August 2000 Producer Price Index

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The Producer Price Index for Finished Goods decreased 0.2 percent in August, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This index showed no change in July and increased 0.6 percent in June. The index for finished goods other than foods and energy edged up 0.1 percent in August, the same rate as in July. Prices received by manufacturers of intermediate goods fell 0.2 percent, following a 0.2-percent advance a month earlier. The crude goods index decreased 1.5 percent, after falling 1.1 percent in July. (See table A.)

Finished goods

Change in finished Except goods foods from 12 Inter- and months mediate Crude Month Total Foods Energy energy ago goods goods (unadj.) 1999 Aug. 0.6 0.5 3.3 0.1 2.3 0.5 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

Among finished goods, prices for finished consumer foods declined 0.7 percent in August, and the finished energy goods index decreased 0.2 percent. Prices for finished consumer goods other than foods and energy edged up 0.1 percent, and the index for capital equipment showed no change in August.

Before seasonal adjustment, the Producer Price Index for Finished Goods fell 0.1 percent in August to stand at 138.1 (1982=100). From August 1999 to August 2000, prices for finished goods rose 3.3 percent. The main cause of this increase can be traced to a 15.3-percent advance in prices for finished energy goods. During the same period, prices for finished goods other than foods and energy rose 1.5 percent, and prices for finished consumer foods increased 0.7 percent. Prices received by manufacturers of intermediate goods rose 4.3 percent for the 12 months ended in August, and the index for crude goods advanced 15.6 percent during the same period.

Finished goods

The index for finished consumer foods dropped 0.7 percent in August, after showing no change in July. Prices for dairy products turned down 3.5 percent, following a 0.7-percent increase in the prior month. The indexes for pork, bakery products, and roasted coffee also fell, after rising in July. Prices for fresh fruits and melons and for beef and veal fell at a faster pace in August than in July. By contrast, the August index for eggs for fresh use turned up 19.4 percent, following a 17.4-percent decrease a month ago. Prices for fresh and dry vegetables and processed young chickens also rose, after falling in July.

Intermediate Crude goods goods

Change in intermediate Change in goods crude goods Excluding from Excluding from foods 12 months foods 12 months and ago Energy and ago Month Foods Energy energy (unadj.) Foods (unadj.) energy (unadj.)

The finished energy goods index fell 0.2 percent in August, after decreasing 0.7 percent in July. This slower rate of decline was primarily due to the gasoline index, which fell 2.8 percent in August following a 9.1- percent drop in the previous month. Prices for finished lubricants and home heating oil turned up, after decreasing in July. Conversely, the residential natural gas index turned down 0.3 percent, following a 6.2- percent advance in the prior month. Prices for liquefied petroleum gas also fell, after rising last month. The index for residential electric power rose less in August than in July.

The index for finished consumer goods other than foods and energy edged up 0.1 percent in August, the same rate as in July. Price increases for cigarettes, prescription drugs, mobile homes, and book publishing slightly outweighed price decreases for passenger cars, household appliances, alcoholic beverages, and sanitary paper products.

The capital equipment index showed no change in August, following a 0.1-percent increase in July. Rising prices for civilian aircraft, heavy motor trucks, pumps and compressors, truck trailers, and construction machinery and equipment offset falling prices for passenger cars, electronic computers, x-ray and electromedical equipment, light motor trucks, and office and store machines.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components declined 0.2 percent in August, after posting a 0.2-percent gain in the prior month. This downturn was led by prices for nondurable manufacturing materials, which also decreased in August following an increase in July. The index for intermediate foods and feeds fell more than in the previous month. Prices for durable manufacturing materials declined, after rising a month ago. The index for intermediate energy goods advanced less than in the prior month. By contrast, prices for materials and components for construction declined less than in July. Following a 0.2-percent gain in July, the index for intermediate materials other than foods and energy fell 0.1 percent in August, the first decline in this index since February 1999. (See table B.)

Prices for nondurable manufacturing materials fell 0.5 percent in August, after registering a 0.9-percent gain in July. The industrial chemicals index declined 1.6 percent, following a 2.5-percent increase in the previous month. Prices for gray fabrics showed no change, after rising a month ago. The index for nitrogenates increased at a slower pace than in July. Prices for plastic resins and materials fell more than a month ago. On the other hand, the index for medicinal and botanical chemicals increased 0.6 percent, following a 1.2-percent drop in July. Prices for synthetic fibers and leather also rose, after falling in the previous month. The synthetic rubber index registered a higher rate of increase in August than in July.

Prices for intermediate foods and feeds fell 2.5 percent in August, following a 0.7-percent decline in July. The index for prepared animal feeds decreased 4.1 percent, after posting a 1.7-percent drop a month ago. The indexes for crude vegetable oils and for beef and veal also fell more than a month earlier. Prices for pork; natural, processed, and imitation cheese; fluid milk products; and refined sugar turned down, following gains in the prior month. By contrast, flour prices increased 0.7 percent in August, after declining 1.5 percent in July. The index for dry, condensed, and evaporated milk products rose more than in the previous month. Butter prices decreased less than last month.

The index for durable manufacturing materials fell 0.2 percent in August, following a 0.1-percent gain in July. Prices for primary aluminum (except extrusion billet) declined 1.8 percent, after posting a 2.9-percent increase a month ago. The indexes for flat glass, cold rolled sheet and strip, cold finished bars, and semi-finished steel mill products also turned down, after rising in the prior month. Prices for hot rolled sheet and strip and for building paper and board decreased more than a month earlier. Conversely, the index for aluminum mill shapes advanced 0.7 percent in August, following a 0.3-percent increase in July. Prices for copper and brass mill shapes also rose more than in the previous month. The index for hot rolled bars, plates, and structural shapes fell less than last month.

