July 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 0.2 percent in July, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This advance followed a 0.1-percent decline in June and a 0.2-percent rise in May. The index for finished goods other than foods and energy showed no change in July, after falling 0.2 percent a month ago. Prices received by manufacturers of intermediate goods registered a 0.6-percent advance, following a 0.4-percent gain a month earlier. The crude goods index decreased 0.2 percent, after increasing 1.4 percent in the prior month. (See table A.)

Change in Except finished Inter- goods foods from 12 mediate Crude and months Month Total Foods Energy energy ago goods goods (unadj.) 1998 July 0.2 0.5 -0.1 0.2 -0.2 0.0 0.1 Aug. -.3 -.3 -1.9 0 -.8 -.3 -4.2 Sept. .2 .2 -.4 .3 -.9 -.3 -1.8 Oct. .3 .4 .8 .1 -.7 -.2 2.5 Nov. -.2 -.4 -1.3 .1 -.6 -.2 -.1 Dec. .5 0 -1.8 1.0 0 -.7 -3.6

Among finished goods, prices for finished energy goods and finished consumer goods other than foods and energy rose, after falling in the previous month. The capital equipment index declined less than a month ago. By contrast, prices for finished consumer foods turned down, after rising in June.

Before seasonal adjustment, the Producer Price index for Finished Goods advanced 0.2 percent in July to stand at 132.9 (1982=100). From July 1998 through July 1999, the Finished Goods Price Index increased 1.5 percent. During the same period, prices for finished goods other than foods and energy rose 1.3 percent, while the finished energy goods index advanced 4.9 percent and finished consumer foods prices declined 0.3 percent. Prices received by manufacturers of intermediate goods increased 0.1 percent for the 12 months ended in July, and the index for crude goods fell 0.7 percent during the same period.

Finished goods

The finished energy goods index advanced 3.4 percent in July, after posting a 0.3-percent decline in June. Over half of the acceleration in prices for finished energy goods can be traced to an upturn in the gasoline index, which increased 12.7 percent, following a 1.9-percent decrease last month. The indexes for residential electric power and home heating oil also turned up, after falling in the prior month. Finished lubricant prices rose more than in June. By contrast, the residential natural gas index increased 0.4 percent, following a 0.9-percent rise in June.

Prices for finished consumer goods other than foods and energy increased 0.1 percent in July, after registering a 0.1-percent decrease a month ago. In July, advancing indexes for prescription drugs, sanitary papers and health products, soaps and synthetic detergents, alcoholic beverages, and mobile homes slightly outweighed declining prices for light motor trucks, passenger cars, tires, men's and boys' apparel, and women's apparel.

The capital equipment index declined 0.1 percent in July, after posting a 0.3-percent decrease a month earlier. Prices for communication and related equipment fell 0.1 percent, following a 0.9-percent decline in June. The indexes for light motor trucks and electronic computers also fell less than a month ago. Prices for x-ray and electromedical equipment turned up, after falling in the prior month. By contrast, the indexes for railroad equipment and printing trades machinery fell, following increases last month. Prices for industrial materials handling equipment showed no change, after rising in June.

Finished consumer foods prices fell 0.9 percent in July, after registering a 0.4-percent gain in June. The beef and veal index declined 3.4 percent, following an 8.2-percent advance in the previous month. Prices for fresh and dry vegetables and processed turkeys also fell, after rising a month ago. The index for processed young chickens turned down, after showing no change in June. Prices for dairy products and for finfish and shellfish rose less than last month. By contrast, the index for eggs for fresh use advanced 7.1 percent in July, following a 0.1-percent decline in the prior month. Prices for fresh fruits and melons and for pork fell less than in June.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 0.6 percent in July, following a 0.4-percent rise in June. On a seasonally adjusted annual rate basis, prices for intermediate goods rose 3.1 percent from December 1998 to July 1999. In July, the index for intermediate energy goods turned up, after falling in the prior month. The durable manufacturing materials index rose more than a month ago. By contrast, prices for intermediate foods and feeds declined, after increasing in June. The indexes for materials for nondurable manufacturing and for materials and components for construction rose less than in the previous month. Excluding foods and energy, the index for intermediate materials increased 0.4 percent, following a 0.5-percent advance a month ago. (See Table B.)

