November 1998 Producer Price Index

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The Producer Price Index for Finished Goods decreased 0.2 percent in November, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decline followed a rise of 0.2 percent in October and an advance of 0.3 percent in September. The index for finished goods other than foods and energy rose 0.1 percent, following a similar increase a month ago. Prices received by producers of intermediate goods declined 0.2 percent for the third consecutive month. The crude goods index fell 1.4 percent, after a 1.7-percent increase in October. (See table A.)

Among finished goods, prices for finished energy goods decreased 1.2 percent, following a 1.2-percent advance in October. The index for finished consumer foods also turned down, after rising in the previous month. Prices for finished consumer goods other than foods and energy and for capital equipment edged up.

Change in Except finished Inter- goods foods from 12 mediateCrude and months Month Total Foods Energy energy ago goods goods (unadj.) 1997 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 11 months of 1998, the Producer Price Index for Finished Goods declined at a 0.6-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 11 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 November 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 11 months of 1998, after an 11.3-percent decrease during all of 1997.

Before seasonal adjustment, the Producer Price Index for Finished Goods decreased 0.5 percent in November to stand at 130.8 (1982=100). From November 1997 to November 1998, the finished goods price index decreased 0.7 percent. Over the past 12 months, prices for finished consumer foods advanced 0.1 percent, the index for finished energy goods fell 11.0 percent, and prices for finished goods other than foods and energy increased 1.3 percent. Prices received by domestic producers of intermediate goods declined 2.9 percent for the 12 months ended in November, and the index for crude goods fell 19.0 percent during the same period.

Finished goods

The index for finished energy goods declined 1.2 percent in November, following a 1.2-percent advance in October. Gasoline prices dropped 6.9 percent, after rising 5.7 percent in the previous month. The index for finished lubricants also turned down in November, following an increase in the prior month. Home heating oil prices fell more than in October. The index for residential natural gas rose less than a month ago. By contrast, prices for residential electric power rose more than in October.

The index for finished consumer foods moved down 0.5 percent in November, after advancing 0.4 percent in October. Prices for fresh and dry vegetables declined 16.1 percent, following a 13.5-percent rise a month ago. Prices for eggs for fresh use, fresh fruits and melons, and dairy products also fell, after increasing in the previous month. By contrast, the index for beef and veal turned up 0.8 percent, following a 2.1-percent decline in October. Prices for processed fruits and vegetables and roasted coffee also turned up, after falling in the prior month.

The index for capital equipment turned up 0.1 percent in November, after showing no change in October. Price increases for heavy motor trucks, light motor trucks, and for X-ray and electromedical equipment slightly outweighed price decreases for electronic computers, civilian aircraft, and railroad equipment.

The index for finished consumer goods other than foods and energy rose 0.1 percent in November, following no change in October. Rising prices for alcoholic beverages, passenger cars, light motor trucks, and sanitary papers and health products offset falling prices for soaps and synthetic detergents and for men's and boys' apparel.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components declined 0.2 percent in November, seasonally adjusted, after registering a similar 0.2-percent decline in October. Falling prices for intermediate energy goods, nondurable manufacturing materials, durable manufacturing materials, and for materials and components for construction outweighed rising prices for intermediate foods and feeds. Excluding foods and energy, the index for intermediate materials decreased 0.2 percent, following a 0.3-percent decrease a month earlier. (See table B.)

The index for intermediate energy goods declined 0.8 percent in November, after posting a 0.5-percent advance in October. Prices for gasoline decreased 6.9 percent, following a 5.7-percent increase in the prior month. The indexes for jet fuels, commercial electric power, natural gas to electric utilities, and commercial natural gas also fell, after rising last month. Liquefied petroleum gas prices rose less than in the previous month. By contrast, the index for industrial electric power gained 1.5 percent, following a 0.5-percent drop in October. The indexes for industrial natural gas and residual fuels also rose, after falling a month earlier. Prices for diesel fuel fell less than a month ago.

The index for nondurable manufacturing materials declined 0.6 percent in November, following a 0.7-percent decline in October. Falling prices for plastic resins and materials, paper, paperboard, woodpulp, nitrogenates, and finished fabrics outweighed rising prices for basic organic chemicals, gray fabrics, and phosphates.

The index for durable manufacturing materials fell 0.6 percent in November, after registering a 0.9-percent drop in October. Declining prices for steel mill products, primary nonferrous metals, building paper and board, hardwood lumber, and copper and brass mill shapes outweighed rising prices for plywood, prepared paint, and cement.

