September 1998 Producer Price Index

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The Producer Price Index for Finished Goods increased 0.3 percent in September, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This followed a decrease of 0.4 percent in August. The index for finished goods other than foods and energy advanced 0.4 percent in September, after edging down 0.1 percent in August; increases in the seasonally adjusted indexes for passenger cars and light motor trucks accounted for three-fourths of the September advance. Prices received by producers of intermediate goods declined 0.2 percent, following a 0.3-percent decrease in the prior month. The crude goods index fell 1.6 percent, after a 2.7-percent decline in August. (See table A.)

Among finished goods in September, the index for finished consumer goods other than foods and energy advanced, after showing no change in the prior month. Prices for finished consumer foods and capital equipment rose, following decreases in the previous month. Prices for finished energy goods fell less than in August.

Change in Except finished Inter- goods foods from 12 mediateCrude and months Month Total Foods Energy energy ago goods goods (unadj.) 1997 Sept. 0.4 0.0 1.1 0.4 0.0 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

For the first nine months of 1998, the Producer Price Index for Finished Goods declined at a 0.8-percent seasonally adjusted annual rate (SAAR). This compares with a 1.2-percent decrease during all of 1997. Prices for finished goods other than foods and energy rose at a 1.6 percent SAAR for the first nine months of 1998, after showing no change in the prior year. Prices for intermediate goods fell at a 3.0-percent SAAR from December 1997 to September 1998, following a 0.8-percent decline during calendar year 1997. The index for crude goods dropped at a 19.3-percent SAAR during the first nine months of 1998, after an 11.3-percent decrease during all of 1997.

During the third quarter of 1998, the Finished Goods Price Index moved up at a 0.6-percent SAAR, after showing no change in the second quarter. The index for finished consumer foods rose at an annual rate of 2.1 percent from June to September, after increasing at a 0.6-percent rate during the second quarter of 1998. Prices for finished energy goods fell at an 8.3- percent SAAR from June 1998 to September 1998, following a 3.1-percent annual rate of decline over the previous three months. The finished goods index other than foods and energy increased at a 2.0-percent annual rate from June to September, after rising at a 0.6-percent rate in the prior quarter. The Intermediate Goods Price Index fell at a seasonally adjusted annual rate of 1.9 percent during the third quarter, after declining at a 1.6-percent rate during the second quarter. The Crude Goods Price Index dropped at a 21.9-percent SAAR during the third quarter of 1998, after decreasing at a 3.2-percent rate from March 1998 to June 1998.

Before seasonal adjustment, the Producer Price Index for Finished Goods showed no change in September at 130.6 (1982=100). From September 1997 to September 1998, the Finished Goods Price Index decreased 0.9 percent. Over the past 12 months, the index for finished energy goods fell 11.6 percent, prices for finished consumer foods advanced 0.5 percent, and prices for finished goods other than foods and energy increased 1.1 percent. Prices received by domestic producers of intermediate goods declined 2.4 percent for the 12 months ended in September, and the index for crude goods fell 14.4 percent during the same period.

Finished goods

Prices for finished consumer goods other than foods and energy advanced 0.5 percent in September, after showing no change a month earlier. This index rose 3.3 percent on an SAAR basis during the third quarter of 1998, following a 1.4-percent rate of increase in the previous quarter. In September, prices for passenger cars rose 2.2 percent, after declining 1.7 percent in the prior month. Before seasonal adjustment, the index for passenger cars fell 0.4 percent in September, following a 2.2 percent decrease in the previous month. The indexes for light motor trucks, prescription drugs, and women's apparel turned up, following declines in August. Prices for alcoholic beverages rose, after showing no change a month earlier. By contrast, the index for children's apparel turned down 1.6 percent, after registering a 5.2-percent advance in the previous month. Prices for book publishing also turned down, after rising a month earlier. The index for tobacco products rose less than in August.

Prices for finished consumer foods moved up 0.4 percent in September, after falling 0.4 percent in the prior month. The index for fresh and dry vegetables rose 12.4 percent, following a 20.6-percent drop last month. Prices for shortening and cooking oils, processed turkeys, and milled rice also turned up, after decreasing in August. The indexes for dairy products and processed young chickens rose more than in the previous month. Roasted coffee prices were unchanged in September, following a decline in August. On the other hand, prices for eggs for fresh use declined 8.8 percent, after rising 8.9 percent a month ago. The indexes for pork and for finfish and shellfish also turned down, after increasing in the prior month. Prices for beef and veal declined more than in August.