The index for intermediate energy materials rose 2.9 percent, after dropping 0.2 percent in June. Gasoline prices turned up 12.7 percent, following a 1.9-percent decrease in the prior month. The indexes for industrial electric power and jet fuels also turned up, after falling in the previous month. Prices for commercial electric power fell less than a month ago. The July index for diesel fuel rose faster than in June. By contrast, liquefied petroleum gas prices turned down 1.1 percent in July, after posting an 11.7-percent gain in the prior month. The index for natural gas to electric utilities also fell, after increasing in the previous month. Residual fuel prices rose less than a month ago.

The index for durable manufacturing materials rose 0.8 percent, following a 0.7-percent increase in June. Price increases for plywood, flat glass, copper cathode and refined copper, copper and brass mill shapes, and for building paper and board outweighed price declines for steel mill products, hardwood lumber, and gold.

The index for intermediate foods and feeds turned down 1.4 percent, after rising 0.7 percent a month ago. Beef and veal prices dropped 3.4 percent, following an 8.2-percent advance in the prior month. The indexes for fluid milk products, prepared animal feeds, flour, confectionery materials, and butter also turned down, after rising in June. Prices for crude vegetable oils fell more than in the previous month. By contrast, the index for natural, processed, and imitation cheese increased 3.0 percent, following a 0.3-percent rise in the prior month. Refined sugar prices also turned up, after falling in the previous month. The pork index fell less than in June. Prices for condensed and evaporated milk products showed no change, following a decrease a month ago.

The index for materials for nondurable manufacturing increased 0.4 percent in July, following a 0.9 percent gain a month ago. Prices for basic organic chemicals rose 0.3 percent, after rising 1.8 percent in June. The indexes for medicinal and botanical chemicals and for woodpulp also rose less than the prior month. Prices for synthetic fibers and finished fabrics turned down, after rising in June. By contrast, prices for paperboard increased 3.5 percent in July, following a 0.7-percent rise in the previous month. The index for paper turned up, after decreasing in June, and prices for gray fabrics fell less than a month ago.

The index for materials and components for construction increased 0.7 percent in July, following a 0.8 percent rise in June. Rising prices for softwood lumber, plywood, plastic construction products, millwork, and nonferrous wire and cable outweighed falling prices for air conditioning and refrigeration equipment, steel wire, fabricated ferrous wire products, and gypsum products.

Crude Goods

The Producer Price Index for Crude Materials for Further Processing decreased 0.2 percent in July, seasonally adjusted, following a 1.4-percent rise in June. Prices for crude foodstuffs and feedstuffs also turned down, after advancing in the prior month. On the other hand, the indexes for basic industrial materials and crude energy materials rose more than in the previous month. (See table B.)

The index for crude foodstuffs and feedstuffs declined 4.8 percent, following a 0.4-percent increase in June. Slaughter cattle prices fell 2.4 percent, after rising 3.8 percent in the prior month. The indexes for fresh and dry vegetables (except potatoes), wheat, and slaughter turkeys also turned down, after decreasing a month earlier. Prices for corn, soybeans, slaughter broilers and fryers, and slaughter hogs fell more in July than in June. The indexes for fluid milk, Irish potatoes for processing, and unprocessed finfish rose less than a month ago. On the other hand, the Louisiana rough rice index turned up, after falling a month earlier. Prices for fresh fruits and melons and for unprocessed shellfish fell less than in June.

Prices for basic industrial materials rose 2.3 percent in July, following a 0.5-percent rise in the previous month. This acceleration in price increases was led by the indexes for copper ores and copper base scrap, both of which turned up after falling in June. The index for pulpwood logs also rose, after decreasing a month ago. Prices for aluminum base scrap and wastepaper increased more than in the prior month. By contrast, the indexes for iron and steel scrap and for phosphates turned down, after increasing in the previous month. Raw cotton prices fell more in July than in June. Prices for softwood logs and for construction sand and gravel rose less than a month ago.

Prices for crude energy materials rose 3.7 percent in July, following a 3.1-percent jump in June. The crude petroleum index increased 10.0 percent, after a 3.4-percent advance in the prior month. By contrast, price increases for natural gas slowed to 3.2 percent in July from 5.3 percent in June. Prices for coal fell more than in June.

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

Mining. The Producer Price Index for the net output of total domestic mining industries rose 2.9 percent in July, after registering a 2.6-percent advance in June. (Net output price indexes are not seasonally adjusted.) The index for the copper ores industry increased 11.7 percent, following an 8.8-percent decrease a month ago. Prices received by the metal mining services industry and the drilling oil and gas wells industry also rose, after falling last month. The gold ores industry index fell less than in the prior month. By contrast, the index for the bituminous coal and lignite industry declined 3.0 percent, following a 1.4-percent drop a month earlier. Prices received by the crude petroleum, natural gas, and natural gas liquids industry rose less than in the previous month. In July, the Producer Price Index for the net output of total domestic mining industries stood at 78.4 (December 1984=100), 8.4 percent above its year-ago level.

