July 1998 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 increased 0.2 percent in July, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This rise followed a decrease of 0.1 percent in June and an increase of 0.2 percent in May. Prices received by producers of intermediate goods were unchanged in July, after moving down 0.3 percent in June. The crude goods index fell 1.8 percent, following a 1.4-percent decline in the prior month. (See Table A.)

Change in Except Finished Inter- goods foods From 12 mediateCrude and months Month Total Foods Energy energy ago goods goods (unadj.) 1997 July -0.2 -0.3 -0.5 -0.1 -0.2 -0.2 -0.5 Aug. 0.2 -0.1 0.9 0.1 -0.2 0.1 0.4 Sept. 0.4 0 1.1 0.4 0 0.2 1.3 Oct. 0 0.7 -0.5 -0.1 -0.3 -0.1 4.6 Nov. -0.2 -0.3 -0.4 -0.1 -0.7 0.2 1.6 Dec. -0.2 0 -0.6 -0.1 -1.2 -0.2 -5.6

Among finished goods in July, the index for finished energy goods turned up after falling a month ago. Prices for finished consumer foods rose faster than in June. The index for capital equipment inched up, after showing no change in the previous month. Prices for finished consumer goods excluding foods and energy increased 0.3 percent, the same as in June.

Before seasonal adjustment, the Producer Price Index for Finished Goods moved up 0.2 percent in July to 130.9 (1982=100). From July 1997 to July 1998, the Finished Goods Price Index decreased 0.3 percent. Over the past 12 months, prices for finished goods other than foods and energy rose 1.1 percent, and the index for finished consumer foods rose 0.4 percent. On the other hand, prices for finished energy goods declined 7.5 percent. Prices received by domestic producers of intermediate goods declined 1.7 percent for the 12 months ended in July, and the index for crude goods fell 9.3 percent during the same period.

Finished goods

The index for finished energy goods increased 0.3 percent, after declining 1.7 percent in June. Prices for residential electric power moved up 1.1 percent in July, after decreasing 0.9 percent in the previous month. The indexes for residential natural gas and finished lubricants also turned up, after falling in the prior month. Prices for home heating oil fell less than a month ago. By contrast, gasoline prices fell 1.3 percent in July, after showing no change in the previous month.

Prices for finished consumer foods increased 0.4 percent in July, following a 0.1-percent rise a month earlier. The index for fresh and dry vegetables turned up 21.3 percent, after falling 9.0 percent in the previous month. Prices for finfish and shellfish and for processed fruits and vegetables also rose, after decreasing in June. The index for beef and veal fell less than in June. Prices for dairy products and processed young chickens increased more than in the prior month. Conversely, pork prices moved down 10.9 percent, after rising 7.0 percent in June. The index for eggs for fresh use also fell after increasing in the previous month. Price increases for processed turkeys slowed from June to July, and roasted coffee prices fell more than a month ago.

In July, prices for finished consumer goods other than foods and energy increased 0.3 percent. This increase was led by a 0.8-percent increase in the index for passenger cars and a 1.7-percent advance in prescription drugs. Over the past 12 months, prescription drugs increased 22.3 percent. Nearly three-fourths of that gain was due to a 243.4-percent jump in psychotherapeutic drugs. Prices for prescription drugs, exclusive of psychotherapeutic drugs, rose 6.1 percent in the 12 months ended July 1998. Other noteworthy July price increases occurred for light motor trucks, sanitary papers and health products, men's and boys' apparel, and household appliances. By contrast, prices for girls', children's, and infants' apparel, book publishing, women's apparel, and textile house furnishings declined in July.

The index for capital equipment rose 0.1 percent in July, after showing no change in June. Price increases for light motor trucks, communication and related equipment, and pumps and compressors more than offset declining prices for electronic computers, civilian aircraft, and x- ray and electromedical equipment.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components showed no change in July, following a 0.3-percent decline in June. Prices for intermediate energy goods, construction materials, and intermediate foods and feeds turned up, after falling in the prior month. The index for durable manufacturing materials fell less than a month ago. By contrast, prices for nondurable manufacturing materials decreased more than in June. Excluding foods and energy, the index for intermediate materials showed no change, following a 0.1-percent decline a month ago. (See Table B.)

The index for intermediate energy materials rose 0.4 percent, after dropping 1.7 percent in June. Prices for commercial electric power turned up 1.2 percent, following a similar decrease in the prior month. The index for jet fuels showed no change, after falling a month ago. Prices for diesel fuel and liquefied petroleum gas fell less than in the previous month. The index for commercial natural gas rose, after falling in June. By contrast, prices for gasoline declined 1.3 percent in July, after showing no change in the prior month. The index for residual fuel fell, after rising a month ago. Prices for natural gas to electric utilities rose less than in the previous month.

The index for durable manufacturing materials declined 0.3 percent, following a 0.8-percent drop in June. Price decreases for aluminum, aluminum mill shapes, copper cathode and refined copper, and for hot rolled bars, plates, and structural shapes outweighed price increases for plywood, hot rolled sheet and strip, building paper and board, and cement.

The index for intermediate foods and feeds turned up 0.2 percent, after declining 0.4 percent a month ago. Prices for prepared animal feeds rose 1.7 percent, following a 0.2-percent decrease in the prior month. The indexes for flour, crude vegetable oils, and for beef and veal fell less than in June. Prices for natural, processed, and imitation cheese and for mayonnaise, salad dressings and sandwich spreads rose more than in the previous month. By contrast, the index for pork fell 10.9 percent, following a 7.0-percent rise in the prior month. Prices for refined sugar and confectionery materials also turned down, after rising in June. The index for condensed and evaporated milk fell more than in the previous month.