Prices for capital equipment rose 0.4 percent in September, after declining 0.3 percent last month. This index moved up at a 0.6-percent annual rate in the third quarter, after falling at a 0.9-percent rate between March 1998 and June 1998. In September, prices for light motor trucks increased 2.0 percent, after falling 0.1 percent a month earlier. Before seasonal adjustment, the index for light motor trucks declined 1.0 percent, following a 0.2-percent decline in the prior month. The indexes for civilian aircraft and heavy motor trucks turned up, following decreases in August. Prices for transformers and power regulators rose, after showing no change in the prior month. Prices for electronic computers fell less than in the prior month. By contrast, the index for communication and related equipment declined 0.7 percent, following a 0.3-percent decrease a month ago. Prices for agricultural machinery and equipment turned down, after rising a month ago. The index for construction machinery and equipment showed no change, following an increase in August.

The index for finished energy goods declined 0.1 percent in September, following a 2.3-percent decrease in August. Prices for gasoline fell 2.0 percent, after dropping 8.5 percent last month. The indexes for residential electrical power and home heating oil turned up in September, following decreases in the previous month. By contrast, prices for residential natural gas and finished lubricants turned down, after increasing in August.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components declined 0.2 percent in September, seasonally adjusted, following a 0.3-percent decline in August. Falling prices for nondurable manufacturing materials, durable manufacturing materials, and intermediate foods and feeds outweighed rising prices for intermediate energy goods. The index for materials and components for construction showed no change in September. Prices for intermediate materials excluding foods and energy posted a 0.3-percent decrease, after decreasing 0.1 percent in the prior month. (See table B.)

The index for nondurable manufacturing materials declined 0.9 percent in September, following a 0.4-percent decline in August. This index fell at a 6.7-percent SAAR during the third quarter of 1998, after falling at a 1.9-percent rate during the second quarter. In September, prices for plastic resins and materials decreased 2.4 percent, after posting a 0.4- percent increase in the previous month. The indexes for industrial chemicals and for paperboard fell more than last month. Prices for synthetic fibers, fertilizer materials, and processed yarns and threads declined, following advances one month ago. By contrast, the index for woodpulp declined 2.9 percent, after a 4.6-percent decline one month earlier. Prices for finished fabrics rose, after falling in August.

The index for durable manufacturing materials declined 0.5 percent in September, following a 0.1-percent advance in August. This index fell at a 2.8-percent SAAR from June 1998 to September 1998, after falling at a 4.8- percent rate during the second quarter. In September, prices for steel mill products decreased 1.1 percent, after posting a 0.3-percent decrease in the prior month. The indexes for plywood and for building paper and board rose less than one month ago. Prices for aluminum fell more than last month. On the other hand, the index for flat glass advanced 1.0 percent, following a 1.9-percent decline in the previous month. Prices for aluminum mill shapes rose more than a month earlier. The indexes for copper and brass mill shapes and for copper cathode and refined copper increased, after registering declines in August.

The index for intermediate foods and feeds declined 0.5 percent in September, following a 0.9-percent decline in August. This index fell at a 5.1-percent SAAR during the third quarter, after falling at a 3.7-percent rate in the previous quarter. In September, decreasing prices for prepared animal feeds, beef and veal, pork, flour, and confectionery materials outweighed increasing prices for fluid milk products, condensed and evaporated milk products, and crude vegetable oils.

The index for intermediate energy materials advanced 0.6 percent in September, following a 1.5-percent decline in August. This index fell at a 2.0-percent SAAR during the third quarter of 1998, after falling at a 6.2- percent rate in the previous quarter. In September, prices for residual fuel increased 11.3 percent, following a 16.3-percent decrease in the previous month. Prices for diesel fuel and commercial electric power also advanced, after declining in the prior month. The indexes for gasoline and for jet fuels fell less than last month. By contrast, prices for commercial natural gas declined 1.2 percent, following a 1.1-percent advance in the prior month. Prices for liquefied petroleum gas and coke oven products decreased more than a month ago.

Prices for materials and components for construction were unchanged in September, after a 0.2-percent advance in August. This index rose at a 1.6- percent SAAR for the third quarter of 1998, following a 0.3-percent rate of increase during the second quarter. In September, the index for softwood lumber decreased 5.1 percent, after posting a 1.4-percent increase in the previous month. Prices for plywood and for asphalt felts and coatings rose less than in the prior month. The index for fabricated ferrous wire products fell, after showing no change in August. On the other hand, prices for fabricated structural metal products advanced 0.1 percent, following a 0.1-percent decline in the prior month. The indexes for millwork and gypsum products also rose, after falling last month. Prices for nonferrous wire and cable fell less than in August.

Crude Goods

The Producer Price Index for Crude Materials for Further Processing fell 1.6 percent in September, seasonally adjusted, following a 2.7-percent decline in August. Prices for crude energy materials and basic industrial materials fell less than in the previous month. By contrast, prices for crude foodstuffs and feedstuffs fell more than a month ago. (See table B.)

