July 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 0.9 percent in July, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This index posted a 0.4-percent drop in June and increased 0.1 percent in May. The index for finished goods other than foods and energy rose 0.2 percent in July, after inching up 0.1 percent a month ago. Prices received by manufacturers of intermediate goods fell 1.0 percent, following a 0.1-percent decrease a month earlier. The crude goods index posted a 5.3-percent decline, after moving down 6.0 percent in June. (See table A.)

July's faster rate of decline in the finished goods index was primarily due to finished energy goods prices, which fell 5.8 percent in July and 2.5 percent in June. In addition, the index for finished consumer foods turned down 0.6 percent, following a slight increase in June. By contrast, the index for consumer goods other than foods and energy edged up 0.1 percent in July, after showing no change a month earlier. The capital equipment index rose 0.2 percent, slightly more than June's increase of 0.1 percent.

Before seasonal adjustment, the Producer Price Index for Finished Goods fell 1.0 percent in July to stand at 140.7 (1982=100). From July 2000 to July 2001, prices for finished goods advanced 1.5 percent. During the same period, the index for finished goods other than foods and energy rose 1.6 percent, prices for finished consumer foods increased 2.7 percent, and the finished energy goods index decreased 0.3 percent. At the earlier stages of processing, prices received by manufacturers of intermediate goods showed no change for the 12 months ended in July, and the index for crude goods declined 5.4 percent.

Finished goods

The finished energy goods index fell 5.8 percent in July, after posting a 2.5-percent decrease in June. A 17.7-percent drop in July prices for gasoline was the biggest one-month rate of decrease in 15 years and followed a 3.7-percent decline in June. Prices for liquefied petroleum gas and home heating oil also fell more in July than they did in the previous month. (See "One-Month Lag in Producer Price Indexes for Liquefied Petroleum Gas Removed.") The index for diesel fuel turned down, after rising a month earlier. By contrast, prices for residential electric power turned up 2.2 percent in July, following a 1.5-percent decline in June. The index for residential natural gas fell at a slower rate than a month ago.

Prices for finished consumer foods posted a 0.6-percent decline, after edging up 0.1 percent in June. Prices for fresh fruits and melons decreased 13.6 percent, following a 1.7-percent drop a month ago. The indexes for beef and veal, dairy products, processed young chickens, and soft drinks turned down in July, after rising in the prior month. Fresh and dry vegetable prices fell more than they did a month earlier. On the other hand, the pork index advanced 5.4 percent in July, following a 1.0- percent decline in June. Prices for finfish and shellfish, eggs for fresh use, and roasted coffee also turned up, after falling in the previous month. The index for processed fruits and vegetables increased more than it did in June.

The index for finished consumer goods other than foods and energy inched up 0.1 percent in July, following no change in June. Rising prices for light motor trucks, book publishing, passenger car radial tires, women's apparel, and pharmaceutical preparations slightly outweighed falling prices for passenger cars, sanitary papers and health products, household appliances, cosmetics, and cigarettes.

The capital equipment index increased 0.2 percent in July, after edging up 0.1 percent in June. A 2.3-percent rise in light motor truck prices led the advance in the capital equipment index. Prices for civilian aircraft, heavy motor trucks, commercial furniture, ships, and construction machinery also rose in July. By contrast, the indexes for metal cutting machine tools, communication and related equipment, passenger cars, x-ray and electromedical equipment, industrial material handling equipment, and electronic computers fell in July.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components dropped 1.0 percent in July, after registering a 0.1-percent decline in June. Prices for intermediate energy goods, nondurable manufacturing materials, and durable manufacturing materials fell more than they did a month prior. The index for materials and components for construction turned down, after rising in June. Prices for intermediate foods and feeds rose less than they did in the previous month. The July index for intermediate materials less foods and energy decreased 0.4 percent, slightly more than the 0.3-percent decrease posted in June. (See table B.)

The index for intermediate energy goods fell 3.8 percent in July, following a 0.1-percent decrease in June. Prices for gasoline dropped 17.7 percent, after declining 3.7 percent a month earlier. The indexes for diesel fuel, commercial electric power, and jet fuels turned down in July, after posting gains in June. Prices for coke oven products showed no change in July, compared with a 0.7-percent increase in the prior month. On the other hand, the index for industrial electric power rose 3.9 percent in July, following a 1.7-percent increase in June. Residual fuel prices turned up in July. The indexes for industrial natural gas, commercial natural gas, and natural gas to electric utilities fell less than they did in June.