Prices for intermediate energy goods increased 0.3 percent in August, after registering a 0.5-percent rise in July. The index for commercial natural gas fell 0.9 percent, following a 6.8-percent advance in the prior month. Prices for industrial electric power, industrial natural gas, diesel fuel, and jet fuels rose less than a month ago. The indexes for residual fuel, liquefied petroleum gas, and natural gas to electric utilities turned down, after increasing a month earlier. By contrast, price declines for gasoline slowed from 9.1 percent in July to 2.8 percent in August. The commercial electric power index rose slightly more in August than in the prior month.

The index for materials and components for construction decreased 0.1 percent in August, following a 0.3-percent drop in July. Softwood lumber prices declined 1.7 percent, after falling 3.3 percent in the prior month. The indexes for nonferrous wire and cable, fabricated structural metal products, fabricated ferrous wire products, plastic construction products, and switchgear advanced, following declines a month ago. Heating equipment prices showed no change in August, after falling a month earlier. On the other hand, the gypsum products index fell 4.7 percent in August, following a 2.6-percent drop in July. Millwork prices decreased, after showing no change a month ago. The index for wiring devices declined, after rising in the previous month, while plywood prices fell more than in July.

Crude goods

The Producer Price Index for Crude Materials for Further Processing declined 1.5 percent in August, after falling 1.1 percent in July. This faster rate of decline was caused by larger price decreases for crude foodstuffs and feedstuffs. By contrast, prices for basic industrial materials fell less than in the prior month. The index for crude energy materials rose more than a month earlier. (See table B.)

The index for crude foodstuffs and feedstuffs fell 4.5 percent in August, following a 2.7-percent decrease in July. Slaughter hog prices dropped 17.1 percent, after rising 4.8 percent a month ago. The index for fluid milk also turned down, after increasing in the prior month. Prices for wheat, fresh fruits and melons, slaughter broilers and fryers, and unprocessed shellfish fell more than a month earlier. Conversely, corn prices posted a 5.5-percent decline in August, after falling 14.2 percent in July. The index for soybeans also fell less than in the previous month. Prices for fresh and dry vegetables and slaughter turkeys turned up, after falling a month ago.

The index for basic industrial materials decreased 1.3 percent in August, after posting a 1.8-percent drop in July. The main cause of the August decline was a 15.7-percent decrease in wastepaper prices. The indexes for softwood logs and gold ores also fell in August. By contrast, the indexes for raw cotton, copper base scrap, copper ores, and for construction sand, gravel, and crushed stone increased in August.

The index for crude energy materials increased 0.6 percent in August, after registering a 0.4-percent advance in July. Crude petroleum prices turned up 2.2 percent, following a 7.2-percent drop in the previous month. By contrast, the natural gas index increased 0.6 percent, after rising 6.4 percent a month ago. Coal prices declined 3.5 percent, following a 0.6- percent increase in July.

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

Mining. The Producer Price Index for the Net Output of Total Domestic Mining Industries rose 0.5 percent in August, after registering a 0.9- percent gain in July. (Net output price indexes are not seasonally adjusted.) Leading the deceleration among mining industries, the index for the bituminous coal and lignite industry fell 2.3 percent, following a 0.5- percent rise a month earlier. Prices received by the crude petroleum, natural gas and natural gas liquids industry and the drilling oil and gas wells industry rose less than in the prior month. The indexes for the potash, soda, and borate minerals industry; oil and gas exploration service industry; and coal mining service industry turned down, after rising a month ago. By contrast, prices received by the copper ores industry advanced 3.7 percent in August, following a 1.0-percent decline in July. The index for the crushed and broken granite industry also turned up, after falling in the previous month. Prices received by the clay and related minerals, miscellaneous nonmetallic minerals, and dimension stone industries rose more than a month ago. In August, the Producer Price Index for the Net Output of Total Domestic Mining Industries stood at 115.4 (December 1984=100), 36.2 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Domestic Manufacturing Industries decreased 0.1 percent in August, after posting a 0.3-percent decrease in the prior month. Leading the acceleration, prices received by the petroleum refining and related products industry group turned up 0.2 percent, following a 4.6-percent decline a month ago. The indexes for the tobacco manufactures and the measuring and controlling instruments industry groups rose, after showing no change a month earlier. Prices received by miscellaneous manufacturing industries and primary metal industries turned up, after falling in the prior month. By contrast, the index for the food and kindred products industry group decreased 0.9 percent in August, compared to the 0.2-percent increase shown in July. Prices received by the chemicals and allied products industry group and the machinery (except electrical) industry group also turned down, after rising a month ago. The indexes for the electrical and electronic machinery industry group and the transportation industry group fell, following no change in July. In August, the Producer Price Index for the Net Output of Total Domestic Manufacturing Industries stood at 133.4 (December 1984=100), 3.4 percent above its year-ago level.

Services. Among service industries in August, price increases were registered by general medical and surgical hospitals, trucking (except local), deep sea foreign transportation of freight, skilled and intermediate care facilities, and hotels and motels. By contrast, the indexes for offices of physicians, telephone communications (except radiotelephone), life insurance carriers, and for cable and other pay television services declined this month.