March 1999 Producer Price Index

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The Producer Price Index for Finished Goods increased 0.2 percent in March, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This rise follows a 0.4-percent decline in February and a 0.5-percent increase in January. Prices received by producers of intermediate goods rose 0.3 percent, following a 0.5- percent drop in the prior month. The crude goods index advanced 1.0 percent, after a 3.4-percent decline in February. (See table A.)

1999 Jan. 0.5 1.6 1.8 -0.1 0.9 0.1 2.6 Feb. -0.4 -1.4 -1.0 0 0.5 -0.5 -3.4 Mar. 0.2 0.4 1.2 0 0.8 0.3 1.0 r=revised. Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for November 1998 have been revised to reflect the availability of late reports and corrections by respondents.

Among finished goods, the indexes for finished consumer foods, finished energy goods, and finished consumer goods other than foods and energy turned up, after falling in February. Capital equipment prices showed no change in March, following a small increase a month ago. The index for finished goods other than foods and energy was unchanged for the second consecutive month.

During the first quarter of 1999, the Finished Goods Price Index moved upward at a seasonally adjusted annual rate of 1.5 percent, following a 1.5- percent rate of increase during the fourth quarter of 1998. The index for finished energy goods rose at an 8.6-percent annual rate from December to March, after falling at a 10.4-percent annual rate over the last three months of 1998. Finished consumer food prices rose at an annual rate of 2.7 percent from December 1998 to March 1999, following a 0.3-percent annual rate of decline during the fourth quarter of 1998. The index for finished consumer goods less foods and energy fell at a seasonally adjusted annual rate of 0.3 percent, after an 8.0-percent rate of increase during the fourth quarter of 1998. Capital equipment prices turned down at a 0.3- percent rate of decrease during the first three months of 1999, following a 0.3-percent rise in the final quarter of 1998. Prices for finished goods other than foods and energy fell at a 0.3-percent seasonally adjusted annual rate, after rising at a 4.8-percent rate during the prior quarter.

Before seasonal adjustment, the Producer Price Index for Finished Goods rose 0.2 percent in March to stand at 131.2 (1982=100). From March 1998 to March 1999, the Finished Goods Price Index increased 0.8 percent. Over the past 12 months, prices for finished goods other than foods and energy rose 1.7 percent, prices for finished consumer foods advanced 0.9 percent, and the index for finished energy goods fell 3.8 percent. Prices received by domestic producers of intermediate goods fell 2.0 percent for the 12 months ended in March, and the index for crude goods dropped 10.0 percent during the same period.

1999 Jan. 1.1 1.8 -0.2 -2.4 5.1 0.6 0.2 -10.6 Feb. -2.0 -1.7 -0.2 -2.7 -2.8 -7.4 1.1 -12.2 Mar. -1.6 2.2 0.1 -2.0 -1.3 6.1 -0.8 -10.0 r=revised. Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for November 1998 have been revised to reflect the availability of late reports and corrections by respondents.

Finished goods

Prices for finished consumer foods turned up 0.4 percent in March, following a 1.4-percent decrease in the prior month. The fresh and dry vegetables index jumped 20.2 percent, after dropping 23.5 percent in the previous month. Prices for beef and veal, pork, and eggs for fresh use also turned up, after falling in February. The index for finfish and shellfish rose 9.4 percent (the largest monthly increase since an 11.9- percent advance in June 1986) compared with a 1.0-percent advance in the prior month. Prices for dairy products declined less than a month ago. By contrast, fresh fruit and melon prices fell 5.5 percent, following a 2.6- percent rise a month ago. The index for bakery products also turned down, after increasing a month earlier. Prices for processed fruits and vegetables rose less than a month ago.

The index for finished energy goods increased 1.2 percent in March, following a 1.0-percent decrease in February. Gasoline price increases accelerated to 3.6 percent in March from a 0.2-percent rate of increase in the prior month. March was the third consecutive month with a gasoline price increase. The indexes for residential electric power, home heating oil, and finished lubricants turned up, after falling in the previous month. By contrast, residential natural gas prices fell more than a month ago.

