June 2000 Producer Price Index

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The Producer Price Index for Finished Goods advanced 0.6 percent in June, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This index showed no change in May and declined 0.3 percent in April. The index for finished goods other than foods and energy fell 0.1 percent in June, after registering a 0.2-percent gain in the prior month. Prices received by producers of intermediate goods increased 0.9 percent, following a 0.1-percent decrease a month earlier. The crude goods index rose 5.8 percent, after posting a 3.2- percent advance in the previous month. (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.) 1999 June 0.1 0.6 -0.1 0.0 1.5 0.3 0.2 July .2 -.4 2.7 -.1 1.5 .7 .2 Aug. .6 .5 3.3 .1 2.3 .5 5.1 Sept. .8 .7 2.1 .6 3.1 .5 4.6 Oct. 0 -.3 -.4 .2 2.8 .2 -2.4 Nov. .1 -.2 1.1 -.1 3.1 .2 5.2 Dec. .1 0 .7 .1 2.9 .3 -4.9

Prices for finished energy goods jumped 5.1 percent, following a 0.5- percent decline in May, and caused June's acceleration in the finished goods index. By contrast, the index for finished consumer goods other than foods and energy edged down 0.1 percent, after increasing 0.2 percent a month ago. Capital equipment prices showed no change in June, following a 0.1-percent gain in the prior month. June's 0.3-percent decline in the index for finished consumer foods was slightly larger than the 0.2-percent rate of decrease posted in May.

During the first six months of 2000, the finished goods price index advanced at a 4.8-percent seasonally adjusted annual rate (SAAR), after rising at a 3.8-percent rate during the latter half of 1999. Leading this acceleration, prices for finished energy goods rose at a 26.6-percent annual rate in the first half of this year, following a 20.7-percent annual rate of increase during the final six months of last year. The index for finished consumer foods advanced at a 2.7-percent SAAR from December 1999 to June 2000, after rising at a 0.6-percent rate in the previous six-month period. Conversely, prices for finished goods other than foods and energy rose at a 1.0-percent annual rate during the first half of 2000, following a 1.7-percent rate of increase for the last six months of 1999. The intermediate goods price index advanced at a 6.1-percent SAAR for the first half of this year, after rising at a 4.8-percent rate during the final six months of last year. The crude goods price index rose at an annual rate of 35.3 percent from December 1999 to June 2000, following a 15.6-percent rate of increase in the second half of 1999. (See summary below.)

Grouping Percentage Seasonally adjusted annual change 12 rate for: months ended in December 6 3 3 3 months months months months ended ended ended ended in in in in June Dec. March June 1997 1998 1999 2000 1999 2000 2000 Finished goods -1.2 0.0 2.9 4.8 0.9 8.6 1.2 Finished consumer foods -.8 .1 .8 2.7 -2.0 3.3 2.1 Finished energy goods -6.4 -11.7 18.1 26.6 5.9 59.0 .8 Finished goods less foods 0 2.5 .9 1.0 .8 1.1 .8 and energy Finished consumer goods, excluding .3 4.2 1.2 .8 1.1 .8 .8 foods and energy Capital equipment -.6 0 .3 1.2 1.2 .9 1.5

Before seasonal adjustment, the Producer Price Index for Finished Goods advanced 0.7 percent in June to stand at 138.4 (1982=100). From June 1999 to June 2000, prices for finished goods gained 4.3 percent. During the same period, the index for finished energy goods increased 23.4 percent, finished goods other than foods and energy rose 1.4 percent, and finished consumer foods advanced 1.6 percent. Prices received by producers of intermediate goods gained 5.4 percent for the 12 months ended in June, and the index for crude goods increased 25.2 percent during the same period.

Finished goods

Finished energy goods prices rose 5.1 percent in June, after posting a 0.5-percent decrease in May. The gasoline index advanced 11.8 percent, following a 1.3-percent increase a month earlier. The indexes for residential natural gas and home heating oil also rose more than a month ago. Prices for liquefied petroleum gas turned up, after falling in the prior month. By contrast, prices for residential electric power declined 0.7 percent in June, following a 0.5-percent decrease in the previous month. The finished lubricants index fell, after rising a month earlier.

