December 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 December, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This followed a 0.1-percent increase in November and a 0.4-percent advance in October. The index for finished goods other than foods and energy rose 0.3 percent in December, after showing no change in the previous month. Prices received by producers of intermediate goods gained 0.2 percent, following a similar decline in the prior month. The crude goods index jumped 8.7 percent, after posting a 2.0- percent decrease in November. (See table A.)

Among finished goods in December, the index for consumer goods other than foods and energy rose 0.3 percent, and prices for capital equipment increased 0.2 percent. On the other hand, the finished energy goods index fell 0.7 percent, and prices for finished consumer foods declined 0.4 percent in December.

Before seasonal adjustment, the Producer Price Index for Finished Goods edged down 0.1 percent to stand at 139.7 (1982=100). From December 1999 to December 2000, finished goods prices advanced 3.6 percent (the largest calendar-year increase since a 5.7-percent gain in 1990), after rising 2.9 percent during 1999. Prices for finished consumer foods increased 1.7 percent during 2000, after rising 0.8 percent during the 12 months ended December 1999. The index for finished goods other than foods and energy rose 1.2 percent in 2000, following a 0.9-percent gain in 1999. By contrast, the price increases for finished energy goods slowed slightly, advancing 17.1 percent in 2000 after posting an 18.1 percent rise in the previous calendar year. At the earlier stages of processing, the intermediate goods index increased 4.1 percent from December 1999 to December 2000, after registering a 3.7-percent rise during 1999. Prices for crude materials for further processing jumped 31.6 percent in 2000, following a 15.3-percent increase in the prior calendar year. (See summary below.)

Seasonally adjusted annual rate for: Percentage 3 3 3 3 change 12 months months months months Grouping months ended ended ended ended ended in December in in in in March June Sept. Dec. 1998 1999 2000 2000 2000 2000 2000

Finished goods

The index for finished consumer goods other than foods and energy turned up 0.3 percent in December, after edging down 0.1 percent in November. Prescription drug prices rose 0.6 percent, following a 1.6- percent decline in the prior month. The indexes for alcoholic beverages, light motor trucks, and women's apparel also rose, after falling in the prior month. Passenger car prices rose at a faster pace than in November. By contrast, December prices for newspaper circulation edged up 0.1 percent, following a 2.9-percent increase in the previous month. The indexes for men's and boys' apparel and mobile homes edged down, after rising last month. Prices for cosmetics and other toilet preparations and for girls, children's and infants' apparel showed no change, following an increase in November. From December 1999 to December 2000, the index for finished consumer goods other than foods and energy increased 1.2 percent, the same rate of increase posted for calendar year 1999.

The capital equipment index gained 0.2 percent in December, after showing no change in the preceding two months. More than half of December's increase can be traced to a 1.4-percent advance in prices for light motor trucks and a 0.5-percent increase in passenger car prices. The indexes for civilian aircraft, agricultural machinery and equipment, and commercial furniture also rose in December. On the other hand, prices for x-ray and electromedical equipment, electronic computers, truck trailers, and heavy motor trucks declined in December. For the 12 months ended December 2000, capital equipment prices increased 1.2 percent, following a 0.3-percent rise during the previous calendar year.

The index for finished energy goods fell 0.7 percent in December, after posting a 0.4-percent gain in November. Gasoline prices dropped 8.4 percent, following a 1.4-percent increase a month ago. The index for finished lubricants also declined, after rising in November. Liquefied petroleum gas price increases slowed in December from November's pace. By contrast, prices for residential electric power turned up 1.2 percent in December, following a 0.7-percent decrease a month earlier. The index for residential natural gas rose more than in the prior month. Prices for home heating oil fell less than in November.

The finished consumer foods index fell 0.4 percent in December, after registering a 0.2-percent gain in November. Prices for fresh and dry vegetables dropped 26.0 percent, following a 4.0-percent increase a month earlier. The indexes for pork, processed young chickens, bakery products, soft drinks, and for shortening and cooking oils also turned down, after rising in November. Conversely, prices for dairy products increased 2.9 percent in December, following a 1.0-percent gain in the prior month. The index for beef and veal also rose more than in the previous month. Prices for eggs for fresh use, fresh fruits and melons, and for finfish and shellfish turned up, after falling in November.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components moved up 0.2 percent in December, seasonally adjusted, following a 0.2-percent decrease in November. Prices for intermediate energy goods rose, after showing no change a month ago. The index for materials for durable manufacturing turned up, following a decline in the previous month. Prices for intermediate foods and feeds rose in December, after showing no change in the prior month. The construction materials index edged up, following a decline in November. Nondurable manufacturing material prices fell 0.1 percent for the second consecutive month. Excluding foods and energy, the index for intermediate materials showed no change in December, after registering a 0.1-percent decrease a month earlier. (See table B.)

