May 1998 Producer Price Index

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The Producer Price Index for Finished Goods rose 0.2 percent in May, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.2-percent rise in April and a decline of 0.3 percent in March. The index for finished goods other than foods and energy increased 0.2 percent for the second consecutive month. Prices received by producers of intermediate goods inched down 0.1 percent in May, after showing no change in April. The crude goods index fell 0.3 percent, after a 1.0-percent advance in the prior month. (See table A.)

Among finished goods in May, price increases for finished consumer goods other than foods and energy and for finished energy goods more than offset price decreases for finished consumer foods and capital equipment. The index for finished energy goods turned up after falling for seven consecutive months.

Before seasonal adjustment, the Producer Price Index for Finished Goods rose 0.3 percent in May to 130.4 (1982=100). From May 1997 to May 1998, the Finished Goods Price Index decreased 0.9 percent. During the same period, prices for finished energy goods declined 7.2 percent, and the index for finished consumer foods fell 1.3 percent. By contrast, prices for finished goods other than foods and energy rose 0.6 percent. Prices received by domestic producers of intermediate goods declined 1.6 percent for the 12 months ending in May, and the index for crude goods fell 9.2 percent during the past 12 months.

Finished goods

The index for finished consumer goods other than foods and energy advanced 0.5 percent in May, following a 0.3-percent increase in April. Price increases for prescription drugs, tobacco products, periodical circulation, home electronic equipment, and book publishing outweighed price declines for passenger cars, light motor trucks, cosmetics, and sanitary paper products.

The index for finished energy goods increased 0.8 percent, after declining 0.1 percent in the prior month. Prices for gasoline rose 4.3 percent, following a 0.6-percent decrease in April. By contrast, the index for residential electric power showed no change, after increasing 0.2 percent in the previous month. Prices for home heating oil, residential natural gas, and finished lubricants turned down, after rising in April.

Prices for finished consumer foods turned down 0.3 percent in May, following a 0.4-percent increase a month earlier. Prices for fresh and dry vegetables fell 20.9 percent, after rising 6.9 percent in April. The index for processed young chickens also turned down, following an increase in the prior month. Prices for beef and veal and for fresh fruits and melons rose less than in the previous month. By contrast, the index for eggs for fresh use decreased 0.5 percent, after declining 13.6 percent in April. Prices for dairy products turned up, after falling in the previous month. The indexes for pork and for finfish and shellfish rose more than a month ago.

The index for capital equipment decreased 0.2 percent, after rising 0.1 percent in April. Prices for light motor trucks turned down 1.5 percent, following a 0.3-percent gain in the previous month. The index for agricultural machinery and equipment also turned down, after rising in the prior month. Prices for heavy motor trucks and civilian aircraft increased less than in April. The index for communication and related equipment fell, after showing no change a month ago. Prices for electronic computers decreased more than in April. By contrast, the index for commercial furniture turned up 0.3 percent, following a 0.4-percent decline in the prior month.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components declined 0.1 percent in May, seasonally adjusted, after showing no change in April. The indexes for intermediate energy goods, materials for durable manufacturing, and materials for nondurable manufacturing fell, while prices for materials and components for construction and intermediate foods and feeds showed no change. Excluding foods and energy, the index for intermediate materials declined 0.1 percent, after showing no change in April. (See table B.)

The index for intermediate energy goods declined 0.6 percent, following a 0.5-percent advance in April. Prices for residual fuel decreased 15.1 percent, after increasing 14.6 percent in the previous month. The index for commercial electric power also fell, after rising a month ago. Prices for industrial electric power declined, after showing no change in April. The index for No. 2 diesel fuel rose less than in the prior month. Conversely, prices for gasoline advanced 4.3 percent, following a 0.6-percent decline a month earlier. The indexes for liquefied petroleum gas, natural gas to electric utilities, and industrial natural gas rose, after falling last month.

The index for durable manufacturing materials declined 0.6 percent, after showing no change in April. Prices for primary nonferrous metals decreased 2.3 percent, following a 1.4-percent increase in the previous month. The indexes for copper and brass mill shapes, plywood, and cement also fell, after rising in the prior month. Prices for cold rolled sheet and strip fell more than a month ago. The index for prepared paint rose less than last month. By contrast, prices for aluminum mill shapes showed no change, following a 1.2-percent decline a month earlier. The index for hot rolled sheet and strip fell less than in the previous month. Prices for cold finished bars rose, after showing no change in April.

The index for nondurable manufacturing materials declined 0.2 percent in May, following a similar 0.2-percent decline in April. Price decreases for industrial chemicals, paper, plastic resins and materials, processed yarns and threads, and medicinal and botanical chemicals outweighed price increases for fertilizer materials, inedible fats and oils, synthetic fibers, and paperboard.

