May 2000 Producer Price Index

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The Producer Price Index for Finished Goods showed no change in May, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This followed a 0.3-percent decrease in April and a 1.0-percent gain in March. The index for finished goods other than foods and energy rose 0.2 percent, after increasing 0.1 percent for two consecutive months. Prices received by producers of intermediate goods fell 0.1 percent, the same rate as last month. The crude goods index turned up 3.2 percent, following a 2.5-percent decline a month earlier. (See table A.)

Finish ed goods

Among finished goods, the rate of decline in prices for finished energy goods slowed from 4.1 percent in April to 0.5 percent in May. The index for finished consumer goods excluding foods and energy rose 0.2 percent in May, after edging up 0.1 percent in the previous month. By contrast, the index for finished consumer foods turned down 0.2 percent, following a 1.0-percent gain a month ago. Capital equipment prices increased 0.1 percent, after rising 0.2 percent in April.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.4 percent to stand at 137.5 (1982=100). From May 1999 to May 2000, prices for finished goods gained 3.9 percent. Over the preceding 12 months, the index for finished energy goods increased 18.1 percent, finished goods other than foods and energy advanced 1.5 percent, and finished consumer foods rose 2.6 percent. Prices received by producers of intermediate goods increased 5.0 percent for the 12 months ended in May, and the index for crude goods advanced 18.5 percent during the same period.

Finished goods

Prices for finished energy goods fell 0.5 percent in May, after dropping 4.1-percent in April. The most significant contribution to May's decline was a 12.1-percent drop in liquefied petroleum gas prices. Additional downward pressure on energy prices can be traced to a 0.5- percent decrease in the heavily weighted residential electric power index. By contrast, price increases were registered for gasoline, residential natural gas, home heating oil, and finished lubricants.

Interm Crude ediate goods goods Change in intermedi ate Change in Exclud goods crude goods ing from Excluding from foods 12 months Energy foods 12 months and ago and ago Month Foods Energy energy (unadj.) Foods (unadj.) energy (unadj.) 1999 May 0.2 0.4 0.2 -1.1 1.8 13.2 1.7 -3.1 June .5 .4 .3 -.4 0 0 .5 -.2 July -1.0 2.8 .5 .3 -3.9 4.3 1.4 -.2 Aug. 1.3 2.5 .2 1.1 3.6 8.6 1.9 9.3 Sept. 1.0 1.9 .1 2.0 1.3 9.3 1.8 16.5 Oct. .8 -.8 .2 2.2 .1 -7.0 2.4 10.6 Nov. -.6 1.8 .1 2.8 1.0 11.5 1.0 16.7 Dec. -1.9 1.4 .1 3.7 -2.0 -11.1 2.5 15.3

In May, the index for finished consumer goods other than foods and energy moved up 0.2 percent, after rising 0.1 percent for two consecutive months. Price increases for passenger cars, sanitary papers and health products, book publishing, light motor trucks, cosmetics, and women's apparel outweighed declining prices for prescription drugs, alcoholic beverages, household appliances, passenger car radial tires, and for girls', children's, and infants' apparel.

Prices received by producers of finished consumer foods turned down 0.2 percent in May, after posting a 1.0-percent gain in April. The index for eggs for fresh use fell 17.9 percent, following a 41.6-percent advance in the prior month. Prices for finfish and shellfish, pork, processed young chickens, and processed turkeys also turned down, after rising a month earlier. The indexes for dairy products and for beef and veal rose less than in the previous month. By contrast, prices for fresh and dry vegetables advanced 12.1 percent in May, following a 2.5-percent gain in April. The indexes for roasted coffee and for fresh fruits and melons turned up, after falling in the prior month. Soft drink prices exhibited a greater rate of increase than in April.

The capital equipment index moved up 0.1 percent in May, after registering a 0.2-percent increase in April. Advancing prices for light motor trucks, communication equipment, commercial furniture, civilian aircraft, agricultural machinery, and for pumps and compressors slightly outweighed falling prices for electronic computers, x-ray and electromedical equipment, heavy motor trucks, and construction machinery.

Intermediate goods

A 1.4-percent decline in prices for intermediate energy goods was the main factor behind a 0.1-percent decrease in the Producer Price Index for Intermediate Materials, Supplies, and Components. Prices for materials and components for construction and durable manufacturing materials also fell in May. By contrast, both the index for nondurable manufacturing materials and the index for intermediate foods and feeds posted increases of 0.7 percent in May. Excluding foods and energy, the index for intermediate materials advanced 0.1 percent, following a 0.4-percent gain a month earlier. (See table B.)

The intermediate energy goods index decreased 1.4 percent in May, after registering a 2.9-percent decline in April. In May, falling prices for industrial electric power, commercial electric power, jet fuels, liquefied petroleum gas, and diesel fuel outweighed rising prices for gasoline, commercial natural gas, industrial natural gas, and residual fuel.

The index for materials and components for construction decreased 0.3 percent in May, after posting a 0.1-percent gain in April. Plywood prices declined 6.4 percent, following a 0.8-percent advance in the prior month. The index for softwood lumber fell more than a month earlier. Prices for steel wire, plumbing fixtures and brass fittings, and wiring devices turned down, after increasing a month ago. Conversely, the index for nonferrous wire and cable rose 0.6 percent in May, following a 0.7-percent drop in April. Prices for fabricated ferrous wire products also turned up, after decreasing in the previous month. The index for plastic construction products showed no change, following a decline in April. Cement prices fell less than a month earlier.