Prices for finished consumer goods other than foods and energy increased 0.1 percent in March, following a 0.1-percent decline a month ago. The sanitary papers and health products index advanced 1.3 percent, after decreasing 1.2 percent in the prior month. Prices for newspaper circulation and alcoholic beverages also turned up, after falling last month. The index for cosmetics and other toilet preparations rose, after showing no change in the previous month. By contrast, light motor truck prices fell 0.2 percent, following a 0.4-percent rise in February. The indexes for household appliances and women's apparel also turned down, after rising a month ago. Prescription drug prices rose less than a month earlier.

Prices for capital equipment showed no change, after increasing 0.1 percent in February. Over the past 12 months, the capital equipment index edged down 0.1 percent. In March, rising prices for civilian aircraft, communication and related equipment, construction machinery and equipment, and heavy motor trucks offset falling prices for light motor trucks, electronic computers, and transformers and power regulators.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 0.3 percent, seasonally adjusted, after registering a 0.5-percent decline in February. During the first quarter of 1999, this index fell at a 0.3-percent seasonally adjusted annual rate, after declining at a 3.5-percent rate during the prior quarter. In March, prices for intermediate energy goods and nondurable manufacturing materials also turned up, after falling in the previous month. The indexes for durable manufacturing materials and intermediate foods and feeds fell less than a month ago. The construction materials and components index rose more than in the prior month. Excluding foods and energy, the index for intermediate materials edged up 0.1 percent, following 10 consecutive monthly declines. (See table B.)

The intermediate energy goods index increased 2.2 percent, after posting a 1.7-percent drop in February. This index increased at a seasonally adjusted annual rate of 9.7 percent during the first quarter of 1999, following a 12.9-percent rate of decline for the previous three months. In March, residual fuel prices jumped 23.8 percent, after falling 19.9 percent in the previous month. The indexes for diesel fuel, jet fuels, and commercial electric power also advanced, following declines in the prior month. Gasoline prices rose faster than in the previous month. On the other hand, the index for natural gas to electric utilities turned down 6.9 percent in March, after advancing 0.8 percent last month. Commercial natural gas prices fell more than in the prior month.

Prices for nondurable manufacturing materials turned up 0.2 percent, following a 0.8-percent decline in February. This index declined at a seasonally adjusted annual rate of 2.6 percent during the first quarter of 1999, after falling at a 5.0-percent rate for the previous quarter. In March, the paperboard index increased 4.6 percent, after falling 0.8 percent in the previous month. Prices for plastic resins and materials, basic inorganic chemicals, processed yarns and threads, and gray fabrics turned up, following declines in the prior month. By contrast, the index for primary basic organic chemicals turned down 2.5 percent, after rising 1.6 percent in February. Prices for inedible fats and oils fell faster than a month ago. The synthetic fibers index turned down, following an increase in the previous month.

The durable manufacturing materials index decreased 0.2 percent in March, after posting a 0.5-percent decline in February. The March decline represents the seventh consecutive monthly decrease. From December 1998 to March 1999, this index declined at a seasonally adjusted annual rate of 4.7 percent, following a 7.3-percent rate of decline for the previous quarter. In March, falling prices for steel mill products, primary aluminum, copper cathode and refined copper, aluminum mill shapes, silver, and prepared paint more than offset rising prices for flat glass, plywood, building paper and board, and hardwood lumber.

Intermediate foods and feeds prices declined 1.6 percent, following a 2.0-percent decrease in February. During the first quarter of 1999, this index fell at a 9.8-percent seasonally adjusted annual rate, after falling at a 2.1-percent rate during the prior quarter. In March, declining prices for prepared animal feeds, crude vegetable oils, fluid milk products, and flour outweighed rising prices for beef and veal, refined sugar, pork, and confectionery materials.

Prices for materials and components for construction increased 0.3 percent in March. This rise was the fourth consecutive increase in the index for construction materials. From December 1998 to March 1999, construction material prices increased at a seasonally adjusted annual rate of 2.5 percent, after declining at a 1.4-percent rate during the final quarter of 1998. In March, price increases for softwood lumber, plywood, gypsum products, and millwork outweighed price declines for plastic construction products, nonferrous wire and cable, and wiring devices.

Crude goods

The Producer Price Index for Crude Materials for Further Processing advanced 1.0 percent in March, seasonally adjusted, after registering a 3.4- percent decline in February. During the first quarter of 1999, this index rose at a seasonally adjusted annual rate of 0.4 percent, following a 9.3- percent rate of decline in the final quarter of 1998. In March, crude energy material prices increased, after decreasing a month ago. The crude foodstuffs and feedstuffs index fell less than a month earlier. On the other hand, prices for basic industrial materials declined, after advancing in the previous month. (See table B.)

