December 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 0.3 percent in December, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This rise followed a 0.2-percent increase in November and a 0.1-percent decline in October. Prices received by producers of intermediate goods gained 0.2 percent, following a 0.3- percent advance in the prior month. The crude goods index decreased 3.9 percent, after posting a 4.0-percent increase in November. (See table A.)

Finish ed goods

Change in Except Finished Inter- goods foods From 12 mediate Crude and months Month Total Foods Energy energy ago goods goods (unadj.) 1998 Dec. 0.5 0.0 -1.8 1.0 0.0 -0.7 -3.6

In December, the index for finished energy goods increased 1.2 percent and was the largest contributor to this month's rise in finished goods prices. Prices for finished goods other than foods and energy edged up 0.1 percent, after showing no change a month earlier; the indexes for finished consumer foods, consumer goods other than foods and energy, and for capital equipment each advanced in December.

Before seasonal adjustment, the Producer Price Index for Finished Goods showed no change for the second consecutive month, to remain at 135.0 (1982=100). From December 1998 to December 1999, finished goods prices advanced 3.0 percent, after showing no change during 1998. Leading this acceleration, the index for finished energy goods surged 18.4 percent in 1999, following an 11.7-percent drop in the previous calendar year. Prices for finished consumer foods increased 0.9 percent during 1999, after edging up 0.1 percent during the 12 months ended December 1998. By contrast, the index for finished goods other than foods and energy rose 0.9 percent in 1999, following a 2.5-percent gain in 1998. At the earlier stages of processing, the intermediate goods index advanced 3.9 percent from December 1998 to December 1999, after registering a 3.3-percent decline during 1998. Prices for crude materials for further processing increased 15.7 percent in 1999, following a 16.7-percent decrease in the prior calendar year. (See table B.)

Finished goods

The index for finished energy goods rose 1.2 percent in December, after posting a 1.4-percent gain in November. An 8.5-percent increase in December gasoline prices was the main factor behind the advance in finished energy goods prices. For the 12 months ended December 1999, gasoline prices increased 76.4 percent, the largest 12-month rate of increase since a 78.0-percent gain in May 1980. Other noteworthy December price increases were registered for home heating oil and finished lubricants. On the other hand, prices for residential electric power, residential natural gas, and liquefied petroleum gas fell in December.

The finished consumer foods index advanced 0.4 percent, after registering a 0.1-percent gain in November. Prices for fresh and dry vegetables rose 32.3 percent, following a 0.6-percent increase a month earlier. The indexes for beef and veal and for fresh fruits and melons advanced, after falling in the prior month. Pork prices gained more than a month ago, while the finfish and shellfish index decreased less than in the previous month. By contrast, prices for dairy products declined 6.3 percent in December, following a 1.3-percent decrease a month ago. The index for eggs for fresh use fell, after rising last month. Prices for processed young chickens and soft drinks increased less than a month earlier.

Finished goods Intermediate Crude goods goods

Prices for finished consumer goods other than foods and energy advanced 0.1 percent, the same as in November. Rising prices for passenger cars, women's apparel, book publishing, and floor coverings slightly outweighed falling prices for alcoholic beverages, sanitary papers and health products, and prescription drugs. From December 1998 to December 1999, the index for finished consumer goods other than foods and energy increased 1.2 percent, after posting a 4.2-percent gain 1998. This deceleration is due primarily to a slowdown in the rate of increase in cigarette and prescription-drug prices.

The capital equipment index gained 0.1 percent in December, following a 0.1-percent drop in November. The index for light motor trucks showed no change, after posting a 1.1-percent decline a month earlier. Prices for communication and related equipment also showed no change, after falling in the previous month. The x-ray and electromedical equipment index increased, after decreasing a month ago. Prices for civilian aircraft and passenger cars rose more than in the prior month. Conversely, the index for transformers and power regulators fell 0.1 percent, following a 2.4- percent advance in November. Prices for agricultural machinery and equipment and for truck trailers also fell, after rising a month ago. For the 12 months ended December 1999, capital equipment prices increased 0.3 percent, after posting no change during the previous calendar year.

Interm Crude ediate goods goods Change in intermedi ate Change in Exclud goods Exclud- crude goods ing from ing from foods 12 months Energy foods 12 months and ago and ago Month Foods Energy energy (unadj.) Foods (unadj.) energy (unadj.)

