January 1999 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 advanced 0.5 percent in January, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.4-percent advance in December and a 0.2-percent decline in November. Prices received by producers of intermediate goods increased 0.1 percent, following a 0.5- percent decline in the prior month. The crude goods index rose 2.6 percent, after registering a 4.0-percent drop a month earlier. (See table A.)

1999 Jan. .5 1.6 1.8 -.1 .9 .1 2.6 NOTE: Some percent changes shown here and elsewhere in this release may differ from those previously reported because seasonal adjustment factors have been recalculated to reflect developments during 1998. In addition, indexes for September 1998 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.

Among finished goods, rising prices for finished consumer foods and finished energy goods outweighed falling prices for finished consumer goods other than foods and energy and capital equipment. The index for finished goods excluding foods and energy fell 0.1 percent in January, after posting a 1.0-percent rise in December.

Before seasonal adjustment, the Producer Price Index for Finished Goods advanced 0.4 percent to stand at 131.5 (1982=100). From January 1998 to January 1999, the finished goods price index increased 0.9 percent. Over the same period, prices for finished consumer foods rose 1.9 percent, the index for finished energy goods fell 7.5 percent, and prices for finished goods other than foods and energy advanced 2.3 percent. Prices received by domestic producers of intermediate goods declined 2.4 percent for the 12 months ended in January, and the index for crude goods fell 10.6 percent during the same period.

Finished goods

The index for finished consumer foods advanced 1.6 percent in January, after showing no change in December. Prices for pork increased 18.3 percent, following a 4.5-percent decrease in the previous month. The index for citrus fruit advanced 64.0 percent, after moving up 13.6 percent in the prior month. Prices for dairy products rose more than a month ago. The indexes for beef and veal, finfish and shellfish, and eggs for fresh use turned up, after decreasing a month earlier. By contrast, the index for fresh and dry vegetables declined 9.8 percent, following a 10.8-percent advance in the prior month. Prices for soft drinks and for shortening and cooking oils fell, after rising last month.

1999 Jan. 1.1 1.8 -.2 -2.4 5.1 .6 .2 -10.6 NOTE: Some percent changes shown here and elsewhere in this release may differ from those previously reported because seasonal adjustment factors have been recalculated to reflect developments during 1998. In addition, indexes for September 1998 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.

The index for finished energy goods advanced 1.8 percent in January, after posting a 2.3-percent decline in December. Prices for gasoline increased 6.5 percent, following an 8.5-percent decrease a month earlier. The indexes for residential electric power, home heating oil, and finished lubricants also rose, after falling a month ago. Prices for residential natural gas increased more than in the prior month.

The index for finished consumer goods other than foods and energy declined 0.1 percent in January, after registering a 1.8-percent advance in December. Price decreases for passenger cars, floor coverings, tires, periodical circulation, and men's and boys' apparel slightly outweighed price increases for prescription drugs, book publishing, sanitary papers and health products, and newspaper circulation.

Prices for capital equipment declined 0.1 percent in January, after showing no change in December. Falling prices for electronic computers, construction machinery and equipment, office and store machines and equipment, truck trailers, and oil and gas field machinery and equipment outweighed rising prices for civilian aircraft, light motor trucks, communication and related equipment, and commercial furniture.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components edged up 0.1 percent in January, seasonally adjusted, after registering a 0.5-percent decline in December. Price indexes for both intermediate energy goods and intermediate foods and feeds turned up, following decreases a month ago. Prices for nondurable manufacturing materials fell less than in December. On the other hand, the index for durable manufacturing materials fell slightly more than in the previous month. Prices for construction materials edged up 0.1 percent for the second consecutive month. Excluding foods and energy, the index for intermediate materials fell 0.2 percent in January, the same as in the previous month. (See table B.)

The index for intermediate energy goods rose 1.8 percent in January, after posting a 3.2-percent decline in December. In January, gasoline prices turned up 6.5 percent, after falling 8.5 percent in the previous month. The index for jet fuels similarly increased 7.5 percent, following a 19.9-percent decrease a month earlier. Prices for diesel fuel, electric power, and utility natural gas also rose, after declining in the previous month. Price declines slowed for both liquefied petroleum gas and residual gas.