Crude energy material prices rose 6.1 percent, after posting a 7.4- percent decline in February. This index retreated at a seasonally adjusted annual rate of 4.4 percent from December 1998 to March 1999, following a 1.3-percent rate of decline from September 1998 to December 1998. In March, crude petroleum prices rose 27.1 percent, after dropping 13.8 percent in the prior month. March's increase for crude petroleum is the largest since a 29.7-percent rise in October 1990. The coal index increased, following a decline last month. Natural gas prices fell less than a month earlier.

Crude foodstuffs and feedstuffs prices decreased 1.3 percent in March, following a 2.8-percent decrease in February. During the most recent quarter, this index rose at a 3.3-percent seasonally adjusted annual rate, after falling at a 6.2-percent rate in the prior quarter. In March, slaughter cattle prices advanced 4.6 percent, following a 1.7-percent advance in the previous month. The indexes for fresh and dry vegetables and unprocessed finfish rose, after falling a month earlier. Prices for fluid milk decreased less than a month ago. By contrast, the index for slaughter broilers and fryers declined 5.4 percent, after registering a 2.4- percent advance in February. The fresh fruits and melons index also decreased, following an increase in the previous month. Prices for corn and slaughter hogs fell more than in the prior month.

The basic industrial materials index declined 0.8 percent in March, after posting a 1.1-percent rise in February. From December 1998 though March 1999, this index rose at a 1.6-percent seasonally adjusted annual rate, following a 24.6-percent rate of decline in the final quarter of 1998. In March, the iron and steel scrap index decreased 4.4 percent, after a 2.9-percent advance a month earlier. Prices for copper ores and aluminum base scrap also fell, after rising in the previous month. Indexes for wastepaper and gold ores rose less than last month. Cattle hide prices fell more than in the prior month. By contrast, the raw cotton index advanced 2.5 percent, following a 5.1-percent drop in February. Copper base scrap prices also rose, after falling a month earlier. The indexes for softwood logs and leaf tobacco increased more than in the prior month.

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

Mining. The Producer Price Index for the net output of total domestic mining industries advanced 4.0 percent in March, following a 4.5-percent decrease in February. (Net output price indexes are not seasonally adjusted.) During the first quarter of 1999, this index declined at an annual rate of 4.2 percent, after decreasing at a 2.4 percent rate in the final quarter of 1998. In March, prices for the crude petroleum and natural gas industry turned up 6.7 percent, after falling 7.0 percent in the prior month. The index for the bituminous coal and lignite mining industry also turned up, after decreasing in the previous month. Prices for the mining of non-metallic minerals, except fuels, industry group rose more rapidly in March than in February. Prices for the lead and zinc ores industry rose 8.6 percent, after falling 3.7 percent in February. By contrast, prices for the copper ores industry declined 5.0 percent, after rising 1.9 percent in the previous month. Price increases for the gold ores industry slowed. In March, the Producer Price Index for the net output of total domestic mining industries stood at 64.6 percent (December 1984=100), 10.5 percent below its year-ago level.

Manufacturing. The Producer Price Index for the net output of total domestic manufacturing industries increased 0.2 percent in March, after falling a similar amount in February. From December 1998 through March 1999, this index increased at an annual rate of 1.3 percent, after falling at a 0.3-percent rate in the previous calendar quarter. In March, prices for the petroleum refining industry group rose 5.7 percent, after falling 4.6 percent in the prior month. Prices for the paper and allied products, measuring and controlling instruments, and electrical machinery and equipment industry groups also turned up, after falling or showing no change in the previous month. Price decreases slowed for the food and kindred products industry group. By contrast, the index for the transportation equipment industry group fell 0.2 percent, after declining 0.1 percent in February. In March, the Producer Price Index for the net output of the total domestic manufacturing industries stood at 126.2 (December 1984=100), 0.2 percent higher than its year-ago level.

Other. Among other industries in March, increases were registered for operators and lessors of nonresidential buildings, hotels and motels, real estate agents and managers, property and casualty insurance, courier services (except by air), radio broadcasting, and travel agencies. By contrast, price declines occurred for scheduled air transportation, offices and clinics of doctors of medicine, line-haul railroad operations, trucking (except local), freight transportation arrangement, and prepackaged software.

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