October 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 rose 0.4 percent in October, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This index increased 0.9 percent in September and declined 0.2 percent in August. The index for finished goods other than foods and energy edged down 0.1 percent in October, after rising 0.3 percent in the prior month. Prices received by manufacturers of intermediate goods increased 0.2 percent, following a 0.7-percent advance a month earlier. The crude goods index rose 3.4 percent, after jumping 5.3 percent in September. (See table A.)

October's slower rate of increase in the index for finished goods was primarily due to smaller price increases for finished energy goods, which rose 1.4 percent in October after advancing 3.7 percent in September. Prices for finished consumer goods other than foods and energy and for capital equipment showed no change in October, following increases in the prior month. On the other hand, the index for finished consumer foods increased 0.8 percent, after moving up 0.4 percent in September.

For the first 10 months of 2000, the Producer Price Index for Finished Goods increased at a 4.1-percent seasonally adjusted annual rate (SAAR), after rising 2.9 percent for the 1999 calendar year. Prices for finished goods other than foods and energy rose at a 1.1-percent SAAR for the first 10 months of 2000, after posting a 0.9-percent gain in the previous calendar year. The index for intermediate goods increased at a 4.8-percent SAAR from December 1999 to October 2000, following a 3.7-percent rise during the 1999 calendar year. Prices for crude goods advanced at a 28.7- percent SAAR during the first 10 months of 2000, after a 15.3-percent increase during all of 1999.

Before seasonal adjustment, the Producer Price Index for Finished Goods rose 0.6 percent in October to stand at 140.0 (1982=100). From October 1999 to October 2000, prices for finished goods rose 3.6 percent. During the same period, the finished energy goods index advanced 19.4 percent, prices for finished goods other than foods and energy rose 1.0 percent, and prices for finished consumer foods increased 1.5 percent. Prices received by manufacturers of intermediate goods rose 4.6 percent for the 12 months ended in October, and the index for crude goods advanced 23.4 percent during the same period.

Finished goods

The finished energy goods index rose 1.4 percent in October, after advancing 3.7 percent last month. October price increases for liquefied petroleum gas, residential natural gas, and residential electric power outweighed falling prices for gasoline, home heating oil, and diesel fuel.

The index for finished consumer goods other than foods and energy showed no change in October, after rising 0.4 percent in September. Passenger car prices declined 1.8 percent in October, following a 1.4- percent increase a month ago. The indexes for light motor trucks and men's and boys' apparel also fell, after rising in September. In accordance with usual practice, most new model year passenger cars and light trucks were introduced into the PPI in October. (See "Report on Quality Changes for 2001 Model Vehicles.") Price increases for soaps and synthetic detergents, alcoholic beverages, and for toys, games, and children's vehicles slowed from September to October. The periodical circulation index decreased, after showing no change in September. By contrast, prices for prescription drugs turned up 1.6 percent, following a 0.1-percent decrease last month. The index for women's apparel also rose, after falling in September. Prices for tobacco products and household appliances increased, following no change in the prior month.

The capital equipment index showed no change in October, after edging up 0.2 percent a month ago. Rising prices for civilian aircraft, heavy motor trucks, transformers, x-ray and electromedical equipment, and for pumps and compressors offset falling prices for passenger cars, light motor trucks, commercial furniture, electronic computers, and communication and related equipment.

The index for finished consumer foods rose 0.8 percent in October, after rising 0.4 percent in the previous month. Prices for eggs for fresh use turned up 21.1 percent, following a 16.9-percent drop in September. The indexes for finfish and shellfish, soft drinks, pork, and for beef and veal also rose, after falling in the prior month. Dairy product prices fell less than a month ago. By contrast, the index for fresh fruits and melons rose only 3.5 percent, after surging 27.4 percent in September. Prices for processed young chickens, fresh and dry vegetables, and processed turkeys also rose less than in the prior month. The index for shortening and cooking oils turned down, following an increase last month.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 0.2 percent in October, after registering a 0.7-percent gain in September. A slowing rate of increase for intermediate energy goods accounted for most of this deceleration. Prices for materials for durable manufacturing and materials and components for construction turned down, following increases a month ago. The index for intermediate foods and feeds rose less than in the prior month. By contrast, prices for materials for nondurable manufacturing turned up, after declining a month earlier. Excluding foods and energy, the intermediate materials index showed no change for the second consecutive month. (See table B.)

