January 2000 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 showed no change in January, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This followed a 0.1-percent increase in December and a 0.2-percent advance in November. The index for finished goods other than foods and energy fell 0.2 percent in January, after edging up 0.1 percent in the previous month. At the earlier stages of process, prices received by producers of intermediate goods rose 0.4 percent, following a 0.2-percent increase in the prior month, and the crude goods index advanced 2.7 percent, after a 3.9-percent decline a month earlier. (See table A.)

2000 Jan. 0 .1 .7 -.2 2.5 .4 2.7

The January decline in prices of finished goods other than foods and energy was primarily due to a 4.9-percent decrease in cigarette prices. Excluding cigarettes, the index for finished goods other than foods and energy would have risen 0.1 percent in January. (Similarly, excluding cigarettes, the overall finished goods index would have risen 0.2 percent.) The indexes for finished energy goods advanced 0.7 percent, after registering a 0.4-percent rise in the prior month.

Before seasonal adjustment, the Producer Price Index for Finished Goods decreased 0.2 percent to stand at 134.7 (1982=100). From January 1999 to January 2000, the finished goods price index increased 2.5 percent. Over the same period, prices for finished energy goods advanced 17.5 percent, finished consumer foods declined 0.4 percent, and finished goods other than foods and energy rose 0.8 percent. Prices received by domestic producers of intermediate goods moved up 4.1 percent for the 12 months ended in January 2000, and the index for crude goods registered an 18.0- percent gain in the same period.

Finished goods

Prices for finished consumer goods other than foods and energy fell 0.4 percent in January, following a 0.1-percent gain in December. The index for cigarettes decreased 4.9 percent, after showing no change last month. Prices for women's apparel, light motor trucks, and periodical circulation also declined, after increasing in the prior month. Passenger car prices rose less than a month ago. By contrast, the index for alcoholic beverages registered a 0.3-percent advance, following a 1.1- percent drop in December. Prices for prescription drugs, sanitary papers and health products, and mobile homes also turned up, after decreasing a month ago.

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.)

2000 Jan. 0 .8 .3 4.1 .7 4.4 3.2 18.0

Prices for finished energy goods advanced 0.7 percent in January, after posting a 0.4-percent rise in December. Increases in the indexes for gasoline and home heating oil outweighed price decreases for liquefied petroleum gas, finished lubricants, residential electric power, and residential natural gas.

The capital equipment index gained 0.1 percent in January, the same rate of increase as in December. Price increases for civilian aircraft, truck trailers, commercial furniture, and for pumps and compressors slightly outweighed price decreases for light motor trucks, communication and related equipment, electronic computers, and for construction machinery and equipment.

The index for finished consumer foods edged up 0.1 in January, after showing no change in December. Rising prices for pork, dairy products, eggs for fresh use, beef and veal, and roasted coffee more than offset falling prices for fresh and dry vegetables, soft drinks, fresh fruits and melons, and processed fruits and vegetables.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components rose 0.4 percent in January, seasonally adjusted, after registering a 0.2-percent increase in December. The January increase was supported by advancing prices for intermediate energy goods, materials for durable manufacturing, nondurable manufacturing materials, and for materials and components for construction. The intermediate foods and feeds index showed no change in January. Excluding foods and energy, the index for intermediate materials increased 0.3 percent, following a 0.2- percent rise in the prior month. (See table B.)

The index for intermediate energy goods rose 0.8 percent in January, after posting a 1.5-percent rise in December. Residual fuel prices increased 0.3 percent, following a 14.5-percent gain in the previous month. The indexes for jet fuels, diesel fuel, and gasoline also rose less than in the prior month. Liquefied petroleum gas prices fell more than a month ago. On the other hand, the commercial electric power index fell 0.6 percent, after a 1.6-percent decrease a month ago. The commercial natural gas index rose, after falling a month earlier.

