May 2001 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 0.1 percent in May, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.3-percent gain in April and a 0.1-percent decline in March. Prices for finished goods other than foods and energy increased 0.2 percent for the second consecutive month. The intermediate goods index rose 0.1 percent, after a 0.2-percent decline in the prior month. Prices for crude goods turned down 2.3 percent, following a 0.9-percent rise in April. (See table A.)

The May increase in the finished goods index was led by a 5.6-percent jump in cigarette prices. (Excluding cigarettes, the index for overall finished goods and the index for finished goods other than foods and energy both would have decreased 0.1 percent in May.) Higher finished energy goods prices also contributed to May's increase, although to a lesser extent. By contrast, the index for finished consumer foods fell 0.4 percent, and capital equipment prices declined 0.1 percent in May.

Before seasonal adjustment, the Producer Price Index for Finished Goods advanced 0.6 percent to stand at 142.5 (1982=100). From May 2000 to May 2001, prices for finished goods gained 3.8 percent. Over the same period, the index for finished energy goods increased 14.5 percent, prices for finished goods other than foods and energy advanced 1.6 percent, and the finished consumer foods index rose 2.6 percent. Prices received by producers of intermediate goods increased 2.3 percent for the 12 months ended May 2001, and the index for crude goods advanced 12.9 percent during the same period.

Finished goods

Led by 5.6-percent price increase for cigarettes, the index for finished consumer goods other than foods and energy advanced 0.4 percent in May, after posting a 0.2-percent gain in April. Prices for book publishing; men's and boys' apparel; household furniture; jewelry, platinum, and karat gold; and lawn and garden equipment (except tractors) increased, after falling in April. Conversely, prices for light motor trucks turned down 1.6 percent, following a 0.1-percent gain in the prior month. The indexes for passenger cars, textile housefurnishings, and for sanitary papers and health products also fell in May, after rising in April. Prices for prescription drugs showed no change in May, following an increase in the previous month.

The index for finished energy goods advanced 0.2 percent in May, after posting a 0.1-percent gain in April. Prices for home heating oil, residential electric power, gasoline, and diesel fuel rose in May, but were slightly offset by a 7.4-percent decline in the liquefied petroleum gas index.

The finished consumer foods index decreased 0.4 percent in May, after showing a 0.6-percent increase in April. Prices for eggs for fresh use dropped 21.4 percent, following a 37.0-percent increase in the prior month. The indexes for finfish and shellfish, pork, beef and veal, and processed young chickens also turned down, after posting gains in April. Processed turkey prices rose less than they did in the previous month. By contrast, the index for fresh and dry vegetables advanced 0.7 percent, after dropping 17.3 percent in April. Prices for dairy products and for fresh fruits and melons increased more than they did the month before. The roasted coffee index fell less than it did in April. Prices for bakery products turned up in May, after falling in the previous month.

Capital equipment prices declined 0.1 percent in May, after gaining 0.3 percent in April. The light motor truck index dropped 1.6 percent, after increasing 0.1 percent in the previous month. Prices for integrating and measuring instruments, heavy motor trucks, and passenger cars also turned down in May, after showing increases in April. The civilian aircraft index rose less than it did in the prior month. On the other hand, prices for oil field and gas field machinery increased 1.6 percent in May, after posting a 0.5-percent gain in April. The index for mining machinery and equipment also rose more than it did in the previous month. Prices for X-ray and electromedical equipment fell less in May than they did in April.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components inched up 0.1 percent in May, seasonally adjusted, after decreasing 0.2 percent in the previous three months. Prices for intermediate energy goods, durable manufacturing materials, and intermediate foods and feeds also turned up, following declines in April. The index for construction materials rose more than it did a month ago. Conversely, May prices for nondurable manufacturing materials fell a faster rate than they exhibited in April. Excluding foods and energy, the index for intermediate materials advanced 0.1 percent, following a 0.1- percent dip a month earlier. (See table B.)

Prices for intermediate energy goods edged up 0.1 percent in May, after registering a 1.5-percent decline in April. The jet fuels index rose 5.7 percent, following a 6.5-percent decrease in the previous month. Prices for diesel fuel, commercial natural gas, and industrial natural gas also turned up in May, after falling a month ago. The indexes for liquefied petroleum gas and commercial electric power declined at a slower rate in May than they did in April. By contrast, gasoline prices increases slowed to 0.4 percent in May, following a 7.0-percent advance in April. The indexes for industrial electric power and natural gas to electric utilities fell more than they did in the previous month.

The index for durable manufacturing materials rose 0.8 percent in May, after declining 0.6 percent in April. Prices for primary aluminum (except extrusion billet) advanced 3.9 percent, following a 4.4-percent drop a month earlier. The indexes for plywood and aluminum mill shapes also turned up, after falling in April. Prices for building paper and board rose more in May than they did in the previous month. On the other hand, the index for semi-finished steel mill products decreased 0.5 percent in May, following a 1.4-percent gain in April. Zinc prices fell at a faster pace than they did in the prior month.

The index for materials and components for construction advanced 0.8 percent in May, after posting a 0.1-percent gain in both March and April. Softwood lumber prices jumped 11.2 percent in May, following a 0.8-percent advance in the prior month. The indexes for plywood, plumbing fixtures and brass fittings, and cement turned up, after falling in April. Millwork prices increased at a faster rate than they did in the previous month. By contrast, the index for plastic construction products declined 0.5 percent in May, following a 0.7-percent rise in April. Prices for gypsum products fell more than they did a month ago. The index for fabricated structural metal products edged down, after showing no change in the prior month. Prices for asphalt felts and coatings decreased, following increases in April.