Intermediate Crude goods goods Change in intermediate Change in Exclud- goods crude goods ing from Excluding from foods 12 months foods 12 months and ago Energy and ago Month Foods Energy energy (unadj.) Foods (unadj.) energy (unadj.) 1999 June 0.5 0.4 0.3 -0.4 0.0 0.0 0.5 -0.2 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

Prices for finished consumer goods other than foods and energy edged down 0.1 percent in June, following a 0.2-percent advance in May. Passenger car prices declined 0.5 percent, following a 0.9-percent gain in the prior month. The indexes for sanitary papers and health products, book publishing, men's and boys' apparel, and women's apparel also turned down, after advancing a month ago. Cigarette prices fell 1.8 percent, after showing no change in the previous month. The index for cosmetics and toilet preparations rose less, while prices for alcoholic beverages decreased more than in May. On the other hand, the index for prescription drugs edged up 0.1 percent in June, following a 0.3-percent drop a month earlier. Prices for girls', children's, and infants' apparel and for tires increased, after declining in the prior month. During the first six months of 2000, the index for finished consumer goods other than foods and energy rose at a 0.8-percent SAAR, after increasing at a 2.4-percent rate during the latter half of 1999.

The capital equipment index showed no change in June, following a 0.1- percent gain in May. Falling prices for passenger cars; electronic computers; office and store machines and equipment; tools, dies, jigs, fixtures, and industrial molds; and agricultural machinery and equipment offset advancing prices for light motor trucks, x-ray and electromedical equipment, communication and related equipment, and pumps and compressors. From December 1999 to June 2000, the capital equipment index rose at a seasonally adjusted annual rate of 1.2 percent, after posting a 0.7-percent rate of increase for the second half of 1999.

The index for finished consumer foods declined 0.3 percent in June, after registering a 0.2-percent decrease a month earlier. This month's decline was led by a 14.7-percent drop in prices for fresh and dry vegetables and an 11.8-percent fall in prices for fresh fruits and melons. The indexes for finfish and shellfish, roasted coffee, and shortening and cooking oils also decreased in June. By contrast, prices for eggs for fresh use, beef and veal, pork, and soft drinks rose in June.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components turned up 0.9 percent in June, after edging down 0.1 percent in May. Most of this acceleration can be attributed to prices for intermediate energy goods, which turned up following two consecutive monthly declines. The index for materials and components for construction fell less than a month ago. By contrast, the indexes for nondurable manufacturing materials and intermediate foods and feeds rose less than in the prior month. Prices for durable manufacturing materials decreased at the same rate as in May. Excluding foods and energy, the index for intermediate materials advanced 0.2 percent, following a 0.1-percent gain a month earlier, the sixteenth consecutive increase for this index. (See table B.)

Prices for intermediate energy goods advanced 4.7 percent in June, after registering a 1.4-percent decline in May. The gasoline index jumped 11.8 percent, following a 1.3-percent gain a month ago. Prices for liquefied petroleum gas, jet fuels, commercial electric power, industrial electric power, and diesel fuel turned up, after falling in the previous month. The index for intermediate energy goods advanced at a 23.1-percent seasonally adjusted annual rate during the first half of 2000, after rising at a 21.0-percent rate during the second half of 1999.

The index for materials and components for construction decreased 0.1 percent in June, following a 0.3-percent decline in May. Softwood lumber prices fell 0.8 percent, after dropping 5.0 percent in the prior month. The plywood index also fell less than a month earlier. Prices for steel wire and for plumbing fixtures and brass fittings turned up, after declining a month ago. The index for plastic construction products rose, after showing no change in May. By contrast, the index for fabricated structural metal products decreased 0.5 percent in June, following a 0.1- percent decline in May. Prices for nonferrous wire and cable and for millwork turned down, after rising in the previous month. The index for materials and components for construction increased at a 1.1-percent seasonally adjusted annual rate during the first six months of 2000, after rising at a 0.8-percent rate during the last six months of 1999.

Prices for materials for nondurable manufacturing increased 0.6 percent in June, after posting a 0.7-percent rise in May. Price increases for basic organic chemicals, paperboard, plastic resins and materials, woodpulp, and paper more than offset declining prices for basic inorganic chemicals, gray fabrics, phosphates, and processed yarns and threads. From December 1999 through June 2000, the nondurable manufacturing materials index increased at an 8.9-percent seasonally adjusted annual rate, following a 7.4-percent rate of increase during the latter half of 1999.

The intermediate foods and feeds index increased 0.4 percent in June, after registering a 0.7-percent gain in May. The index for prepared animal feeds rose 0.7 percent, following 2.2-percent increase a month earlier. Prices for fluid milk products, beef and veal, and for natural, processed, and imitation cheese also rose less than in the prior month. Crude vegetable oil prices fell more than a month ago. By contrast, the pork index advanced 0.7 percent in June, following a 5.4-percent drop in May. Prices for flour also turned up, after falling in the previous month. The index for confectionery materials showed no change in June, following a decrease last month. Prices for intermediate foods and feeds advanced at a 6.9-percent seasonally adjusted annual rate during the first six months of 2000, after posting a 0.9-percent rate of decline during the last six months of 1999.

