June 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 declined 0.4 percent in June, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decrease followed increases of 0.1 percent in May and 0.3 percent in April. Prices for finished goods, excluding energy, increased 0.1 percent in June. Prices for finished goods, excluding foods and energy, also increased 0.1 percent in June, after registering a 0.2-percent gain in May. At the earlier stages of processing, prices received by producers of intermediate goods inched down 0.1 percent, following a 0.1-percent rise in May. The crude goods index dropped 6.0 percent in June, after posting a 2.3-percent decrease in the previous month. (See table A.)

Among finished goods, a 2.5-percent decrease in June's finished energy goods index followed a 0.2-percent increase in May. Prices for finished consumer goods other than foods and energy showed no change in June, after increasing in the previous month. By contrast, prices for finished consumer foods posted a 0.1-percent gain, compared with a 0.4-percent decrease in May. The capital equipment index also turned up in June.

During the first 6 months of 2001, the finished goods price index advanced at a 2.4-percent seasonally adjusted annual rate (SAAR), after rising at a 2.5-percent rate during the latter half of 2000. In the first half of this year, the rate of increase in finished energy goods prices slowed to a 1.4-percent SAAR from a 9.2-percent rate of increase during the final 6 months of last year. Offsetting this deceleration, the index for finished consumer foods advanced at a 5.6-percent SAAR from December 2000 to June 2001, compared with a 0.7-percent rate of increase during the previous 6 months. Prices for finished goods other than foods and energy rose at a 1.6-percent annual rate during the first half of 2001, following a 1.5-percent rate of increase for the last 6 months of 2000. At the earlier stages of processing, the rate of increase in the intermediate goods index slowed to a 0.3-percent SAAR for the first half of this year from a 2.2-percent rate of increase during the final 6 months of last year. The crude goods price index fell at an annual rate of 25.4 percent from December 2000 to June 2001, following a 28.4-percent rate of increase in the second half of 2000. (See summary below.)

Seasonally adjusted annual rate for: Percentage 6 3 3 3 change 12 months months months months Grouping months ended ended ended ended ended in December in in in in June Dec. March June 1998 1999 2000 2001 2000 2001 2001

Crude materials for further processing -16.7 15.3 35.5 -25.4 57.3 -24.3 -26.4 Foodstuffs and feedstuffs -11.0 -.1 7.4 3.6 36.5 14.8 -6.4 Crude energy materials -23.8 36.9 85.6 -43.0 102.6 -44.1 -41.9 Crude nonfood materials less energy -16.0 14.0 -5.5 -12.3 -9.2 -13.4 -11.1 NOTE: Late reports and corrections by respondents may cause some indexes to change 4 months after original publication. In addition, seasonally adjusted indexes may be revised for 5 years due to the recalculation of seasonal factors each January.

Before seasonal adjustment, the Producer Price Index for Finished Goods decreased 0.3 percent in June to stand at 142.1 (1982=100). From June 2000 to June 2001, prices for finished goods gained 2.5 percent. During the same period, the index for finished energy goods increased 5.1 percent, finished consumer foods advanced 3.1 percent, and finished goods other than foods and energy rose 1.6 percent. Prices received by producers of intermediate goods gained 1.2 percent for the 12 months ended in June, and the index for crude goods decreased 2.2 percent during the same period.

Finished goods

Finished energy goods prices declined 2.5 percent in June, after posting a 0.2-percent increase in May. The index for residential natural gas fell 5.8 percent, following a 0.2-percent advance in the previous month. Prices for residential electric power, gasoline, and home heating oil also turned down in June. By contrast, the rate of decline in prices for liquefied petroleum gas slowed from 7.4 percent in May to 1.3 percent in June. Prices for diesel fuel and finished lubricants rose more than they did in the prior month.

Prices for finished consumer goods other than foods and energy showed no change in June, following a 0.4-percent advance in May. The index for cigarettes was essentially unchanged in June, after jumping 5.6 percent in the prior month. Following increases in May, prices for book publishing and for men's and boys' apparel turned down in June. The indexes for prescription drugs and home electronic equipment fell, after showing no change in the previous month. On the other hand, prices for light motor trucks increased 0.5 percent in June, following a 1.6-percent drop in May. The indexes for passenger cars, footwear, and for sanitary papers and health products also turned up, after declining a month ago. During the first 6 months of 2001, the index for finished consumer goods other than foods and energy rose at a 2.3-percent SAAR, after increasing at a 1.7- percent rate during the latter half of 2000.

The index for finished consumer foods turned up 0.1 percent in June, after decreasing 0.4 percent a month earlier. Beef and veal prices increased 0.9 percent, following a 2.7-percent decline in May. The indexes for eggs for fresh use and pork fell less than they did a month ago. Prices for processed young chickens and for processed fruits and vegetables turned up in June. By contrast, the rate of increase in the dairy products index slowed from 4.6 percent in May to 1.6 percent in June. Prices for fresh and dry vegetables and processed turkeys turned down, following increases in the previous month.