The intermediate foods and feeds index increased 0.3 percent in May, after edging down 0.1 percent in April. Prices for prepared animal feeds showed no change, following a 1.9-percent decline a month ago. The indexes for fluid milk products; natural, processed, and imitation cheese; and confectionery materials rose more than they did in April. Flour prices turned up, after decreasing in the prior month. Conversely, the beef and veal index fell 2.7 percent in May, following a 0.3-percent gain in April. Prices for pork and liquid beverage bases for soft drinks also turned down, after rising a month earlier. The butter index increased at a slower rate in May than it did in the previous month.

Prices for nondurable manufacturing materials decreased 0.7 percent in May, following a 0.4-percent decline in April. After posting a 12.9- percent increase in the previous month, the index for sulfuric acid dropped 22.6 percent. In May, prices for plastic resins and materials, paper, synthetic fibers, finished fabrics, and phosphates also turned down, following increases a month earlier. By contrast, the index for primary basic organic chemicals inched up 0.1 percent, after falling 4.1 percent in April. Prices for medicinal and botanical chemicals also turned up, following decreases a month ago. The indexes for nitrogenates and woodpulp fell less in May than they did in the prior month.

Crude goods

The May Producer Price Index for Crude Materials for Further Processing decreased 2.3 percent, seasonally adjusted, after rising 0.9 percent in April. Accounting for much of this downturn, prices for crude energy materials fell in May, following an April increase. The index for crude foodstuffs and feedstuffs decreased at a faster pace in May than it did in the prior month. Conversely, basic industrial material prices fell less rapidly than they did in April. (See table B.)

The index for crude energy materials declined 3.7 percent in May, following a 3.0-percent advance in April. In similar fashion, a 7.2- percent decrease in May prices for natural gas followed a 3.8-percent increase in the previous month. The May crude petroleum index rose only 1.8 percent, compared with a 2.4 percent increase last month. By contrast, price increases for coal accelerated to 2.1 percent in May from 0.3 percent in April.

The index for crude foodstuffs and feedstuffs declined 1.1 percent in May, following a 0.5-percent decrease in April. The largest contributor to this faster rate of decline was the slaughter cattle index, which dropped 4.5 percent in May and 0.3 percent in April. The indexes for corn, slaughter broilers and fryers, and slaughter hogs also fell more in May than they did in April. Prices for unprocessed finfish turned down, after rising in April. By contrast, the wheat index turned up 9.4 percent in May, following a 6.6-percent decrease in the prior month. Prices for soybeans and for fresh and dry vegetables rose, after falling in April. The fluid milk index rose at a faster pace in May than it did in the previous month.

Prices for basic industrial materials declined 0.2 percent, following a 2.6-percent decrease in April. In May, falling prices for wastepaper, raw cotton, copper base scrap, and phosphates slightly outweighed rising prices for cattle hides, gold ores, softwood logs, and aluminum base scrap.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries declined 3.6 percent in May, following a 1.1-percent advance in April. (Net output price indexes are not seasonally adjusted.) Most of this downturn can be traced to a 4.9-percent drop in prices received by the crude petroleum, natural gas, and natural gas liquids industry, which followed a 1.6-percent rise in the prior month. The index for the construction sand and gravel industry also turned down in May. By contrast, prices received by the gold ores industry moved up 5.4 percent, after decreasing 4.6 percent in April. The indexes for the bituminous coal and lignite industry and the oil and gas well drilling industry gained more in May than they did a month earlier. Prices received by the oil and gas exploration services industry rose, after falling in the previous month. In May, the Producer Price Index for the Net Output of Total Mining Industries stood at 127.5 (December 1984 = 100), 26.7 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries rose 0.7-percent, following a 0.6-percent increase in April. In May, the industry groups for petroleum refining and related products, tobacco manufactures, lumber and wood products (except furniture), food and kindred products, and for printing, publishing, and allied industries registered advancing prices. Partly offsetting these gains, the industry groups for transportation equipment, chemicals and allied products, and for rubber and miscellaneous plastic products posted declining prices. In May, the Producer Price Index for the Net Output of Total Manufacturing Industries stood at 136.3 (December 1984 = 100), 2.4 percent above its year-ago level.

Services. Among service industries in May, price increases were registered by the industries for real estate agents and managers, property and casualty insurance, operators and lessors of nonresidential buildings, general medical and surgical hospitals, and scheduled air transportation. On the other hand, falling prices were observed for offices of physicians, the passenger car rental industry, the deep sea foreign transportation of freight industry, hotels and motels, and the prepackaged software industry.

One-Month Lag in Producer Price Indexes for Liquefied Petroleum Gas to be Removed Effective with Data for July 2001

Effective with the release of data for July 2001, the 1-month lag in the Producer Price Index (PPI) for Liquefied Petroleum Gas, commodity code 05-32, will be eliminated. Since 1971, the liquefied petroleum gas index has been calculated with prices that lag behind the index reference date by one month. For example, the Producer Price Index for January contains liquefied petroleum gas prices for December.

In order to eliminate this lag, the Bureau of Labor Statistics will utilize the natural gas liquids price data published by the Oil Price Information Service (OPIS) to estimate the PPI. These data will be used in the first-released index for liquefied petroleum gas. As is customary practice, a revised PPI for Liquefied Petroleum Gas will be published four months later. At that time, the interim estimates of price movement using OPIS data will be replaced with prices from the PPI sample.

The July 2001 PPI for Liquefied Petroleum Gas to be released on August 10 will reflect the prices for this commodity as of July 2001. Indexes prior to July will continue to represent liquefied petroleum gas prices with a 1-month lag. As a result of this modification, the July 2001 percent change for the liquefied petroleum gas index will represent a 2- month (May to July) price movement.