October 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 October, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a rise of 0.3 percent in September and a decline of 0.4 percent in August. The index for finished goods other than foods and energy inched up 0.1 percent in October, after advancing 0.4 percent in the prior month. Prices received by producers of intermediate goods declined 0.2 percent, the same as in September. The crude goods index rose 1.7 percent, after a 1.6-percent decline in the previous month. (See table A.)

Among finished goods, prices for finished energy goods turned up 1.2 percent, after edging down 0.1 percent in September. The index for finished consumer foods rose 0.4 percent for the second consecutive month. Prices for finished consumer goods other than foods and energy and capital equipment were unchanged, after advancing in the prior month.

Change in Except finished Inter- goods foods from 12 mediateCrude and months Month Total Foods Energy energy ago goods goods (unadj.) 1997 Oct. 0.0 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 10 months of 1998, the Producer Price Index for Finished Goods declined at a 0.5-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 1.5-percent SAAR for the first ten months of 1998, after showing no change in the prior year. The index for intermediate goods fell at a 2.9-percent SAAR from December 1997 to October 1998, following a 0.8-percent decline during calendar year 1997. Prices for crude goods dropped at a 15.8-percent SAAR during the first ten months of 1998, after an 11.3-percent decrease during all of 1997.

Before seasonal adjustment, the Producer Price Index for Finished Goods rose 0.6 percent in October to stand at 131.4 (1982=100). From October 1997 to October 1998, the Finished Goods Price Index decreased 0.7 percent. Over the past 12 months, prices for finished consumer foods advanced 0.3 percent, the index for finished energy goods fell 10.1 percent, and prices for finished goods other than foods and energy increased 1.1 percent. Prices received by domestic producers of intermediate goods declined 2.5 percent for the 12 months ended in October, and the index for crude goods fell 16.7 percent during the same period.

Finished goods

The index for finished energy goods advanced 1.2 percent in October, following 0.1-percent decrease in September. Gasoline prices turned up 5.7 percent, following a 2.0-percent decline in September. Prices for residential natural gas and finished lubricants also increased, after falling in the previous month. By contrast, price increases for residential electric power slowed from 0.5 percent in September to 0.1 percent in October. Home heating oil prices fell 0.4 percent, after rising 6.6 percent in the prior month.

The index for finished consumer foods moved up 0.4 percent in October, the same as in September. Price increases for fresh and dry vegetables, dairy products, eggs for fresh use, bakery products, processed turkeys, and fresh fruits and melons outweighed price decreases for pork, finfish and shellfish, beef and veal, roasted coffee, and processed young chickens.

The index for finished consumer goods other than foods and energy showed no change in October, after advancing 0.5 percent in September. This deceleration was primarily caused by passenger car prices which rose 0.5 percent, following a 2.2-percent increase in the previous month, and light motor truck prices which showed no change, after advancing 2.0 percent in September. (In accordance with our usual practice, most new model year passenger cars and light trucks were introduced into the PPI in October. See "Report on Quality Changes for 1999 Model Vehicles.") On the other hand, the indexes for book publishing and for girls', children's, and infants' apparel turned up, following decreases in September. Prices for sanitary paper and health products fell less than in the previous month.

The index for capital equipment showed no change in October, after rising 0.4 percent in September. Prices for light motor trucks were unchanged, following a 2.0-percent increase in the previous month. The index for transformers and power regulators also showed no change, after rising in the prior month. Prices for electronic computers fell more than in September. By contrast, prices for communication and related equipment and for agricultural machinery and equipment turned up, after falling a month earlier. The index for heavy motor trucks rose more rapidly than in September.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components dropped 0.2 percent in October, seasonally adjusted, following a 0.2-percent decline in September. Declining prices for nondurable manufacturing materials, durable manufacturing materials, materials and components for construction, and intermediate foods and feeds outweighed rising prices for intermediate energy goods. Excluding foods and energy, the index for intermediate materials fell 0.3 percent, the same rate as in September. (See table B.)

The index for nondurable manufacturing materials declined 0.7 percent in October, following a 0.9-percent decline in September. Falling prices for plastic resins and materials, paperboard, gray fabrics, nitrogenates, and synthetic fibers more than offset rising prices for paint materials, inedible fats and oils, paper, and phosphates.

The index for durable manufacturing materials declined 0.9 percent in October, after falling 0.5 percent a month ago. Prices for plywood dropped 8.3 percent, following a 2.8-percent increase in September. The indexes for aluminum mill shapes, building paper and board, copper cathode and refined copper, and copper and brass mill shapes turned down, after advancing in the previous month. The index for hot rolled sheet and strip fell more than last month. By contrast, October prices for aluminum rose 1.5 percent, after declining 3.1 percent in the prior month. The index for cold rolled sheets and strip fell less than a month ago.