The capital equipment index gained 0.1 percent in June, after edging down 0.1 percent in May. Light motor truck prices moved up 0.5 percent, following a 1.6-percent decline a month ago. The civilian aircraft index rose more than it did in May. Prices for integrating and measuring instruments; tools, dies, jigs, fixtures, and industrial molds; passenger cars; and industrial material handling equipment turned up in June, after declining in the previous month. By contrast, the index for heavy motor trucks decreased 2.0 percent in June, following a 0.3-percent decline in May. Prices for electronic computers also fell more than they did a month earlier. The indexes for pumps and compressors and for agricultural machinery turned down, after increasing in the prior month. From December 2000 to June 2001, the capital equipment index rose at a SAAR of 0.6 percent, after posting a 1.0-percent rate of increase for the second half of 2000.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components edged down 0.1 percent in June, seasonally adjusted, after registering a 0.1-percent gain in May. Prices for materials for durable manufacturing and intermediate energy goods also turned down in June, following advances in May. The index for materials and components for construction increased less than it did a month earlier. Conversely, June prices for intermediate foods and feeds rose more than they did in the previous month. The index for nondurable manufacturing materials fell slightly less in June than it did in May. The June index for intermediate materials less foods and energy decreased 0.3 percent, after edging up 0.1 percent in the prior month. (See table B.)

Prices for durable manufacturing materials fell 0.4 percent in June, following a 0.8-percent rise in May. Prices for primary aluminum (except extrusion billet) declined 3.8 percent, after posting a 3.9-percent gain in the previous month. The indexes for building paper and board; aluminum mill shapes; hot rolled bars, plates, and structural shapes; and flat glass also turned down in June. Plywood prices increased less than they did a month earlier, while the indexes for hot rolled sheet and strip, cold finished bars, and for copper cathode and refined copper decreased more in June than they did in May. On the other hand, prices for semi-finished steel mill products advanced 0.7 percent, following a 0.5-percent decline in the prior month. The index for copper and brass mill shapes also turned up in June. Prepared paint prices rose more in June than they did a month earlier. The index for durable manufacturing materials fell at a 1.9- percent SAAR during the first half of 2001, after dropping at a 2.6-percent SAAR during the second half of 2000.

The index for materials and components for construction rose 0.1 percent in June, following a larger 0.8-percent rise in May. Leading this deceleration, price increases for softwood lumber slowed to 0.6 percent, after posting an 11.2-percent jump in the previous month. The indexes for softwood plywood, switchgear, and for air conditioning and refrigeration equipment also advanced less than they did a month earlier. Prices for fabricated ferrous wire products declined in June, after showing no change in the prior month, while the cement index fell, following a May rise. By contrast, prices for gypsum products increased 0.5 percent in June, after decreasing 6.0 percent a month earlier. The indexes for plastic construction products, nonferrous wire and cable, and for asphalt felts and coatings also turned up in June. Prices for fabricated structural metal products showed no change, after edging down in the previous month, while the millwork index rose slightly more in June than it did in the prior month. From December 2000 to June 2001, prices for materials and components for construction advanced at a 2.0-percent SAAR, following a 1.3- percent rate of decrease during the June 2000 to December 2000 period.

The June index for intermediate energy goods edged down 0.1 percent, after registering a 0.1-percent gain in May. Commercial natural gas prices dropped 8.8 percent, following a 1.0-percent increase a month earlier. The indexes for industrial natural gas and gasoline also turned down in June. Jet fuel prices rose less than they did in the previous month, while the indexes for residual fuels and natural gas to electric utilities declined at a faster rate in June than they did in May. By contrast, the commercial electric power index jumped 3.1 percent, after falling 0.8 percent in May. Industrial electric power prices also turned up in June. The liquefied petroleum gas index decreased less than it did a month earlier, while diesel fuel prices advanced slightly more than they did in the prior month. After rising at a 15.1-percent SAAR during the latter half of 2000, the index for intermediate energy goods declined at a 1.3-percent rate during the first half of 2001.

The index for intermediate foods and feeds increased 1.3 percent in June, following a 0.3-percent gain in May. In June, rising prices for prepared animal feeds; fluid milk products; natural, processed, and imitation cheese; beef and veal; crude vegetable oils; and flour outweighed falling prices for confectionery materials and pork. The index for intermediate foods and feeds advanced at a 4.1-percent SAAR from December 2000 to June 2001, after posting a 1.1-percent rate of increase from June 2000 to December 2000.

The nondurable manufacturing materials index declined 0.6 percent in June, following a 0.7-percent decrease in May. In June, falling prices were observed for primary basic organic chemicals, nitrogenates, plastic resins and materials, woodpulp, paperboard, and processed yarns and threads. By contrast, the indexes for gray fabrics, finished fabrics, phosphates, inedible fats and oils, and paint materials rose in June. Prices for materials for nondurable manufacturing declined at a 0.3-percent SAAR during the December 2000 to June 2001 period, following a 0.1-percent rate of decrease over the prior 6-month period.