The index for durable manufacturing materials advanced 0.8 percent in January, after registering a 0.5-percent increase in December. Copper cathode and refined copper prices turned up 5.6 percent, following a 1.0- percent drop in the prior month. The indexes for flat glass and prepared paint also rose, after falling in the previous month. Prices for hot rolled bars, plates, and structural shapes; building paper and board; and copper and brass mill shapes increased more than a month ago. By contrast, the cold rolled sheet and strip index rose 0.6 percent, following a 1.3- percent gain a month earlier. Prices for aluminum mill shapes and hardwood lumber increased less than in the prior month. The hot rolled sheet and strip index fell more than in the previous month.

The index for nondurable manufacturing materials gained 0.5 percent in January, after posting a similar increase in December. Advancing prices for nitrogenates, basic organic chemicals, plastic resins and materials, fertilizer materials, woodpulp, paper, and basic inorganic chemicals more than offset falling prices for finished fabrics, inedible fats and oils, medicinal and botanical chemicals, synthetic fibers, and paint materials.

In January, prices for materials and components for construction increased 0.4 percent, after rising 0.3 percent in December. Rising prices for plastic construction products, fabricated structural metal products, softwood lumber, nonferrous wire and cable, millwork, and plywood outweighed price declines for air conditioning and refrigeration equipment, asphalt felts and coatings, heating equipment, switchgear, and cement.

Prices for intermediate foods and feeds showed no change, after posting a 1.9-percent decline in December. The fluid milk products index turned up 0.8 percent, following a 8.9-percent drop in the prior month. Flour prices also increased, after falling in the previous month. The indexes for pork and for beef and veal rose more than a month ago. Natural, processed, and imitation cheese prices fell less than a month earlier. By contrast, the index for prepared animal feeds decreased 0.3 percent, after showing no change in the prior month. Crude vegetable oil prices declined more than in the prior month. The index for potato chips showed no change, following a 1.8-percent increase in the previous month.

Crude goods

The Producer Price Index for Crude Materials for Further Processing increased 2.7 percent in January, following a 3.9-percent decrease in December. Prices for crude energy materials and crude foodstuffs and feedstuffs rose, after falling in the previous month. The index for basic industrial materials advanced more than a month ago. (See table B.)

Prices for crude energy materials gained 4.4 percent in January, after posting an 8.7-percent drop in December. Leading the upturn, the natural gas index increased 9.0 percent, following a 22.4-percent decrease a month earlier. Coal prices also rose, after falling in the prior month. By contrast, crude petroleum prices were unchanged in January, following an 8.6-percent gain last month.

The index for crude foodstuffs and feedstuffs increased 0.7 percent in January, after registering a 2.1-percent decrease in December. Fluid milk prices advanced 1.7 percent, following an 11.3-percent decline a month ago. The indexes for corn, wheat, soybeans, and alfalfa hay also rose, after falling in the previous month. Slaughter hog prices increased more than a month earlier. Conversely, the index for slaughter broilers and fryers declined 4.9 percent in January, following a 2.8-percent advance in December. Prices for fresh vegetables (except potatoes) and slaughter cattle also fell, after rising in the prior month.

The index for crude nonfoods materials less energy increased 3.2 percent in January, following a 2.0-percent rise in December. Wastepaper prices advanced 18.4 percent, after posting a 2.4-percent gain a month ago. The indexes for raw cotton, aluminum base scrap, copper ores, and copper base scrap also increased more than in the previous month. Prices for gold ores and for pulpwood advanced, following declines a month earlier. By contrast, the iron and steel scrap index rose 1.3 percent, after a 6.6- percent increase in the prior month. Prices for cattle hides and leaf tobacco fell, following December advances.