The materials for durable manufacturing index dropped 0.2 percent in June, the same rate as in May. Price declines for steel mill products, building paper and board, aluminum mill shapes, copper and brass mill shapes, and plywood outweighed rising prices for gold, flat glass, hardwood lumber, prepared paint, and platinum. From December 1999 through June 2000, the index for materials for durable manufacturing rose at a 3.2- percent seasonally adjusted annual rate, following a 3.9-percent rate of increase during the latter half of 1999.

Crude goods

The Producer Price Index for Crude Materials for Further Processing rose 5.8 percent in June, seasonally adjusted, after increasing 3.2 percent in May. This acceleration was caused by a faster rate of increase for crude energy material prices. On the other hand, faster rates of price decline were reported for crude foodstuffs and feedstuffs and basic industrial materials. (See table B.)

Prices for crude energy materials advanced 16.2 percent in June, after posting a 9.9-percent increase in May. The index for natural gas gained 23.9 percent, following a 3.1-percent rise in the prior month. June's increase for natural gas is the largest one-month advance since a 39.9- percent rise in December 1996. On the other hand, crude petroleum prices rose 13.8 percent, after a 21.6-percent advance a month ago. The coal index fell, after rising last month. The index for crude energy materials increased at a 95.5-percent seasonally adjusted annual rate from December 1999 to June 2000, after increasing at a 30.0-percent rate in the previous six-month period.

The index for crude foodstuffs and feedstuffs fell 2.6 percent in June, following a 1.8-percent decline in May. Corn prices turned down 13.2 percent, following a 4.9-percent rise. The indexes for fresh vegetables (except potatoes), soybeans, alfalfa hay, and fresh fruits and melons also fell, after rising in the prior month. Slaughter cattle prices fell more than a month ago. By contrast, the slaughter hogs index turned up 2.8 percent, following a 15.5-percent drop in the previous month. Fluid milk prices also rose, after falling a month ago. The index for slaughter broilers and fryers fell less than in May. During the first half of 2000, the crude foodstuffs and feedstuffs index rose at a seasonally adjusted annual rate of 3.9 percent, after showing no change in the last half of 1999.

Basic industrial material prices declined 1.3 percent in June, following a 0.3-percent decrease in May. The June decrease for this index was the fourth consecutive monthly decline. Wastepaper prices fell 1.4 percent, after a 7.3-percent gain in the prior month. The indexes for raw cotton, cattle hides, and for construction sand, gravel, and crushed stone also turned down, after rising last month. Conversely, prices for copper ores turned up 3.3 percent, following a 7.3-percent decline in May. The indexes for gold ores and copper base scrap also rose, after falling a month ago. Prices for aluminum base scrap showed no change, following a decrease in the previous month. The iron and steel scrap index fell less than in the prior month. The index for basic industrial materials turned down at a 0.8-percent seasonally adjusted annual rate from December 1999 to June 2000, after increasing at a 24.4-percent rate in the previous six- month period.

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 13.8 percent in June, after registering a 5.4- percent increase in May. (Net output price indexes are not seasonally adjusted.) Leading the upturn in June, prices received by the crude petroleum, natural gas, and natural gas liquids industry advanced 19.0 percent, following a 7.1-percent rise in the prior month. The index for the gold ores industry and for the copper ores industry rose, after falling in the previous month. Prices received by the drilling oil and gas wells industry rose more than a month ago. By contrast, the index for the bituminous coal and lignite industry turned down 1.2 percent, following a 1.9-percent increase in May. Prices received by the oil and gas exploration services industry; the potash, soda, and borate minerals industry; and for the construction sand and gravel industry also fell, after rising in the prior month. During the first half of 2000, the index for the net output of total domestic mining industries rose at an annual rate of 72.3 percent, after rising at a 29.1 percent rate for the latter half of 1999. In June, this index stood at 113.8 (December 1984=100), 49.1 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Domestic Manufacturing Industries increased 0.4 percent in June, after posting a 0.5-percent rise in May. In June, rising prices were observed for the petroleum refining and related products industry group; the printing, publishing, and allied products industry group; the rubber and miscellaneous plastic products industry group; and the measuring and controlling instruments industry group. These advances more than offset declining prices received by the tobacco manufactures industry group; the transportation equipment industry group; the lumber and wood products (except furniture) industry group; and the primary metal products industry group. During the first half of 2000, the index for the net output of total manufacturing industries rose at an annual rate of 5.4 percent, following a 4.3-percent annual rate of increase for the second half of 1999. In June, this index stood at 134.0 (December 1984=100), 0.4 percent above its year-ago level.

Services. Among service industries in June, price increases were observed for real estate agents and managers, the telephone communications (except radiotelephone) industry, travel agencies, and the deep sea foreign transportation of freight industry. Price decreases were observed for the scheduled air transportation industry, operators and lessors of nonresidential buildings, hotels and motels, and the freight transportation arrangement industry.