Manufacturing. The Producer Price Index for the net output of total domestic manufacturing industries increased 0.3 percent in July, after posting a 0.1-percent rise in June. The index for the petroleum refining and related products industry group advanced 8.3 percent, following a 1.7- percent decline a month ago. Prices received by the printing, publishing, and allied products industry group rose, after showing no change last month. Prices received by the paper and allied products, fabricated metal products (except machinery and transportation equipment), and rubber and plastic products industry groups increased more than in the prior month. The index for the apparel industry group fell less than in June. Conversely, prices received by the food and kindred products industry group declined 0.5 percent, following a 0.7-percent rise a month earlier. The index for the chemicals and allied products industry group rose less than in the previous month. Prices received by the machinery (except electrical) industry group fell, after showing no change a month ago. In July, the Producer Price Index for the net output of total domestic manufacturing industries stood at 128.2 (December 1984=100), 1.6 percent above its year-ago level.

Other. Prices for real estate agents and managers, passenger car rental, telephone communications (except radiotelephone), offices and clinics of doctors of medicine, and for property and casualty insurance rose in July. On the other hand, the industry indexes for operators and lessors of nonresidential buildings, deep sea foreign transportation of freight, life insurance carriers, and scheduled air transportation declined in July.

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.

New Industry Samples in the Producer Price Index

Effective with this release, the Producer Price Index (PPI) includes data for 24 resampled industries. The Bureau of Labor Statistics periodically updates the sample of producers providing data for the PPI to reflect current conditions more accurately when the structure, membership, technology, or product mix of an industry shifts significantly. The Bureau published the first results of this systematic process in July 1986. Subsequent efforts have been completed at 6-month intervals.

As part of an ongoing effort to expand coverage to sectors of the economy other than mining and manufacturing, the wireless telecommunications industry is being introduced into the PPI for the first time. The index for this industry appears in table 5 of the PPI Detailed Report. For further discussion of the new index, see "New Producer Price Index for the wireless telecommunications industry" in the July 1999 issue of the PPI Detailed Report or call the Section of Index Analysis and Public Information at (202) 606-7705.

Standard Industrial Classification (SIC) Code Industry

2051 Bread and other bakery products, except cookies and crackers 2121 Cigars 2131 Chewing and smoking tobacco and snuff 2141 Tobacco stemming and redrying 2671 Paper coated and laminated, packaging 2672 Paper coated and laminated, not elsewhere classified 2711 Newspaper publishing 2721 Periodical publishing 2844 Perfumes, cosmetics, and other toilet preparations 2895 Carbon black 3082 Unsupported plastics profile shapes, rods and tubes 3433 Nonelectric heating equipment 3499 Fabricated metal products, not elsewhere classified 3577 Computer peripheral equipment, not elsewhere classified 3634 Electric housewares and fans 3648 Lighting equipment, not elsewhere classified 3674 Semiconductors and related devices 3812 Search, detection, navigation, and guidance systems and aeronautical and nautical navigation systems 3824 Fluid meters and counting devices 3826 Laboratory analytical instruments 3931 Musical instruments 3944 Games, toys, and children's vehicles, except dolls and bicycles 3965 Fasteners, buttons, needles and pins 3993 Signs and advertising displays 4812 Wireless telecommunications

For information on specific additions, deletions, and recodes of indexes that are effective this month, see tables 12 through 18 in the July 1999 issue of the PPI Detailed Report. 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 March 1999 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 4 months after original publication. animal fibers, oilseeds, and leaf tobacco." 8/ Percent of total crude materials.

See footnotes at end of table.

1/ The indexes for March 1999 have been recalculated to incorporate 2/ Not seasonally adjusted. late reports and corrections by respondents. All indexes are 3/ Not available. subject to revision 4 months after original publication.

1/ Data for March 1999 have been revised to reflect the availability of late reports and corrections by respondents. All data are subject to revision 4 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 March 1999 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication. 3/ Not available.

1/ All seasonally adjusted indexes are subject to change up to 5 years after original publication due to the recalculation of seasonal factors each January. The indexes for March 1999 have been recalculated to incorporate late reports and corrections by respondents. 2/ Includes crude petroleum. 3/ Excludes crude petroleum.