The index for materials and components for construction increased 0.2 percent in July, following a 0.1 percent decrease in June. Prices for softwood lumber, plywood, and asphalt felts and coatings also rose, after falling in the prior month. The indexes for gypsum products and cement increased more than in the previous month. Prices for plastic construction products decreased less than in June. By contrast, the index for fabricated structural metal products turned down 0.1 percent, after rising 0.2 percent a month ago. Prices for nonferrous wire and cable, heating equipment, and fabricated ferrous wire products also fell, following price increases in the prior month. The index for wiring devices showed no change, after rising in the previous month.

The index for materials for nondurable manufacturing declined 0.4 percent in July, following a 0.1 percent decrease a month ago. Prices for paperboard fell 1.5 percent, after rising 0.3 percent in June. The indexes for basic inorganic chemicals and for inedible fats and oils also turned down, following an increase in the prior month. Prices for fertilizer materials gained less than a month ago, and the index for medicinal and botanical chemicals showed no change, after rising in June. By contrast, prices for basic organic chemicals increased 0.3 percent in July, following a 0.4-percent decrease in the previous month. The index for paint materials also turned up after falling in June, and prices for woodpulp rose faster than a month ago.

Crude Goods

The Producer Price Index for Crude Materials for Further Processing decreased 1.8 percent in July, seasonally adjusted, following a 1.4-percent decline in June. Prices for crude foodstuffs and feedstuffs turned down after rising in the prior month. The index for basic industrial materials fell more than in the previous month. By contrast, prices for crude energy materials fell less than a month ago. (See table B.)

Prices for crude foodstuffs and feedstuffs fell 2.8 percent, following a 0.1-percent increase in June. The index for slaughter hogs dropped 22.8 percent, after a 4.2-percent advance a month earlier. Prices for slaughter cattle and Irish potatoes for processing also turned down after rising in June. The index for slaughter broilers and fryers rose less than last month. On the other hand, the index for corn turned up 0.4 percent, following a 4.9-percent decline in the prior month. Prices for fresh and dry vegetables, soybeans, and for fresh vegetables, except potatoes also rose after falling in the previous month.

The index for crude nonfood materials less energy fell 1.8 percent, following a 0.5-percent decline in June. Prices for cattle hides turned down 9.5 percent, after an 18.4-percent advance in the prior month. The indexes for aluminum base scrap and for iron and steel scrap fell more than in the previous month. Prices for hardwood logs turned down 16.3 percent, following a 0.1-percent gain a month ago. By contrast, the index for nonferrous metal ores decreased 1.2 percent, after a 3.7-percent drop in the prior month. Prices for softwood logs, gold ores, and for construction sand, gravel, and crushed stone rose, after falling in the previous month.

Prices for crude energy materials fell 0.6 percent in July, following a 3.9-percent drop in June. A 3.3-percent decline in coal and a 2.9- percent decrease in natural gas more than offset a 7.4-percent advance in crude petroleum.

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 0.6 percent in July, following a 3.8-percent decrease in June. (Net output price indexes are not seasonally adjusted.) Prices for the metal mining industry group fell 0.9 percent, after decreasing 2.8 percent in the prior month. The net output index for natural gas liquids also fell less than in June. Prices for the bituminous coal and lignite industry turned down after rising last month. By contrast, the net output index for crude petroleum rose 7.4 percent, after falling 12.2 percent in the previous month. Prices for the crushed and broken stone industry and the chemical and fertilizer mineral mining industry also turned up after declining in June. In July, the Producer Price Index for the net output of total domestic mining industries stood at 70.7 (December 1984=100), which is 11.1 percent below its year-ago level.

Manufacturing. The Producer Price Index for the net output of total domestic manufacturing industries was unchanged in July, after decreasing 0.1 percent in June. Price increases for the lumber and wood products, chemicals and allied products, nonmetallic mineral products, and paper and allied products industry groups more than offset price declines for the petroleum refining and textile mill products industry groups. In July, the Producer Price Index for the net output of total domestic manufacturing industries stood at 126.2 (December 1984=100), which is 0.6 percent below its year-ago level.

Other. Among other industries in July, price decreases reported by the real estate agents and managers, telephone communications, offices and clinics of doctors of medicine, and for cable and other pay television services industries, while price increases occurred for the operators of nonresidential buildings, passenger car rental, hotels and motels, and radio broadcasting industries.

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. Twenty-six (26) manufacturing industries, and one (1) service industry were resampled this month. In addition, a new service industry, SIC 6331 Property and casualty insurance, was 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

2026 Fluid milk 2041 Flour and other grain mill products 2045 Prepared flour mixes and doughs 2066 Chocolate and cocoa products 2099 Food preparations, not elsewhere classified 2391 Curtains and draperies 2452 Prefabricated wood buildings and components 2521 Wood office furniture 2679 Converted paper and paperboard products, not elsewhere classified 2823 Cellulosic manmade fibers 2824 Noncellulosic manmade fibers 2952 Asphalt felts and coatings 3363 Aluminum die casting 3364 Nonferrous die castings, except aluminum 3365 Aluminum foundries 3366 Copper foundries (castings, except die) 3369 Nonferrous castings, except aluminum and copper, and excluding die castings 3429 Hardware, not elsewhere classified 3432 Plumbing fixture fittings and trim 3462 Iron and steel forgings 3463 Nonferrous forgings 3465 Automotive stampings 3469 Metal stampings, not elsewhere classified 3496 Miscellaneous fabricated wire products 3593 Fluid power cylinders and actuators 3645 Residential lighting fixtures 4449 Water transportation of freight, not elsewhere classified 6331* Property and casualty insurance 9331* Premium for property and casualty insurance

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 PPI Detailed Report.

* See "New Producer Price Indexes for Property and Casualty Insurance - SIC 6331 and SIC 9331" in the July 1998 issue of the PPI Detailed Report.