1998 Dec. -0.6 -3.5 -0.2 -3.3 -4.3 -4.0 -1.7 -16.7

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 0.2 percent in December, seasonally adjusted, after registering a 0.3-percent rise in November. Rising prices for materials for nondurable manufacturing, durable manufacturing materials, materials and components for construction, and intermediate energy goods more than offset falling prices for intermediate food and feeds. Excluding foods and energy, the index for intermediate materials rose 0.2 percent, following a 0.1-percent increase in November. (See table C.)

The index for nondurable manufacturing materials advanced 0.5 percent in December, after rising 0.2 percent in November. The index for plastic resins and materials gained 1.3 percent, after edging up 0.1 percent in the previous month. Prices for basic organic chemicals also rose more than a month ago. The paperboard index fell less than last month, and prices for nitrogenates and finished fabrics turned up, after falling in the prior month. By contrast, the index for paper edged up 0.1 percent in December, after advancing 1.0 percent in November. Prices for gray fabrics and for alkalies and chlorine turned down, after rising a month ago. The index for phosphates fell more than last month. From December 1998 to December 1999, prices for nondurable manufacturing materials rose 4.1 percent, following a 5.3-percent decline in 1998.

Prices for materials for durable manufacturing rose 0.5 percent in December, following a 0.2-percent increase in November. Prices for aluminum mill shapes advanced 1.5 percent in December, after increasing 0.1 percent last month. The index for original equipment automobile stampings rose 0.5 percent, following no change from the previous month. Prices for silver, semi-finished steel mill products, and for building paper and board turned up, after falling a month ago. Conversely, the index for hot rolled bars, plates, and structural shapes increased 0.1 percent in December, following a 0.7-percent advance in November. Prices for flat glass, copper cathode and refined copper, and prepared paint turned down, after rising in the prior month. Plywood prices rose less than the prior month. The index for materials for durable manufacturing posted a 2.6-percent gain during 1999, following a 5.5-percent drop in the previous year.

The index for materials and components for construction increased 0.3 percent in December, after edging up 0.1 percent in November. The index for fabricated structural metal products rose 0.6 percent, after a 0.1- percent gain last month. Softwood lumber prices also advanced at a greater rate than in the prior month. The indexes for nonferrous wire and cable, switchgear and switchboard equipment, and air conditioning and refrigeration equipment turned up, after falling in the previous month. By contrast, prices for plastic construction products increased less than in November. Millwork prices fell, after showing no change last month. The indexes for plywood, wiring devices, and gypsum products rose less than a month ago. For the 12 months ended in December 1999, prices for materials and components for construction rose 2.1 percent, following a 0.1-percent increase in the prior year.

Prices for intermediate energy goods rose 1.4 percent in December, following a 1.8-percent advance in November. The commercial electric power index turned down 3.2 percent, following a 0.7-percent gain a month earlier. Prices for industrial electric power, commercial natural gas, industrial natural gas, and liquefied petroleum gas also turned down, after increasing in the previous month. By contrast, gasoline prices advanced 8.5 percent in December, following a 0.1-percent rise in November. Prices for jet fuels and residual fuels increased more than a month ago. The intermediate energy goods index advanced 21.1 percent during 1999, after registering a 12.1-percent decline during all of 1998.

The index for intermediate foods and feeds fell 1.5 percent in December, following a 0.5-percent decline in November. The index for fluid milk products fell 12.5 percent in December, following a 0.3-percent gain a month ago. Flour prices also turned down, after rising in the previous month. The indexes crude vegetable oils and bulk liquid milk products fell more than a month earlier. By contrast, prices for beef and veal turned up 2.3 percent in December, after dropping 5.7 percent in November. The pork index rose more than in the prior month. Prices for confectionery materials turned up, after falling last month. During 1999, prices for intermediate foods and feeds fell 3.9 percent, after declining 7.3 percent in 1998.

Crude Goods

The Producer Price Index for Crude Materials for Further Processing decreased 3.9 percent in December, seasonally adjusted, following a 4.0- percent increase in November. Prices turned down for both crude energy materials and for crude foodstuffs and feedstuffs, after rising in the prior month. By contrast, prices for basic industrial materials increased more rapidly than they had a month ago. (See table C.)