Prices for intermediate energy materials increased 1.0 percent, after posting no change in November. The industrial natural gas index surged 33.9 percent in December (the largest monthly increase since publication of this index began in January 1992), following a 2.6-percent decline in the prior month. The indexes for commercial natural gas, natural gas to electric utilities, commercial electric power, and jet fuels also turned up, following decreases in the previous month. Prices for industrial electric power rose more than a month earlier. By contrast, the gasoline index dropped 8.4 percent, after registering a 1.4-percent increase in November. Diesel fuel prices also turned down, after rising in the prior month. The December residual fuels index fell more than in November, and liquefied petroleum gas prices rose less in December than in the previous month. From December 1999 to December 2000, the intermediate energy goods index advanced 19.5 percent, following a 19.6-percent gain in 1999.

Durable manufacturing material prices moved up 0.2 percent, after posting a 1.1-percent decline in November. The steel mill products index showed no change for December, following a 1.6-percent drop in the previous month. Prices for primary aluminum (except extrusion billet), aluminum mill shapes, copper cathode and refined copper, and for copper and brass mill shapes turned up, after falling a month earlier. The plywood index decreased less than in the prior month. On the other hand, prepared paint prices turned down 0.5 percent, following a 0.3-percent gain in November. The indexes for hardwood lumber and for building paper and board declined more than a month ago. Prices for materials for durable manufacturing increased 0.6-percent during 2000, after posting a 2.4-percent rise in the previous year.

December's 1.7-percent advance for intermediate foods and feeds prices represents the largest monthly increase since a 1.9-percent rise in March 1997. This index showed no change in November. Prepared animal feed prices jumped 3.5 percent in December, following a 0.5-percent rise a month ago. The indexes for fluid milk products; natural, processed, and imitation cheese; and confectionery materials turned up, after falling in the previous month. Prices for snack chips and for beef and veal increased more than a month earlier. The crude vegetable oils index declined less than in the prior month. By contrast, pork prices decreased 0.6 percent, following a 1.8-percent advance in November. Butter prices also turned down, after rising in the previous month. The refined sugar index was unchanged, after rising a month ago. For the 12 months ended in December 2000, the intermediate foods and feeds index increased 3.5 percent, following a 4.2-percent drop in the prior year.

Prices for materials and components for construction edged up 0.1 percent in December, after posting a 0.2-percent decline in November. The softwood lumber index rose 0.1 percent, following a 1.4-percent decrease a month earlier. The indexes for asphalt felts and coatings, switchgear, and for plumbing fixtures and brass fittings also turned up, after declining in the prior month. Prices for plywood and gypsum products fell less than a month ago. Prices for fabricated structural metal products rose, following no change in November. By contrast, the index for nonferrous wire and cable moved down 0.3 percent, after registering a 0.2-percent increase in the previous month. Prices for wiring devices and heating equipment advanced less than a month ago. The index for materials and components for construction edged up 0.1 percent during 2000, after a 2.2-percent rise during all of 1999.

The index for materials for nondurable manufacturing inched down 0.1 percent, for the second consecutive month. In December, falling prices for plastic resins and materials, paper, paperboard, woodpulp, intermediate basic organic chemicals, and for processed yarns and threads slightly outweighed rising prices for primary basic organic chemicals, fertilizer materials, inedible fats and oils, and for alkalies and chlorine. During 2000, prices for materials for nondurable manufacturing jumped 4.1 percent, after increasing 4.0 percent in 1999.

Crude goods

The Producer Price Index for Crude Materials for Further Processing increased 8.7 percent in December, seasonally adjusted, following a 2.0- percent decline in November. Prices turned up for crude energy materials, after falling in the prior month. The index for crude foodstuffs and feedstuffs rose more than a month earlier. Prices for basic industrial materials remained unchanged in December, after declining a month ago. (See table B.)

The index for crude energy materials advanced 14.8 percent in December, after posting a 4.1-percent decrease in November. Prices for natural gas jumped 35.3 percent, following an 11.1-percent decline in the previous month. The index for coal turned up 3.0 percent, after falling 1.2 percent a month ago. Conversely, crude petroleum prices fell 11.1 percent in December, after increasing 7.1 percent in November. The crude energy materials index advanced 76.0 percent during 2000 (the largest 12- month increase since publication of this index began in January 1974), following a 36.9-percent rise in 1999.