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 2.9 percent in January, after registering a 6.8- percent decline in December. (Net output price indexes are not seasonally adjusted.) Leading the upturn, prices received by the crude petroleum, natural gas, and natural gas liquids industry increased 4.0 percent, following a 9.2-percent decrease a month earlier. The indexes for the bituminous coal and lignite, gold ores, and for the crushed and broken granite industries also rose, after falling in the prior month. Prices received by the copper ores and the crushed and broken limestone industries advanced more than last month. By contrast, the index for the drilling oil and gas wells industry turned down 4.3 percent, following a 0.7-percent gain in December. Prices received by the metal mining services industry fell, after showing no change in the previous month. The indexes for the oil and gas exploration industry and the potash, soda, and borate minerals industry decreased more than a month earlier. In January, the Producer Price Index for the Net Output of Total Mining Industries stood at 90.0 (December 1984 = 100), 40.4 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of the Total Domestic Manufacturing Industries gained 0.2 percent in January, the same rate of increase observed in December. Prices received by the petroleum refining and related products industry group; the printing, publishing, and allied products industry group; the chemicals and allied products industry group; the lumber and wood products (except furniture) industry group; and the transportation equipment industry group rose in January. These advances more than offset declining prices received by the tobacco manufactures industry group; the electrical and electronic machinery and equipment industry group; the food and kindred products industry group; and the apparel and other finished fabric products industry group. In January, the Producer Price Index for the Net Output of Total Manufacturing Industries stood at 130.8 (December 1984 = 100), 3.6 percent above its year- ago level.

Other. Among other industries in January, the index for the passenger car rental industry advanced 3.7 percent, after posting a 2.1-percent decline in December. Prices received by offices and clinics of doctors of medicine increased 1.2 percent, following a 0.3-percent increase a month earlier. The indexes for travel agencies, the hotel and motel industry, real estate agents and managers, and the telephone communications (except radiotelephone) industry rose, after falling in the previous month. Prices received by the scheduled air transportation industry and by skilled and intermediate care facilities gained more than last month. The indexes for general medical and surgical hospitals and for the property and casualty insurance industry rose, after showing no change in December. By contrast, prices received by the prepackaged software industry increased less than in the prior month. The index for the radio broadcasting industry, operators and lessors of nonresidential buildings, the deep sea foreign transportation of freight industry, and advertising agencies declined, following advances a month earlier.

Recalculation of Seasonal Adjustment Factors

Effective with this release, seasonal adjustment factors have been recalculated to reflect 1999 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 1995 to the present. Revised seasonally adjusted data for this period, as well as seasonal factors for commodity indexes to be used through December 2000, are available on request from BLS. The table below shows 1999 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 1999 price movement patterns.

Resampling of Industries

Effective with this release, another set of resampled industries is introduced. Three (3) mining, twenty-eight (28) manufacturing, and three (3) service industries were resampled this month. 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

1382 Oil and gas field exploration services 1389 Oil and gas field services, n.e.c. 1499 Miscellaneous nonmetallic minerals 2371 Fur goods 2386 Leather and sheep lined clothing 2611 Pulp mills 2621 Paper mills 2631 Paperboard mills 3069 Fabricated rubber products, n.e.c. 3081 Unsupported plastics film and sheet 3083 Laminated plastics plate, sheet, and profile shapes 3084 Plastics pipe 3086 Plastic foam products 3089 Plastics products, n.e.c. 3262 Vitreous china food utensils 3268 Pottery products, n.e.c., including earthenware (semi- vitreous) table and kitchen 3272 Concrete products, except block and brick 3275 Gypsum products 3334 Primary aluminum 3452 Bolts, nuts, screws, rivets, and washers 3531 Construction machinery 3589 Service industry machinery, n.e.c. 3612 Power, distribution, and specialty transformers 3621 Motors and generators 3643 Current-carrying wiring devices 3647 Vehicular lighting equipment 3711 Motor vehicles and passenger car bodies 3714 Motor vehicle parts and accessories 3728 Aircraft parts and equipment, n.e.c. 3861 Photographic equipment and supplies 3996 Hard surface floor coverings 4512 Air transportation, scheduled 4581 Airports, flying fields, and airport terminal services 8011 Offices of physicians

For information on specific additions, deletions, and recodes of indexes that are effective this month, see the January 2000 issue of the Producer Price Index Detailed Report or contact the Section of Index Analysis and Public Information at (202) 691-7705.