Prices for intermediate foods and feeds rose 1.1 percent, after posting a 0.6-percent decline in December. The index for pork turned up 18.3 percent, following a 4.5-percent decrease in the previous month. Prices for crude vegetable oils and for beef and veal also increased, after falling a month ago. The indexes for fluid milk products and confectionery materials rose more than in the prior month. By contrast, prices for refined sugar turned down 1.0 percent, after a 0.1-percent rise in December. The indexes for natural, processed, and imitation cheese and for condensed and evaporated milk products rose less than in the previous month.

The index for nondurable manufacturing materials moved down 0.1 percent in January, after posting a 0.4-percent decline in December. Price declines for industrial chemicals, synthetic fibers, gray fabrics, plastic resins and materials, and paper slightly outweighed price increases for medicinal and botanical chemicals, woodpulp, and paperboard.

The index for durable manufacturing materials decreased 0.6 percent in January, after registering a 0.5-percent decrease in December. In January, price declines for steel mill products, flat glass, aluminum mill shapes, copper, and hardwood lumber more than offset price advances for silver, cement, plywood, and platinum.

In January, prices for materials and components for construction increased 0.1 percent, the same as in December. Price increases for softwood lumber, gypsum products, wiring devices, cement, plastic construction products, metal valves, and plumbing fixtures slightly outweighed price declines for fabricated structural metal products, nonferrous wire and cable, steel wire, and air conditioning and refrigeration equipment.

Crude Goods

The Producer Price Index for Crude Materials for Further Processing turned up 2.6 percent in January, seasonally adjusted, following a 4.0- percent drop in December. Prices for crude foodstuffs and feedstuffs, crude energy materials, and basic industrial materials also rose, after falling in the prior month. (See table B.)

Prices for crude foodstuffs and feedstuffs advanced 5.1 percent, following a 4.1-percent decline in December. The index for slaughter hogs gained 188.6 percent, after a 46.5-percent decrease in the previous month. Prices for slaughter cattle, unprocessed finfish, and wheat also increased, after falling a month ago. The index for fresh fruits and melons rose more than in the prior month. By contrast, prices for fluid milk turned down 0.8 percent, following a 2.8-percent gain in December. The indexes for fresh and dry vegetables and corn also fell after rising last month. Prices for slaughter broilers and fryers and for slaughter turkeys fell more than in December.

The index for crude energy rose 0.6 percent, following a 5.2-percent decline in the previous month. Prices for crude petroleum rose 16.5 percent, after a 20.2-percent drop a month ago. The index for coal also turned up, following a decline in the prior month. On the other hand, prices for natural gas turned down 7.0 percent, after a 0.5-percent rise in December.

Prices for crude nonfood materials less energy increased 0.2 percent, after dropping 1.6 percent last month. Iron and steel scrap prices advanced 6.2 percent, following a 0.7-percent gain in the previous month. The indexes for wastepaper and copper ores rose, after falling in the prior month. Prices for raw cotton, copper base scrap, pulpwood, and aluminum base scrap fell less than a month ago. By contrast, the index for cattle hides increased 0.3 percent, following a 9.7-percent gain in December. Prices for gold ores; construction sand, gravel, and crushed stone; and softwood logs, bolts, and timber turned down, after rising 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 0.5 percent in January, following a 3.8-percent decline in December. (Net output price indexes are not seasonally adjusted.) In January, prices for the oil and gas extraction industry group moved down 1.0 percent, after showing a 5.0-percent decrease in the prior month. The index for the coal mining industry group turned up 1.4 percent, following a 1.0-percent decrease in December. The metal mining industry group index declined 1.3 percent, after falling 3.2 percent in the month before. The index for the non-metallic mineral mining industry group turned up 0.2 percent, following a 0.2-percent decrease in the previous month. In January, the Producer Price Index for the Net Output of Total Mining Industries stood at 65.0 (December 1984=100), 14.9 percent below its year- ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries increased 0.4 percent in January, after decreasing 0.3 percent in December. The index for the petroleum refining and related products industry group rose 5.4 percent, following a 11.3-percent decline in December. Prices for the food and kindred products industry group; printing and publishing industry group; and the chemical and allied products industry group also advanced, following declines last month. The index for the transportation industry group fell less than a month ago. By contrast, the index for tobacco manufactures rose 0.1 percent, following a 27.4-percent jump in the prior month. In January , the Producer Price Index for the Net Output of Total Manufacturing Industries stood at 126.3 (December 1984=100), 0.1 percent below its year-ago level.