The index for materials and components for construction declined 0.1 percent in November, following a 0.3-percent decline in October. Price decreases for softwood lumber, nonferrous wire and cable, wiring devices, and millwork offset rising prices for plywood, gypsum products, metal valves, and automobile stampings.

The index for intermediate foods and feeds advanced 0.6 percent, after posting a 0.2-percent decline in October. Prices for prepared animal feeds rose 1.4 percent, following a 2.1-percent drop in the prior month. The indexes for crude vegetable oils and for beef and veal also rose, after falling last month. Prices for pork fell less than a month ago. On the other hand, the index for fluid milk products decreased 0.6 percent, following a 1.8-percent increase in October. Prices for flour and for natural, processed, and imitation cheese advanced less than in the previous month. The index for confectionery materials moved down, after rising a month earlier.

Crude Goods

The Producer Price Index for Crude Materials for Further Processing turned down 1.4 percent in November, seasonally adjusted, after rising 1.7 percent in October. Prices for crude foodstuffs and feedstuffs also fell, after advancing in the prior month. The index for crude energy materials showed no change, following an increase a month ago. By contrast, the index for basic industrial materials fell less than in the previous month. (See table B.)

Prices for crude foodstuffs and feedstuffs declined 1.9 percent, following a 4.0-percent gain in October. The index for slaughter hogs dropped 30.9 percent, after a 0.4-percent rise in the prior month. Prices for slaughter broilers and fryers, slaughter cattle, and fresh and dry vegetables also turned down, after rising in the previous month. The index for corn rose less than a month ago. Conversely, prices for soybeans increased 4.1 percent, following a 1.9-percent rise in October. The indexes for unprocessed shellfish and raw cane sugar turned up, after falling in the previous month.

The index for crude energy materials showed no change in November, following a 1.9-percent advance in October. Prices for crude petroleum fell 7.4 percent, after a 2.2-percent decline in the prior month. The index for natural gas rose 2.7 percent, following a 5.0-percent gain a month ago. By contrast, prices for coal rose 2.5 percent, following a 0.4-percent increase in the previous month.

Prices for crude nonfood materials less energy declined 2.5 percent, after dropping 2.7 percent in October. Iron and steel scrap prices fell 8.5 percent, following a 12.4-percent decrease in the prior month. The indexes for cattle hides, copper ores, and pulpwood also fell less than in the previous month. On the other hand, prices for aluminum base scrap rose 0.1 percent, following a 2.5-percent increase a month ago. The indexes for gold ores and copper base scrap fell, after rising in the prior month. Prices for softwood logs, bolts, and timber decreased more than 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 fell 0.3 percent in November, following a 1.2-percent advance in October. (Net output price indexes are not seasonally adjusted.) Prices for the oil and gas extraction industry group turned down 0.5 percent, after showing a 1.7-percent increase in the prior month. By contrast, the index for the coal mining industry group rose 1.6 percent, following a 0.2- percent increase in October. The metal mining industry group index fell 2.2 percent, less than in the previous month. In November, the Producer Price Index for the Net Output of Total Mining Industries stood at 67.9 (December 1984=100), 27.1 percent below its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries decreased 0.2 percent in November, after registering a 0.3-percent increase in October. The index for the petroleum refining and related products industry group turned down 4.0 percent, following a 1.7-percent advance in October. Prices for the transportation equipment industry group were unchanged, following a 2.7-percent increase in the previous month. The index for the printing and publishing industry group rose less than a month ago. By contrast, prices for the food and kindred products, chemicals and allied products, and measuring and controlling instruments industry groups showed no change after falling in October. The index for the lumber and wood products industry group fell less than in the prior month. In November, the Producer Price Index for the Net Output of Total Manufacturing Industries stood at 126.2 (December 1984=100), 1.0 percent below its year-ago level.

Other. Among other industries in November, price declines were registered for real estate agents and managers, deep sea foreign transportation of freight, telephone communications (except radiotelephone), hotels and motels, water transportation of freight (not elsewhere classified), and passenger car rental (without drivers). These decreases offset price increases for operators and lessors of nonresidential buildings, scheduled air transportation, skilled and intermediate care facilities, general medical and surgical hospitals, building cleaning and maintenance services (not elsewhere classified), and accounting, auditing, and bookkeeping services.

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