Crude goods

The Producer Price Index for Crude Materials for Further Processing fell 6.0 percent, seasonally adjusted, after declining 2.3 percent in May. Prices for crude energy materials decreased at a faster rate in June than they did in the previous month. By contrast, the index for crude foodstuffs and feedstuffs fell at a slower pace than it did in May. Basic industrial material prices declined 0.2 percent for the second consecutive month. (See table B.)

The index for crude energy materials decreased 11.9 percent in June, following a 3.7-percent fall in May. The largest contributor to this faster rate of decline was the natural gas index, which dropped 19.1 percent in June and 7.2 percent in May. Prices for coal fell 6.6 percent in June, after posting a 2.1-percent gain in the previous month. The crude petroleum index increased 1.2 percent, after rising 1.8 percent in May. Prices for crude energy materials decreased at a 43.0-percent SAAR from December 2000 to June 2001, after rising at a 56.0-percent rate in the previous 6-month period.

Prices for crude foodstuffs and feedstuffs declined 0.1 percent, after posting a 1.1-percent decrease in May. The slaughter cattle index fell 1.1 percent in June, after dropping 4.5 percent in the prior month. Prices for slaughter hogs and corn turned up, after falling in May. The Irish potatoes for processing index showed no change in June, after falling in the previous month. Prices for slaughter broilers and fryers decreased less than they did in May. The soybeans index rose more in June than it did in the prior month. On the other hand, fluid milk prices rose 3.4 percent in June, after increasing 10.4 percent in May. The indexes for alfalfa hay and wheat turned down, after showing gains in the previous month. Prices for fresh vegetables (except potatoes) fell more than they did in May. During the first half of 2001, the crude foodstuffs and feedstuffs index rose at a SAAR of 3.6 percent, after increasing at a rate of 12.0 percent in the last half of 2000.

Prices for basic industrial materials declined 0.2 percent for the second consecutive month. In June, falling prices for raw cotton, wastepaper, cattle hides, gold ores, aluminum base scrap, and for iron and steel scrap outweighed rising prices for softwood logs, bolts, and timber; construction sand, gravel, and crushed stone; pulpwood; and phosphates. The index for basic industrial materials decreased at a SAAR of 12.3 percent from December 2000 to June 2001, after falling at a 9.0-percent rate in the previous 6-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 decreased 9.4 percent in June, after registering a 3.6- percent decline in May. (Net output price indexes are not seasonally adjusted.) Prices received by the crude petroleum, natural gas, and natural gas liquids industry dropped 11.7 percent, following a 4.9-percent decrease in the prior month. The indexes for the bituminous coal and lignite, gold ores, and crushed and broken granite industries turned down in June, after rising in the previous month. June prices received by the oil and gas well drilling industry rose more slowly than in May. By contrast, the index for rock salt mining increased 8.8 percent in June, following a 0.2-percent rise a month ago. Prices for metal mining services advanced, after showing no change in May. The construction sand and gravel industry index rose, after falling in the prior month. During the first half of 2001, the index for the net output of total domestic mining industries fell at an annual rate of 37.8 percent, after rising at a 53.1- percent rate for the latter half of 2000. In June, this index stood at 115.5 (December 1984=100), 2.4 percent below its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Domestic Manufacturing Industries decreased 0.2 percent in June, after posting a 0.7-percent rise in May. Leading this reversal, prices received by the petroleum refining and related products industry group dropped 3.3 percent, following a 6.0-percent gain in the previous month. The indexes for the tobacco manufactures industry group and the lumber and wood products (except furniture) industry group rose less than they did in May. Prices received by the printing and publishing and the stone, clay, glass, and concrete products industry groups turned down in June, after increasing in the prior month. On the other hand, the index for the transportation equipment industry group decreased 0.2 percent in June, after falling 0.5 percent a month earlier. Prices received by the chemicals and allied products and the rubber and miscellaneous plastic products industry groups also declined less than they did in May. The indexes for the machinery (except electrical) and the measuring and controlling instruments industry groups turned up in June, after showing no change in the previous month. During the first half of 2001, the index for the net output of total manufacturing industries rose at an annual rate of 2.5 percent, following a 0.1-percent annual rate of increase for the second half of 2000. In June, this index stood at 136.0 (December 1984=100), 1.3 percent above its year- ago level.

Services. Among service industries in June, price increases were observed for real estate agents and managers; offices of physicians; security brokers, dealers, and investment banking companies; and operators and lessors of nonresidential buildings. By contrast, price decreases were observed for the telephone communications (except radiotelephone) industry; hotels and motels; airport terminal services; and travel agencies.

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.