The index for materials and components for construction declined 0.3 percent, after showing no change in September. The October index for plywood declined 8.3 percent, following a 2.8-percent rise in the previous month. Prices for steel wire also turned down, after rising in the prior month. Air conditioning and refrigeration equipment prices showed no change, after increasing in September. The index for nonferrous wire and cable fell more than a month ago. By contrast, prices for softwood lumber fell 1.8 percent, after declining 5.1 percent last month. The indexes for switchgear, millwork, and gypsum products rose more than in September.

The index for intermediate foods and feeds fell 0.2 percent, after dropping 0.5 percent in September. Prices for prepared animal feeds declined 2.1 percent, following a 4.1-percent decline last month. The indexes for flour; natural, processed, and imitation cheese; and confectionery materials turned up, after falling in the previous month. By contrast, the index for crude vegetable oils fell 5.4 percent in October, after advancing 9.1 percent a month ago. Prices for fluid milk products rose less than in the previous month.

The index for intermediate energy goods increased 0.5 percent in October, after posting a 0.6-percent increase in September. Rising prices for gasoline, jet fuels, commercial electric power, natural gas to electric utilities, and liquefied petroleum gas outweighed falling prices for diesel fuel, residual fuel, industrial electric power, and industrial natural gas.

Crude Goods

The Producer Price Index for Crude Materials for Further Processing turned up 1.7 percent in October, seasonally adjusted, after falling 1.6 percent in September. Prices for crude foodstuffs and feedstuffs and crude energy materials also rose, after falling in the prior month. By contrast, prices for basic industrial materials fell more than in the previous month. (See table B.)

Prices for crude foodstuffs and feedstuffs advanced 4.0 percent, following a 1.9-percent decrease in September. This acceleration was broadly based. The index for corn turned up 13.9 percent, after a 6.5- percent drop in the prior month. Prices for slaughter cattle, wheat, slaughter hogs, slaughter broilers and fryers, and soybeans also turned up, after falling in the previous month. The indexes for fluid milk and unprocessed finfish rose more than a month ago.

Prices for crude energy materials turned up 1.9 percent in October, following a 1.7-percent drop in September. The index for natural gas rose 5.0 percent, after falling 9.7 percent in the prior month. Prices for coal also increased after decreasing in the previous month. By contrast, the index for crude petroleum fell 2.2 percent, after gaining 18.4 percent a month ago.

The index for crude nonfood materials less energy dropped 2.7 percent, after declining 1.3 percent in September. Iron and steel scrap prices fell 12.4 percent, following a 9.6-percent decrease in the prior month. Prices for raw cotton and copper ores turned down, after rising in the previous month. The index for cattle hides fell more than a month ago. By contrast, prices for aluminum base scrap rose 2.5 percent, following a 1.1- percent increase in the prior month. The index for construction, sand, gravel, and crushed stone turned up, after falling in the previous month.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries rose 1.2 percent in October, following a 1.3-percent drop in September. (Net output price indexes are not seasonally adjusted.) Prices for the oil and gas extraction industry group advanced 1.7 percent, after posting a 1.5-percent decline in the prior month. The indexes for the coal mining industry group and the mining and quarrying of non-metallic minerals, except fuels industry group advanced, after declining a month ago. By contrast, prices for the metal mining industry group decreased 2.3 percent, following a 0.8-percent increase last month. In October, the Producer Price Index for the Net Output of Total Mining Industries stood at 68.1 (December 1984=100), 24.5 percent below its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries increased 0.3 percent in October, after showing no change in September. Prices for the transportation equipment industry group advanced 2.7 percent, after registering a 0.2-percent decline in the previous month. The indexes for the petroleum refining and related products industry group and the printing, publishing, and allied products industry group rose more than a month earlier. Prices for the paper and allied products industry group fell less than in the prior month. Conversely, the index for the food and kindred products industry group decreased 0.6 percent, following a 0.2-percent decline in September. Prices for the chemicals and allied products industry group and the lumber and wood products, except furniture industry group also fell more than a month ago. The indexes for the machinery, except electrical industry group and the stone, clay, glass, and concrete products industry group turned down, after posting increases in the previous month. In October, the Producer Price Index for the Net Output of Total Manufacturing Industries stood at 126.4 (December 1984=100), 0.9 percent below its year-ago level.

Other. Among other industries in October, price increases for operators and lessors of nonresidential buildings, real estate agents and managers, general medical and surgical hospitals, hotels and motels, skilled and intermediate care facilities, and property and casualty insurance outweighed price declines for telephone communications, except radiotelephone; scheduled air transportation; passenger car rental, without drivers; and deep sea foreign transportation of freight.

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 June 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 June 1998 have been recalculated to incorporate 2/ Not seasonally adjusted. late reports and corrections by respondents. All indexes are 3/ Not available. 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 June 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 June 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 June 1998 have been recalculated to incorporate late reports and corrections by respondents. 2/ Includes crude petroleum. 3/ Excludes crude petroleum.