The index for materials and components for construction showed no change in May, following a 0.2-percent advance in April. Prices for softwood lumber decreased 3.2 percent, after a 0.2-percent decline in the prior month. The indexes for nonferrous wire and cable, plywood, switchgear, cement, and wiring devices fell, following an increase last month. By contrast, prices for fabricated structural metal products gained 0.6 percent, after showing no change April. The index for plastic construction products advanced, following a decline in the previous month. Prices for gypsum products increased, after showing no change in the prior month. The index for millwork rose more than a month ago.

The index for intermediate foods and feeds showed no change in May, following a 0.7-percent decline in April. Rising prices for beef and veal, pork, fluid milk products, crude vegetable oils, and butter offset falling prices for prepared animal feeds, flour, and for natural, processed, and imitation cheese.

Crude goods

The Producer Price Index for Crude Materials for Further Processing turned down 0.3 percent in May, seasonally adjusted, following a 1.0- percent increase in April. Prices for crude foodstuffs and feedstuffs turned down, after increasing a month ago. The index for crude energy materials rose less than in the prior month. On the other hand, prices for basic industrial materials turned up in May, following a decline a month ago. (See table B.)

Prices for crude foodstuffs and feedstuffs decreased 1.4 percent in May, following a 0.3-percent increase in April. The index for fluid milk fell 6.5 percent, after declining 0.3 percent in the previous month. Prices for slaughter cattle rose less than in the prior month. The indexes for slaughter broilers and fryers and for fresh and dry vegetables turned down, after rising in April. Conversely, prices for corn declined 4.2 percent, following a 12.4-percent drop a month ago. The index for wheat prices also fell less than in the prior month. The index for soybeans turned up, after decreasing in the previous month. Prices for slaughter hogs increased more than in April.

The index for crude energy materials rose 0.6 percent in May, following a larger increase of 3.5 percent in April. Prices for natural gas increased 0.4 percent, after rising 5.2 percent in the previous month. The index for crude petroleum also rose less than last month. By contrast, prices for coal turned up 0.7 percent, after falling 2.7 percent in the prior month.

The index for crude nonfood materials less energy increased 0.5 percent in May, following a 0.9-percent decline in April. Prices for raw cotton led the upturn with a 9.9-percent advance, after falling 10.2 percent in the prior month. The indexes for iron and steel scrap and for copper ores also rose, following a decrease in the previous month. Prices for wastepaper and aluminum base scrap fell less than a month ago. On the other hand, the index for gold ores declined 1.7 percent, following a 4.8- percent increase in April. Prices for cattle hides, copper base scrap, and pulpwood logs also turned down, after rising 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 0.4 percent in May, following a 2.2-percent increase in April. (Net output price indexes are not seasonally adjusted.) The index for the coal mining industry group turned up 0.2 percent, after a 1.9- percent decline in the prior month. Prices for the nonmetallic minerals mining industry group rose 0.3 percent, following a 0.5-percent increase in the previous month. The indexes for the metal mining and the oil and gas extraction industry groups also rose less than a month ago. In May, the Producer Price Index for the net output of total domestic mining industries stood at 73.9 (December 1984=100), 8.5 percent below its year-ago level.

Manufacturing. The Producer Price Index for the net output of total domestic manufacturing industries rose 0.2 percent in May, following a 0.2- percent increase in April. The index for the chemicals and allied products industry group advanced 1.1 percent, after declining 0.1 percent in the prior month. Prices for the furniture and fixtures and the food and kindred products industry groups also rose, following a decrease in the previous month. By contrast, prices for the lumber and wood products industry group fell 0.6 percent, after rising 0.3 percent in April. The index for the transportation equipment industry group also fell, following an increase in the previous month. In May, the Producer Price Index for the net output of the total domestic manufacturing industries stood at 126.3 (December 1984=100), 1.0 percent below its year-ago level.

Other. Among other industries in May, prices for offices and clinics of doctors of medicine increased 0.2 percent, after a 0.2 percent decrease in April. The indexes for real estate agents and managers, deep sea foreign transportation of freight, and truck rental and leasing (without drivers) also rose, following a decline in the prior month. Prices for airports and airport services, passenger car rental (without drivers), and radio broadcasting increased more than in the previous month. Conversely, the index for hotels and motels fell 0.2 percent, following a 1.3-percent advance in April. Prices for scheduled air transportation also turned down, after rising in the prior month. The index for prepackaged software fell more than in April. Prices for legal services showed no change, following a 0.8-percent gain in the previous month.

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