Prices for crude energy materials fell 1.7 percent, after a 5.1- percent drop in August. This index dropped at a 25.9-percent SAAR from June 1998 to September 1998, following a 2.3-percent rate of decline in the second quarter. In September, the index for crude petroleum turned up 18.4 percent, after decreasing 15.5 percent in the previous month. By contrast, the index for natural gas fell 9.7 percent, following a 2.4-percent decline in the prior month. Prices for coal declined in September, after turning up in August.

The index for crude nonfood materials less energy dropped 1.3 percent, following a 2.0-percent decline in August. This index fell at an 18.8- percent SAAR in the third quarter of 1998, after decreasing at a 5.0- percent rate in the second quarter. In September, raw cotton prices turned up 5.9 percent, following a 2.4-percent decrease in the previous month. Prices for gold ores, aluminum base scrap, and for hardwood logs, bolts and timber also increased, after declining a month ago. The index for copper base scrap fell less than in August. By contrast, prices for iron and steel scrap fell 9.6 percent in September, after decreasing 7.4 percent in the prior month. The index for copper ores rose less than in the previous month. Prices for cattle hides and for softwood logs, bolts, and timber turned down, after increasing a month ago.

Prices for crude foodstuffs and feedstuffs fell 1.9 percent, following a 1.1-percent decrease in August. This index decreased at a 20.9-percent SAAR from June 1998 to September 1998, following a 3.0-percent rate of decrease in the second quarter. In September, the index for slaughter hogs fell 9.0 percent, after increasing 0.8 percent in the previous month. Prices for slaughter broilers also turned down, following an increase last month. The indexes for slaughter cattle and corn fell more than in August. By contrast, the index for fresh vegetables, except potatoes, advanced 17.5 percent, after falling 25.2 percent a month ago. Prices for soybeans and wheat fell less than in August.

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 1.3 percent in September, following a 3.5-percent decrease in August. (Net output price indexes are not seasonally adjusted.) During the third quarter of 1998, this index declined at an annual rate of 19.7 percent, after decreasing at a 6.0-percent rate in the second quarter. In September, prices for the crude petroleum and natural gas industry fell 1.4 percent, after falling 6.6 percent in the prior month. The indexes for iron ores and industrial sand industries rose, after showing no change in August. By contrast, prices for the lead and zinc ores industry dropped 4.0 percent, following a 6.1-percent advance in the prior month. The indexes for the potash, soda, and borate minerals and the bituminous coal and lignite industries also fell, after rising in the previous month. In September, the Producer Price Index for the net output of total domestic mining industries stood at 67.3 percent (December 1984=100), 18.8 percent below its year-ago level.

Manufacturing. The Producer Price Index for the net output of total domestic manufacturing industries showed no change in September, after declining 0.2 percent in August. During the third quarter of 1998, this index declined at an annual rate of 0.6 percent, following a 1.0-percent rate of increase for the previous quarter. In September, prices for the petroleum refining industry group turned up 1.3 percent, after falling 4.1 percent in the previous month. The index for the machinery, except electrical, industry group also rose, following a decrease in August. Prices for the transportation industry group fell less than a month ago. The index for the nonmetallic mineral products industry group advanced, after showing no change in the previous month. By contrast, prices for the food and kindred products and the leather and leather products industry groups fell, following an increase a month ago. The indexes for the primary metal industries, the textile mill products, and the chemical and allied products industry groups fell more than in the prior month. In September, the Producer Price Index for the net output of total domestic manufacturing industries stood at 126.0 (December 1984=100), 1.0 percent below its year-ago level.

Other. Among other industries in September, price increases for the scheduled air transportation, offices and clinics of doctors of medicine, trucking (except local), radio broadcasting, legal services, freight transportation arrangement, and local trucking without storage industries more than offset price decreases for the operators and lessors of nonresidential buildings, hotels and motels, real estate agents and managers, general medical and surgical hospitals, and truck rental and leasing (without drivers) 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. 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 May 1998 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.

1/ The indexes for May 1998 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. Table 3. Producer price indexes for selected commodity groupings (1982=100 unless otherwise indicated)

1/ Data for May 1998 have been revised to reflect the availability of late reports and corrections by respondents. All data are subject to revision four 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 May 1998 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. Table 5. Producer price indexes by stage of processing, seasonally adjusted (1982=100)

1/ All seasonally adjusted indexes are subject to change up to five years after original publication due to the recalculation of seasonal factors each January. The indexes for May 1998 have been recalculated to incorporate late reports and corrections by respondents. 2/ Includes crude petroleum. 3/ Excludes crude petroleum.