Prices for materials and components for construction decreased 0.5 percent in July, after posting a 0.1-percent gain in the previous month. The index for softwood lumber fell 5.7 percent, following a 0.6 percent rise in June. Prices for plywood, millwork, plastic construction products, plumbing fixtures and brass fittings, and gypsum products also turned down in June. By contrast, the index for fabricated structural metal products increased 0.1 percent in July, after showing no change a month earlier. Prices for asphalt felts and coating rose more than they did in the prior month. The index for fabricated ferrous wire products fell less in July than it did in June. Prices for cement turned up, following a decline in the previous month.

The index for nondurable manufacturing materials decreased 1.1 percent in July, following a 0.6-percent decline in the previous month. Prices for basic organic chemicals dropped 3.2 percent, after falling 1.0 percent in June. The indexes for gray fabrics, phosphates, finished fabrics, and paint materials turned down, after rising a month ago. Prices for plastic resins and materials fell more than they did in June. On the other hand, the index for paperboard posted a 0.1-percent gain, following a 0.7-percent decrease in the prior month. Prices for nitrogenates and woodpulp fell less in July than they did in June. The indexes for basic inorganic chemicals, medicinal and botanical chemicals, and synthetic fibers turned up in July.

Prices for durable manufacturing materials decreased 0.9 percent, after falling 0.4 percent a month ago. The plywood index dropped 5.9 percent in July, following a 0.5-percent rise in June. Prices for aluminum extrusion billet, hot rolled sheet and strip, and for building paper and board fell more than they did in the previous month. The indexes for copper and brass mill shapes, semi-finished steel mill products, prepared paint, silver, and gold turned down, after showing gains in June. By contrast, prices for hot rolled bars, plates, and structural shapes posted a 1.5-percent rise in July, following a 0.5-percent decline in the prior month. The indexes for aluminum mill shapes and cement turned up, after falling in June. Prices for cold rolled sheet and strip, primary aluminum (except extrusion billet), and cold finished bars fell less than they did a month ago.

The index for intermediate foods and feeds increased 0.6 percent in July, following a 1.3 percent rise in June. Prices for prepared animal feeds posted a 0.7-percent gain, following a 1.7-percent increase in the previous month. The indexes for beef and veal, flour, refined sugar, and dry milk products turned down, after rising in June. After increasing in June, prices for fluid milk products showed no change in July. The index for natural, processed, and imitation cheese rose less than it did a month ago. On the other hand, pork prices posted a 5.4-percent increase in July, following a 1.0-percent decline in June. The index for confectionery materials fell less than it did in the prior month. Prices for liquid beverage bases (used for soft drinks) showed no change, after declining in June. The index for snack chips rose more in July than it did a month ago. Prices for liquid milk products increased, after showing no change in June.

Crude goods

The Producer Price Index for Crude Materials for Further Processing declined 5.3 percent in July, following a 6.0-percent drop in June. Prices for crude energy materials fell less than they did in the previous month, while the index for crude foodstuffs and feedstuffs turned up, after edging down in June. On the other hand, basic industrial material prices declined at a faster rate in July than in June. (See table B.)

The crude energy materials index fell 11.5 percent in July, a slightly slower rate of decrease than the 11.9-percent rate registered in June. A 19.0-percent drop in natural gas prices led the July decline in crude energy material prices. Crude petroleum prices decreased 5.1 percent, following a June rise. By contrast, the coal index advanced 4.7 percent in July, after declining 6.6 percent in the prior month.

Prices for crude foodstuffs and feedstuffs increased 0.6 percent in July, after edging down 0.1 percent in June. Accounting for most of this acceleration, corn prices jumped 16.2 percent, after posting a 2.0-percent gain in the previous month. The indexes for slaughter hogs and soybeans also rose more than they did a month earlier. Prices for alfalfa hay, unprocessed finfish, unprocessed shellfish, and raw cane sugar turned up in July. Conversely, the fluid milk index fell 3.4 percent, following a 3.4- percent increase in June. Prices for slaughter cattle, slaughter broilers and fryers, fresh fruits and melons, fresh and dry vegetables, and wheat declined more in July than they did in the prior month.