The index for crude energy materials dropped 8.7 percent, after increasing 8.8 percent in November. Prices for natural gas fell 22.4 percent, following an 11.7 percent advance in November. Coal prices fell more than in the prior month. Price increases for crude petroleum slowed to 8.6 percent in December from 9.2 percent in November. The crude energy materials index rose 38.6 percent during 1999, following a 23.8-percent decrease in 1998.

Prices for crude foodstuffs and feedstuffs fell 1.6 percent, following a 1.0-percent rise in November. The index for corn fell 0.9 percent, after an 11.5-percent rise in the prior month. Wheat and alfalfa hay prices also turned down, following increases a month ago. Price increases slowed from November to December for slaughter broilers and fryers. By contrast, the index for slaughter cattle advanced 0.7 percent, after a 1.6-percent decrease in the previous month. Prices for fresh fruits and melons also rose, following a decline in November. The index for fresh and dry vegetables increased more than a month earlier, and prices for raw cane sugar fell less than a month ago. During 1999, prices for crude foodstuffs and feedstuffs dipped 0.2 percent, after falling 11.0 percent in 1998.

Prices for crude nonfood materials less energy increased 1.8 percent in December, after rising 0.3 percent a month ago. Prices for cattle hides increased 14.2 percent, after falling 10.1 percent in November. Prices for leaf tobacco and copper ores also turned up, following a decrease a month earlier. The gold ores index fell less than in November. By contrast, the index for pulpwood logs declined 6.1 percent, after edging down 0.2 percent in the prior month. The indexes raw cotton and phosphates also fell more than in the prior month. Prices for wastepaper, iron and steel scrap, and for softwood logs, bolts, and timber rose more slowly in December than in the prior month. The basic industrial materials index rose 13.6 percent in 1999, following a 16.0-percent decline in 1998.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries fell 6.8 percent in December, following a 6.2 percent rise in November. (Net output price indexes are not seasonally adjusted.) In December, within the oil and gas extraction industry group, prices for crude petroleum, natural gas, and natural gas liquids moved down 9.2 percent, after showing a 9.6-percent increase in the prior month. The index for the coal mining industry group fell 1.6 percent, after decreasing 0.5 percent in November. By contrast, price declines for the metal mining group slowed to 1.2 percent in December from 5.5 percent a month earlier. In December, the Producer Price Index for the Net Output of Total Mining Industries stood at 87.5 (December 1984=100). From December 1998 through December 1999, this index increased 31.0 percent, following a 19.7-percent decrease in the prior year.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries increased 0.2 percent in December, the same amount that it rose in November. Increases were registered for the petroleum refining and related products, chemicals and allied products, and lumber and wood products industry groups. By contrast, prices declined for the food and kindred products, transportation equipment, and nonmetallic mineral products industry groups. In December, the Producer price Index for the Net Output of Total Manufacturing Industries stood at 130.6 (December 1984=100). From December 1998 through December 1999, this index rose 3.7 percent, following a 0.9-percent decline in 1998.

Other. Among other services in December, prices for the prepackaged software industry turned up 12.1 percent, following an 18.0-percent decline in the previous month. Increases were also registered for the operators and lessors of nonresidential buildings, offices and clinics of doctors of medicine, trucking (except local), and scheduled air transportation industries. Decreases occurred for the passenger car rental, hotels and motels, life insurance carriers, and telephone communications (except radiotelephone) industries.

Recalculated Seasonal Adjustment Factors and Relative Importances to be Available on February 15, 2000

Each year with the release of PPI data for January, seasonal adjustment factors are recalculated to reflect price movements from the just-completed calendar year. This routine annual calculation may result in revisions to seasonally adjusted indexes for the previous 5 years. As in previous years, the following information will be available on February 15, 2000 (2 work days prior to the release of PPI data for January 2000 on February 17):

- Seasonal factors for commodity indexes for the year 2000,

- Recalculated seasonal factors for the last 5 years (1995-99) for the commodity indexes,

- Recalculated seasonal factors for the last 5 years (1995-99) for the stage-of-processing indexes.

In addition to recalculated seasonal factors, relative importances, as of December 1999, will also be available on February 15, 2000, at ftp://ftp.bls.gov which is the BLS ftp site. Choose the "pub" directory, the "special.requests" directory, and the "ppi" directory.

To request any of this information, call the Division of Industrial Prices and Price Indexes, Section of Index Analysis and Public Information at (202) 691-7705.