The index for durable manufacturing materials dropped 0.2 percent in May, after registering a 0.3-percent gain in April. Prices for hot rolled sheet and strip decreased 0.2 percent, following a 2.2-percent advance in the prior month. The indexes for plywood and for building paper and board also declined, after increasing a month ago. Prices for semi-finished steel mill products, cold finished bars, and flat glass rose less than a month earlier. The aluminum index fell more than in the previous month. By contrast, prices for cold rolled sheet and strip gained 1.9 percent, following a 1.1-percent advance in April. The indexes for cement and aluminum mill shapes decreased less than in the prior month.

A 4.2-percent rise in prices for plastic resins and materials was the key contributor to a 0.7-percent increase in prices for nondurable manufacturing materials. The indexes for primary basic organic chemicals, paper, nitrogenates, paint materials, synthetic fibers, and processed yarns and threads also advanced in May. On the other hand, prices for intermediate organic chemicals, basic inorganic chemicals, medicinal and botanical chemicals, paperboard, and woodpulp declined.

The intermediate foods and feeds index increased 0.7 percent in May, after registering a 0.8-percent gain in April. A 2.2-percent rise in the prepared animal feeds index led this month's advance in prices for intermediate foods and feeds. Other price increases were posted for beef and veal, fluid milk products, sausages and breakfast links, refined sugar, and for natural, processed, and imitation cheese. By contrast, prices for pork, liquid beverage bases, crude vegetable oils, confectionery materials, and flour declined in May.

Crude goods

The Producer Price Index for Crude Materials for Further Processing turned up 3.2 percent in May, seasonally adjusted, after declining 2.5 percent in April. Prices for crude energy materials also rose, after falling in the prior month. The index for basic industrial materials fell less than a month ago. By contrast, prices for crude foodstuffs and feedstuffs fell, after rising in the previous month. (See table B.)

Prices for crude energy materials turned up 9.9 percent in May, after posting a 6.9-percent drop in April. Leading the way, the index for crude petroleum gained 21.6 percent, following a 23.7-percent drop in the previous month. Coal prices rose, after falling in April. On the other hand, the natural gas index increased 3.1 percent, following an 8.7-percent advance last month.

Basic industrial material prices declined 0.3 percent in May, following a 1.2-percent decrease in April. Falling prices for iron and steel scrap, aluminum base scrap, copper ores, and for softwood logs, bolts, and timber outweighed rising prices for wastepaper, raw cotton, cattle hides, and for construction sand, gravel, and crushed stone.

Prices for crude foodstuffs and feedstuffs fell 1.8 percent in May, after rising 1.7 percent in April. The slaughter hogs index dropped 15.5 percent, following a 6.5-percent advance a month earlier. Prices for slaughter broilers and fryers, slaughter cattle, fluid milk, and unprocessed finfish also fell, after rising in April. By contrast, corn prices turned up 4.9 percent, following a 4.8-percent decline in the prior month. Prices for wheat and fresh fruits and melons also rose, after falling last month. The indexes for soybeans and for fresh and dry vegetables rose more than in the previous month.

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

Mining. The Producer Price Index for the Net Output of Total Domestic Mining Industries advanced 5.4 percent in May, after registering a 5.2- percent decline in April. (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 7.1 percent, following a 7.0-percent decrease a month earlier. The index for the bituminous coal and lignite industry and for the oil and the gas exploration services industry also rose, after falling in the prior month. Prices received by the gold ores industry declined less than a month ago. By contrast, the index for the copper ores industry dropped 7.0 percent in May, following a 3.1-percent gain in April. Iron ores industry prices also decreased, after rising in the previous month. The index for the oil and gas well drilling industry and the construction sand and gravel industry advanced less than a month earlier. In May, the Producer Price Index for the Net Output of Total Mining Industries stood at 100.0 (December 1984=100), 30.7 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Domestic Manufacturing Industries increased 0.5 percent in May, after posting a 0.2-percent drop in April. Leading this turnaround, prices received by the petroleum refining and related products industry group gained 3.3 percent, following a 3.9-percent decline in the prior month. The indexes for the chemicals and allied products; the food and kindred products; and the printing, publishing and allied products industry groups rose more than a month ago. Prices received by the machinery (except electrical) industry group and the stone, clay, and concrete products industry group advanced, after showing no change in the previous month. Conversely, the index for the lumber and wood products (except furniture) industry group decreased 1.7 percent in May, following a 0.1-percent decline in April. Prices received by the transportation equipment, the electrical and electronic machinery and equipment, and the rubber and plastic products industry groups declined, after increasing a month earlier. The index for the paper and allied products industry group rose less than in the prior month. In May, the Producer Price Index for the Net Output of Total Manufacturing Industries stood at 133.4 (December 1984=100), 4.5 percent above its year-ago level.

Services. Among service industries in May, prices received by the scheduled air transportation industry rose 6.7 percent. The industry indexes for radio broadcasting, property and casualty insurance, legal services, real estate agents and managers, local trucking without storage, trucking (except local), and deep sea foreign transportation of freight also advanced in May. By contrast, prices received by the home health care industry, operators and lessors of nonresidential buildings, the telephone communications (except radiotelephone) industry, hotels and motels, the passenger car rental, and the freight transportation arrangement industries fell in May.