Other. Among other industries in January, prices for operators and lessors of nonresidential buildings rose 1.1 percent, after falling 2.1 percent in the previous month. Indexes for passenger car rental, without drivers; travel agencies; and hotels and motels also turned up, after declining a month earlier. Prices for offices and clinics of doctors of medicine and scheduled air transportation rose more than in December. The indexes for property and casualty insurance, the United States Postal Service, and general medical and surgical hospitals advanced, after showing no change a month ago. Prices for telephone communications, except radiotelephone, fell less than last month.

By contrast, the index for radio broadcasting decreased 2.3 percent in January, after rising 0.3 percent in December. Prices for airports, flying fields, and airport services; freight transportation arrangement; and deep sea domestic transportation of freight turned down, following an increase in the previous month. The indexes for home health care services and crude petroleum pipelines declined, after showing no change in the prior month.

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 new and resampled industries is introduced. One (1) mining, thirty-three (33) manufacturing, and seven (7) service industries were resampled this month. In addition, a service industry, life insurance carriers, 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 more accurately reflect changes in the structure, membership, technology, or product mix of an industry. 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

1474 Potash, soda, and borate minerals 2024 Ice cream and frozen desserts 2034 Dried and dehydrated fruits, vegetables and soup mixes 2038 Frozen specialties, not elsewhere classified 2047 Dog and cat food 2052 Cookies and crackers 2074 Cottonseed oil mill products 2076 Vegetable oil mills, not elsewhere classified 2084 Wines, brandy, and brandy spirits 2273 Carpet and rugs 2331 Women's, misses', and juniors' blouses and shirts 2335 Women's, misses', and juniors' dresses 2337 Women's, misses', and juniors' suits and coats 2339 Women's, misses', and juniors' outerwear, not elsewhere classified 2491 Wood preserving 2821 Plastic materials and resins 3161 Luggage 3171 Women's and children's handbags and purses 3172 Personal leather goods, except women's handbags and purses 3357 Nonferrous wiredrawing and insulating 3399 Primary metal products, not elsewhere classified 3491 Industrial valves 3492 Fluid power valves and hose fittings 3494 Valves and pipe fittings, not elsewhere classified 3563 Air and gas compressors 3751 Motorcycles, bicycles, and parts 3821 Laboratory apparatus and furniture 3827 Optical instruments and lenses 3829 Measuring and controlling devices, not elsewhere classified 3911 Jewelry, precious metal 3915 Jewelers' materials and lapidary work 3949 Sporting and athletic goods, not elsewhere classified 3961 Costume jewelry and costume novelties 3999 Manufacturing industries, not elsewhere classified

4222 Refrigerated warehousing and storage 4432 Freight transportation on the Great Lakes/St. Lawrence Seaway 4491 Marine cargo handling 4513 Air courier services 6311 Life insurance carriers* 7513 Truck rental and leasing 7514 Passenger car rental 8071 Medical laboratories

For information on specific additions, deletions, and recodes of indexes that are effective this month, see tables 12 through 18 in the January 1999 issue of the Producer Price Index Detailed Report.

*See "New Producer Price Index for the Life Insurance Industry - SIC 6311" in the January issue of the Producer Price Index Detailed Report.

Recalculation of Seasonal Adjustment Factors

Effective with this release, seasonal adjustment factors have been recalculated to reflect 1998 price movement patterns for stage-of- processing (SOP) and commodity groupings. This routine annual recalculation may affect seasonally adjusted indexes and percent changes from January 1994 to the present. Revised seasonally adjusted data for this period, as well as seasonal factors for commodity indexes to be used through December 1999, are available on request from BLS. The table below shows 1998 monthly seasonally adjusted percent changes for the three major SOP categories calculated with the old seasonal factors, compared with the percent changes for recalculated indexes. The latter incorporate new seasonal factors that reflect 1998 price movement patterns.