The index for crude nonfood materials less energy fell 0.9 percent in July, after edging down 0.2 percent in June. A majority of July's faster rate of decline can be traced to a 6.1-percent decrease in aluminum base scrap prices, which followed a 0.6-percent fall in the previous month. Also contributing to this deceleration, the indexes for softwood logs, bolts, and timber; pulpwood; and phosphates turned down in July. Prices for copper base scrap declined more in July than they did a month earlier. By contrast, the index for iron and steel scrap advanced 3.9 percent in July, after falling 0.4 percent in June. Prices for raw cotton and wastepaper turned up in July. The gold ores index fell at a slower rate than it did in June.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries fell 10.5 percent in July, following a 9.4-percent decrease in June. (Net output price indexes are not seasonally adjusted.) Most of July's faster rate of decline can be traced to a 14.4-percent drop in prices received by the crude petroleum, natural gas, and natural gas liquids industry, compared with an 11.7-percent decline in the prior month. Also contributing to the deceleration in mining industry prices, the industry group index for mining and quarrying of non-metallic minerals turned down, after rising in June. Prices received by the metal mining industry group fell more in July than they did a month earlier. By contrast, the index for the bituminous coal and lignite industry advanced 3.7 percent in July, following a 5.0-percent decrease in the previous month. In July, the Producer Price Index for the Net Output of Total Mining Industries stood at 103.4 (December 1984 = 100), 12.4 percent below its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries dropped 1.0 percent in July, after declining 0.2 percent in June. Leading the way, prices received by the petroleum refining and related products industry group fell 11.2 percent, following a 3.3-percent decrease in the prior month. The indexes for the chemicals and allied products, electrical and electronic machinery and equipment, and paper and allied products industry groups also declined more in July than they did a month earlier. Prices received by the food and kindred products industry group increased less in July than they did in June. The indexes for lumber and wood products (except furniture), measuring and controlling instruments, and tobacco manufactures industry groups turned down in July. Prices received by the machinery (except electrical) industry group showed no change, after rising slightly in June. On the other hand, the index for the transportation equipment industry group edged up 0.1 percent in July, following a 0.2-percent decrease in the previous month. July prices received by the industry groups for printing and publishing, apparel, rubber and miscellaneous plastic products, and non-metallic mineral products also turned up. In July, the Producer Price Index for the Net Output of Total Manufacturing Industries stood at 134.6 (December 1984 = 100), 0.5 percent above its year-ago level.

Services. Among service industries in July, advancing prices were registered by offices of physicians, the property and casualty insurance industry, the legal services industry, the United States Postal Service, general medical and surgical hospitals, skilled and intermediate care facilities, the scheduled air transportation industry, hotels and motels, the deep sea foreign transportation of freight industry, truck rental and leasing, and life insurance carriers. Conversely, the industries for telephone communications (except radiotelephone), travel agencies, airports and flying fields, help supply services, and wireless telecommunications experienced falling prices in July.

Resampling of Industries

Effective with this release, the Producer Price Index (PPI) includes data for 25 resampled industries. The Bureau of Labor Statistics periodically updates the sample of producers providing data for the PPI to reflect current conditions more accurately when the structure, membership, technology, or product mix of an industry shifts significantly. The first results of this systematic process were published in July 1986. Subsequent efforts have been completed at 6-month intervals. For information on specific index additions, deletions, and recodes that are effective this month, see the July 2001 issue of the PPI Detailed Report or contact the Section of Index Analysis and Public Information at ppi-info@BLS.gov or (202) 691-7705.

Standard Industrial Classification (SIC) Code Industry

1021 Copper ores 2011 Meat packing plants 2257 Circular knit fabric mills 2258 Lace and warp knit fabric mills 2599 Furniture and fixtures, not elsewhere classified 2771 Greeting card publishing 2819 Industrial inorganic chemicals, not elsewhere classified 2834 Pharmaceutical preparations 2865 Cyclic (coal tar) crudes and intermediates, organic dyes and pigments 2869 Industrial organic chemicals, not elsewhere classified 3313 Electrometallurgical products 3331 Primary copper 3495 Wire springs 3535 Conveyors and conveying equipment 3555 Printing trades machinery 3559 Special industry machinery, not elsewhere classified 3572 Computer storage devices 3578 Calculating and accounting machines 3873 Watches, clocks, watchcases, and parts 4212 Local trucking without storage 4213 Trucking, except local 4214 Local trucking with storage 4492 Tugging and towing services 4731 Freight transportation arrangement 7011 Hotels and motels

One-Month Lag in Producer Price Indexes for Liquefied Petroleum Gas Removed

Effective with this release, the 1-month lag in the Producer Price Index (PPI) for Liquefied Petroleum Gas, commodity code 05-32, has been 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 utilized the natural gas liquids price data published by the Oil Price Information Service (OPIS) to estimate the PPI. These data are 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 released on August 10 reflects the prices for this commodity as of July 2001. Indexes prior to July 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 represents a 2-month (May to July) price movement.

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 March 2001 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. Table 2. Producer price indexes and percent changes for selected commodity groupings by stage of processing (1982=100 unless otherwise indicated)

See footnotes at end of table.

1/ The indexes for March 2001 have been recalculated to incorporate 2/ Not seasonally adjusted. late reports and corrections by respondents. All indexes are subject 3/ Not available. to revision 4 months after original publication. Table 3. Producer price indexes for selected commodity groupings (1982=100 unless otherwise indicated)

1/ Data for March 2001 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.

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 March 2001 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 March 2001 have been recalculated to incorporate late reports and corrections by respondents. 2/ Includes crude petroleum. 3/ Excludes crude petroleum.