Intermediate energy goods prices advanced 1.1 percent in October, after posting a 4.1-percent gain in September. Rising prices for liquefied petroleum gas, residual fuels, commercial electric power, industrial electric power, commercial natural gas, and industrial natural gas outweighed falling prices for gasoline, diesel fuel, and jet fuels.

Prices for materials for durable manufacturing decreased 0.2 percent in October, following a 0.3-percent gain in September. The index for copper cathode and refined copper fell 2.8 percent, after registering a 6.6- percent increase in the prior month. Prices for primary aluminum (except extrusion billet) showed no change, following a 2.7-percent rise a month ago. The indexes for aluminum mill shapes, copper and brass mill shapes, and plywood advanced less than in the previous month. Prices for flat glass and zinc turned down, after gaining a month earlier. On the other hand, the index for hot rolled sheet and strip turned up 0.6 percent in October, following a 0.4-percent drop in September. Prices for cold finished bars also rose, after falling in the prior month. The index for cold rolled sheet and strip declined less than a month ago, while prices for cement advanced, after showing no change in the previous month.

Prices for materials and components for construction edged down 0.1 percent in October, following a 0.1-percent rise in September. The gypsum products index fell 6.2 percent, after posting a 3.5-percent decline a month earlier. Prices for nonferrous wire and cable, plywood, fabricated structural metal products, and switchgear and switchboard equipment increased less than in the prior month. The index for millwork turned down, after showing no change a month ago. By contrast, prices for asphalt felts and coatings advanced 1.2 percent in October, following a 2.2-percent decrease in September. The indexes for softwood lumber and plastic construction products fell less than in the previous month.

Prices for intermediate foods and feeds advanced 0.6 percent in October, after registering a 1.1-percent gain in September. The index for prepared animal feeds rose 0.7 percent, following a 3.2-percent jump a month earlier. Prices for crude vegetable oils; natural, processed, and imitation cheese; and dry, condensed, and evaporated milk products turned down, after increasing in the prior month. The snack chips index gained less than a month ago. On the other hand, beef and veal prices advanced 1.6 percent on October, following a 1.3-percent drop in September. The indexes for refined sugar and pork also rose, after falling in the previous month. Flour prices increased more than a month earlier.

The index for materials for nondurable manufacturing advanced 0.1 percent in October, following a 0.5-percent decline in September. Prices for primary basic organic chemicals increased 0.2 percent, after posting a 5.6-percent decrease in the prior month. The plastic resins and materials index showed no change, following a 2.8-percent drop a month ago. Prices for phosphates and processed yarns and threads turned up, after falling in the previous month. The index for paper gained 0.5 percent, after showing no change a month earlier. Prices for basic inorganic chemicals declined less than in the prior month. By contrast, the paint materials index turned down 1.3 percent in October, following a 0.8-percent rise in September. Prices for synthetic rubber and leather also fell, after advancing a month ago.

Crude goods

The Producer Price Index for Crude Materials for Further Processing increased 3.4 percent in October, following a 5.3-percent advance in September. Prices for crude energy materials and for crude foodstuffs and feedstuffs also rose at a slower rate than in the prior month. The index for basic industrial materials turned down, after rising in the previous month. (See table B.)

The index for crude energy materials posted a 4.6-percent rise in October, following an 8.1-percent advance in September. A 12.3-percent increase in natural gas prices outweighed a 5.0-percent decline in the crude petroleum index and a 0.2-percent decrease in coal prices.

The index for basic industrial materials decreased 0.6 percent in October, after posting a 0.3-percent increase in September. Prices for iron and steel scrap dropped 6.6 percent, following a 0.7-percent gain in the prior month. The indexes for leaf tobacco and aluminum base scrap also turned down, after rising a month ago. Prices for copper ores and for construction sand, gravel, and crushed stone rose less than in the previous month. Conversely, the wastepaper index declined 5.0 percent in October, following an 8.7-percent drop in September. Prices for cattle hides rose more than a month earlier. The indexes for softwood logs and iron ores advanced, after falling last month.

The index for crude foodstuffs and feedstuffs increased 3.5 percent in October, compared to a 3.9-percent rise in September. Leading this deceleration were fluid milk prices, which dropped 5.4 percent in October, after edging up 0.3 percent a month ago. Prices for slaughter broilers and fryers; slaughter hogs; and fresh fruits and melons rose less than in the previous month. On the other hand, the index for slaughter cattle increased 3.0 percent in October, after registering a 2.0-percent decline in September. Corn and wheat prices advanced at a faster rate than in September.