Prices for crude foodstuffs and feedstuffs increased 3.9 percent in December, after posting a 1.3-percent gain in November. The index for slaughter hogs advanced 12.0 percent, following a 9.6-percent rate of decline in the previous month. Prices for fluid milk, slaughter broilers and fryers, soybeans, and for fresh fruits and melons also turned up, after decreasing a month ago. On the other hand, the index for fresh and dry vegetables dropped 26.0 percent in December, following a 4.0-percent rise in November. Prices for wheat, slaughter turkeys, and raw cane sugar also turned down, after advancing in the prior month. The corn index rose less than in November. During 2000, prices for crude foodstuffs and feedstuffs rose 7.2 percent, after edging down 0.1 percent in 1999.

The index for crude nonfood materials less energy showed no change in December, after declining 2.3 percent in November. Iron and steel scrap prices edged up 0.2 percent, following an 8.2-percent decrease a month ago. The indexes for leaf tobacco, copper ores, gold ores, and cattle hides also turned up, after falling in the previous month. By contrast, wastepaper prices declined 8.4 percent in December, following a 5.2-percent decrease in November. The index for construction sand, gravel, and crushed stone turned down, after rising a month earlier. Pulpwood prices increased at a slower rate than in November. The basic industrial materials index fell 5.8 percent during the 2000 calendar year, following a 14.0-percent advance in 1999.

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 12.0 percent in December, following a 3.2-percent decline in November. (Net output price indexes are not seasonally adjusted.) In December, prices for the crude petroleum, natural gas, and natural gas liquids industry advanced 14.9 percent, after showing a 3.9- percent decrease in the prior month. Prices turned up for the bituminous coal and lignite, copper ores, and gold ores industries, after falling in November. The index for the kaolin and ball clay industry increased more than in the previous month. By contrast, price increases for the oil and gas well drilling industry slowed to 2.1 percent in December from 5.7 percent a month earlier. Prices for the construction sand and gravel; crushed and broken granite; potash, soda, and borate minerals; and coal mining services industries turned down, following increases last month. In December, the Producer Price Index for the Net Output of Total Domestic Mining Industries stood at 139.6 (December 1984=100). From December 1999 through December 2000, this index increased 61.0 percent, following a 29.8- percent advance in the prior year.

Manufacturing. The Producer Price Index for the Net Output of Total Domestic Manufacturing Industries decreased 0.4 percent in December, after edging up 0.1 percent in November. Prices received by the petroleum refining industry group fell 6.6 percent, following a 1.0-percent gain in the previous month. The index for the printing, publishing, and allied industries group rose less than a month ago. After increasing in the prior month, prices remained unchanged for the non-electrical machinery, rubber and miscellaneous plastic products, and furniture and fixtures industry groups. By contrast, the index for the chemicals and allied products industry group turned up 0.3 percent in December, following a 0.5-percent decline in November. Prices for the food and kindred products industry group rose more than in the prior month. The index for the transportation equipment industry group turned up, after falling a month earlier. Price declines were smaller in December than in November for the lumber and wood products (except furniture) industry group and for the electrical and electronic machinery, equipment, and supplies industry group. In December, the Producer Price Index for the Net Output of Total Domestic Manufacturing Industries stood at 134.4 (December 1984=100). From December 1999 through December 2000, this index rose 3.0 percent, following a 3.7-percent increase in 1999.

Services. Among service industries in December, price increases were registered for general medical and surgical hospitals, operators and lessors of nonresidential buildings, and scheduled air transportation. On the other hand, prices for deep sea foreign transportation of freight, travel agencies, real estate agents and managers, passenger car rental, non- local trucking, and legal services decreased in December.

Recalculated Seasonal Adjustment Factors and Relative Importances to be Available on February 14, 2001

Each year with the release of PPI data for January, seasonal adjustment factors are recalculated to reflect price movements from the just-completed calendar year. This routine annual calculation may result in revisions to seasonally adjusted indexes for the previous 5 years. The following information will be available on February 14, 2001 (2 work days prior to the release of PPI data for January 2001 on February 16):

-Seasonal factors for commodity indexes for the year 2001,

-Recalculated seasonal factors for the last 5 years (1996-2000) for the commodity indexes,

-Recalculated seasonal factors for the last 5 years (1996-2000) for the stage-of-processing indexes.

In addition to recalculated seasonal factors, relative importances, as of December 2000, will also be available on February 14, 2001, at ftp://ftp.bls.gov which is the BLS ftp site. Choose the "pub" directory, the "special.requests" directory, and the "ppi" directory.

To request any of this information, call the Division of Industrial Prices and Price Indexes, Section of Index Analysis and Public Information at (202) 691-7705.

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