3.3-percent decrease in June. Prices for crude foodstuffs and feedstuffs rose after falling in the prior month. The index for crude energy materials fell less than a month ago. Prices for basic industrial materials fell after rising in June. (See table B.)

Prices for crude foodstuffs and feedstuffs gained 0.3 percent following a 5.4-percent decrease in June. Prices for slaughter cattle rose 2.8 percent following a 6.9-percent decline in the prior month. The indexes for slaughter hogs and corn also rose after falling in the previous month. Prices for slaughter broilers and fryers rose more than in June. By contrast, prices for wheat fell 10.4 percent after decreasing 4.4 percent a month ago. The index for fluid milk fell more than in June. Prices for fresh vegetables, except potatoes, rose less than in the prior month.

The index for crude energy materials dropped 0.4 percent in July, led by declines of 2.4-percent for natural gas and 5.0 percent for coal. The July decrease in the crude energy materials index follows a 2.9-percent decline in the prior month. This slowing rate of decline was led by an upturn in prices for crude petroleum. By contrast, the indexes for coal and natural gas turned down after rising in June.

The index for crude nonfood materials less energy fell 0.5 percent following a 0.4-percent increase in June. Prices for copper ores turned down 7.6 percent after rising 11.9 percent in the prior month. The index for copper base scrap also decreased after increasing in June. Prices for gold ores fell more than in the previous month. By contrast, raw cotton moved up 8.4 percent after rising 0.7 percent in the prior month. Prices for iron and steel scrap also increased more than in the previous month. The index for softwood logs, bolts, and timber turned up after falling a month ago.

Net output price indexes for mining, manufacturing, and other industries

Mining. The Producer Price Index for the net output of total domestic mining industries fell 0.3 percent in July following a decline of 1.8 percent in June. (Net output price indexes are not seasonally adjusted.). In July, prices for the oil and gas extraction industry group increased 0.5 percent following a 3.0-percent decrease in the previous month. By contrast, the index for the nonmetallic minerals mining industry group increased 0.2 percent after a 0.4-percent rise a month ago. Prices for the coal mining industry group turned down 2.8 percent following a 1.3-percent gain last month. Similarly, the index for the metal mining industry group fell 4.8 percent after increasing 3.4 percent in the prior month. In July, the Producer Price Index for total mining industries stood at 79.5 (December 1984=100), 1.9 percent lower than a year earlier.

Manufacturing. The Producer Price Index for the net output of total domestic manufacturing industries fell 0.2 percent in July, following a similar decrease in June. In July, price declines for the industry groups for petroleum refining and related products, transportation equipment, primary metal industries, textile mill products, and non-electrical machinery offset price increases for measuring and controlling instruments, chemicals and allied products, furniture and fixtures, lumber and wood products, and for the rubber and miscellaneous plastic products industry groups. In July, the Producer Price Index for the net output of total manufacturing industries stood at 127.0 (December 1984=100), 0.1 percent below its level a year ago.

Other. Among other industries in July, the indexes for hotels and motels, scheduled air transportation, travel agencies, and for offices and clinics of doctors of medicine turned down after rising in June. Prices for scrap and waste materials collection, crude petroleum pipelines, and for general warehousing and storage decreased after showing no change a month ago. The indexes for real estate agents and managers, tugging and towing services, non-local trucking, passenger car rental (without drivers), cable and other pay TV services, railroad line-haul operations, building cleaning and maintenance services, home health care services, and for architectural design, analysis, and consulting services rose less than in June. Prices for radio broadcasting, truck rental and leasing, and water transportation of freight fell more than a month earlier. The indexes for legal services, help supply services, farm product warehousing and storage, and for refrigerated warehousing and storage showed no change in July after increasing in the previous month.

By contrast, the indexes for freight transportation arrangement, airports and airport services, non-psychiatric specialty hospitals, telephone communications (except radiotelephone), and local trucking without storage turned up in July after falling in June. Prices for psychiatric hospitals, employment agencies, and air courier services showed no change after declining a month ago. The indexes for marine cargo handling, refined petroleum pipelines, freight transportation on the Great Lakes-St. Lawrence Seaway, nonscheduled air transportation, general medical and surgical hospitals, and for engineering design, analysis, and consulting services increased after showing no change in the prior month. Prices for advertising agencies, skilled and intermediate care facilities, medical laboratories, and for accounting, auditing, and bookkeeping services rose more than last month. The indexes for operators and lessors of nonresidential buildings and for deep sea domestic transportation of freight fell less than in June.

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.

Resampling of Industries

Effective with this release, another set of resampled industries is introduced. Two (2) mining industries, twenty-five (25) manufacturing industries, and one (1) service industry were resampled this month. 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 more accurately the current structure, membership, technology, or product mix. 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

1459 Clay and related materials, not elsewhere classified 1479 Chemical and fertilizer mineral mining, not elsewhere classified 2037 Frozen fruits and vegetables 2091 Canned and cured seafoods 2431 Millwork 2514 Metal household furniture 2541 Wood partitions and fixtures 2678 Stationery products 2741 Miscellaneous publishing 2891 Adhesives and sealants 2899 Chemicals and chemical preparations, not elsewhere classified 3053 Gaskets, packing, and sealing devices 3271 Concrete block and brick 3273 Ready-mixed concrete 3312 Blast furnaces and steel mills 3315 Steel wire and related products - made from purchased materials 3316 Cold finishing of steel shapes - made from purchased materials 3317 Steel pipe and tubes - made from purchased materials 3341 Secondary nonferrous metals 3442 Metal doors, sash, and trim 3471 Metal plating and polishing 3479 Metal coating and allied services 3585 Refrigeration and heating equipment 3599 Machinery, except electrical, not elsewhere classified 3629 Electrical industrial apparatus, not elsewhere classified 3843 Dental equipment and supplies 3851 Ophthalmic goods 4424 Domestic deep sea transportation of freight

For information on specific additions, deletions, and recodes of indexes that are effective this month, see tables of sample changes in the July 1997 issue of the Producer Price Index Detailed Report. 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 March 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 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 March 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 four months after original publication.

1/ Data for March 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 March 1997 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision four months after original publication. 3/ Not available.

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 March 1997 have been recalculated to incorporate late reports and corrections by respondents. 2/ Includes crude petroleum. 3/ Excludes crude petroleum.