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 5.0 percent in October, after posting a 6.2- percent gain in September. (Net output price indexes are not seasonally adjusted.) Prices received by the crude petroleum, natural gas, and natural gas liquids industry increased 6.2 percent, following an 8.1- percent rise in the prior month. The index for the oil and gas well drilling industry turned down, after advancing a month earlier. Prices received by the bituminous coal and lignite industry showed no change, after increasing in the previous month, while the index for the copper ores industry rose less than a month ago. By contrast, prices received by the iron ores industry turned up 2.3 percent, following a 2.2-percent decline in September. The index for the construction sand and gravel industry advanced more than in the prior month. In October, the Producer Price Index for the Net Output of Total Domestic Mining Industries stood at 128.7 (December 1984 = 100), 46.8 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Domestic Manufacturing Industries edged up 0.1 percent in October, after registering a 0.9-percent gain in September. In October, the industry groupings for transportation equipment; chemicals and allied products; food and kindred products; printing, publishing, and allied industries; electrical and electronic machinery and equipment; and tobacco manufactures experienced rising prices. Conversely, prices received by the petroleum refining and related products; the stone, clay, glass, and concrete products; and the measuring and controlling instruments industry groups displayed falling prices. In October, the Producer Price Index for the Net Output of Total Domestic Manufacturing Industries stood at 134.8 (December 1984 = 100), 3.5 percent above its year-ago level.

Services. Among services industries in October, advancing prices were observed for real estate agents and managers, general medical and surgical hospitals, skilled and intermediate care facilities, the non-local trucking industry, the cable and pay television services industry, and life insurance carriers. By contrast, operators and lessors of nonresidential buildings, the telecommunications (except radiotelephone) industry, the scheduled air transportation industry, and offices of physicians experienced declining prices in October.

Improved Quality Adjustment for Microprocessors

Effective with the release of January 2001 data, the Bureau of Labor Statistics will implement a new quality valuation methodology for microprocessors designed and sold for computer applications. This new quality adjustment methodology views changes in the processing power of microprocessors as changes in quality and permits the explicit estimation of their value. The new approach replaces current procedures which have generally been limited to considering price differences between a new microprocessor and its predecessor as a measure of the value of the quality difference between the two.

For additional information, see the October 2000 issue of the Producer Price Index Detailed Report, or contact the Section of Index Analysis and Public Information at (ppi-info@BLS.gov) or (202) 691-7705. Table 1. Producer price indexes and percent changes by stage of processing (1982=100)

1/ Comprehensive relative importance figures are initially computed 3/ Includes crude petroleum. after the publication of December indexes and are recalculated 4/ Excludes crude petroleum. after final December indexes are available. The first-published 5/ Percent of total finished goods. and final December relative importances initially appear, 6/ Percent of total intermediate materials. respectively, in the release tables containing January and May data. 7/ Formerly titled "Crude materials for 2/ The indexes for June 2000 have been recalculated to incorporate further processing, excluding crude late reports and corrections by respondents. All indexes foodstuffs and feedstuffs, plant and are subject to revision 4 months after original publication. animal fibers, oilseeds, and leaf tobacco." 8/ Percent of total crude materials.

See footnotes at end of table.

1/ The indexes for June 2000 have been recalculated to incorporate 2/ Not seasonally adjusted. late reports and corrections by respondents. All indexes are 3/ Not available. subject to revision 4 months after original publication.

1/ Data for June 2000 have been revised to reflect the availability of late reports and corrections by respondents. All data are subject to revision 4 months after original publication. 2/ Prices of some items in this grouping are lagged 1 month. Table 4. Producer price indexes for the net output of major industry groups, not seasonally adjusted

1/ Indexes in this table are derived from the net-output-weighted industry price indexes. Because of differences in coverage and aggregation methodology, they will generally not match the movements of similarly-titled indexes which are derived from traditional commodity groupings. 2/ The indexes for June 2000 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication. 3/ Not available. Table 5. Producer price indexes by stage of processing, seasonally adjusted (1982=100)

1/ All seasonally adjusted indexes are subject to change up to 5 years after original publication due to the recalculation of seasonal factors each January. The indexes for June 2000 have been recalculated to incorporate late reports and corrections by respondents. 2/ Includes crude petroleum. 3/ Excludes crude petroleum.