November 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 decreased 0.6 percent in November, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decline followed a 1.6-percent drop in October and a 0.4-percent gain in September. November prices for finished goods other than foods and energy rose 0.2 percent, after posting a 0.5-percent decrease in October. At the earlier stages of processing, prices received by intermediate goods manufacturers fell 0.5 percent, following a 1.5-percent decline in the previous month. The crude goods index advanced 7.3 percent in November, after dropping 9.1 percent a month earlier. (See table A.)

Among finished goods in November, the index for finished energy goods fell 3.8 percent, following a 7.7-percent decrease in October. Also contributing to the slower rate of decline in finished goods prices, the index for finished consumer goods other than foods and energy increased 0.3 percent in November, following a 0.4-percent decrease in the prior month, and capital equipment prices edged up 0.1 percent, after registering a 0.7- percent drop a month earlier. On the other hand, the index for finished consumer foods fell at a 0.8-percent pace in November, following a 0.4- percent rate of decline in October.

For the first 11 months of 2001, the Producer Price Index for Finished Goods decreased at a 1.3-percent seasonally adjusted annual rate (SAAR), after rising 3.6 percent in 2000. Prices for finished goods other than foods and energy advanced at a 1.0-percent SAAR for the first 11 months of 2001, after posting a 1.3-percent gain for the previous calendar year. The index for intermediate goods fell at a 3.4-percent SAAR from December 2000 to November 2001, following a 4.1-percent increase during 2000. Prices for crude goods declined at a 27.2-percent SAAR during the first 11 months of 2001, after posting a 35.5-percent gain for the prior calendar year.

Before seasonal adjustment, the Producer Price Index for Finished Goods dropped 0.9 percent, to stand at 138.4 (1982=100). From November 2000 to November 2001, finished goods prices decreased 1.1 percent. During the same period, the index for finished energy goods fell 13.5 percent. By contrast, prices for finished goods other than foods and energy rose 0.9 percent for the 12 months ended November 2001, and the index for finished consumer foods gained 1.7 percent. At the earlier stages of processing, prices received by producers of intermediate goods declined at a 2.9- percent rate over the previous 12 months, and the crude goods index dropped 18.4 percent for the same period.

Finished goods

Price declines for finished energy goods slowed to 3.8 percent in November, after falling at a 7.7-percent pace a month earlier. The index for gasoline decreased 10.3 percent, following a 21.2-percent drop in October. Prices for residential natural gas, home heating oil, diesel fuel, and liquefied petroleum gas also declined less than they did in the prior month. By contrast, the index for residential electric power moved down 0.3 percent in November, following a 0.5-percent gain in October. Finished lubricant prices turned down, after showing no change in the previous month.

The index for finished consumer goods other than foods and energy advanced 0.3 percent in November, following a 0.4-percent decrease in October. Passenger car prices increased 0.9 percent, after registering a 4.7-percent drop a month earlier. The November index for cigarettes rose 1.9 percent, after showing no change in the previous month. Prices for light motor trucks fell less than they did in October, while the textile housefurnishings index increased more than it did in the prior month. Prices for women's apparel turned up in November. By contrast, the index for newspaper circulation declined 0.2 percent, following a 1.2-percent rise in October. Prices for sporting and athletic goods and for cosmetics and other toilet preparations also turned down in November. The book publishing index decreased more than it did in the previous month.

The capital equipment index edged up 0.1 percent in November, after posting a 0.7-percent decline in October. Passenger car prices rose 0.9 percent, following a 4.7-percent decrease a month earlier. The indexes for communication and related equipment, plastic working machinery, and pumps and compressors also turned up, after falling in the prior month. November prices for light motor trucks declined less than they did in October. The index for x-ray and electromedical equipment showed no change, after decreasing in the previous month. By contrast, November prices for electronic computers moved down 2.2 percent, following a 0.2-percent gain a month earlier. The commercial furniture index also fell, after increasing in October. Civilian aircraft prices edged down slightly more than they did in the prior month.

The index for finished consumer foods declined 0.8 percent in November, following a 0.4-percent decrease in October. Beef and veal prices fell 6.3 percent, after moving down at a 0.6-percent pace in the previous month. The indexes for processed young chickens and eggs for fresh use turned down in November. Dairy product prices fell more than they did in the prior month, while the index for fresh fruits and melons rose less than it did in October. By contrast, prices for fresh and dry vegetables declined 3.2 percent in November, following an 11.4-percent drop a month earlier. The indexes for finfish and shellfish, pork, and soft drinks turned up, after falling in the previous month.

Intermediate goods

The Producer Price Index for Intermediate, Materials, Supplies, and Components decreased 0.5 percent in November, after falling 1.5 percent in October. Prices for intermediate energy goods also declined less than they did in the previous month. The index for materials and components for construction showed no change, following an October decrease. By contrast, prices for intermediate foods and feeds and nondurable manufacturing materials fell at a faster rate in November than they did in October. The index for durable manufacturing materials declined at a 0.6-percent pace for the second consecutive month. Excluding foods and energy, the intermediate materials index decreased 0.2 percent, following a 0.4-percent decline in October. (See table B.)

Prices for intermediate energy goods fell 1.6 percent in November, following a 7.6- percent drop in October. The index for jet fuels decreased 5.0 percent, after falling 21.8 percent in the prior month. Prices for gasoline, diesel fuel, commercial natural gas, liquefied petroleum gas, and natural gas to electric utilities declined at a slower pace in November than they did in October. The indexes for commercial electric power and industrial natural gas turned up, after decreasing in the previous month. On the other hand, prices for industrial electric power advanced 0.5 percent in November, following a 0.7-percent increase in October.

The construction materials index showed no change in November, following a 0.3-percent decrease in October. In November, rising prices for gypsum products, asphalt felts and coatings, plumbing fixtures and brass fittings, heating equipment, and cement were offset by decreasing prices for millwork, plastic construction products, wiring devices, softwood lumber, and nonferrous wire and cable.

The intermediate foods and feeds index decreased 1.5 percent in November, after falling 0.8 percent in October. Prices for beef and veal declined 6.3 percent, following a 0.6-percent decrease in the previous month. The indexes for natural, processed, and imitation cheese and refined sugar also fell more in November than they did a month earlier. Prices for flour increased at a slower rate than they did in October. The index for dry milk products turned down, after rising in the prior month. By contrast, prices for crude vegetable oils rose 4.2 percent in November, following a 9.7-percent drop in October. The indexes for fluid milk products and prepared animal feeds fell less than they did in the previous month. Prices for confectionery materials advanced at a faster rate than they did in October. The index for pork turned up, after falling a month earlier.

The nondurable manufacturing materials index declined 1.0 percent in November, following a 0.9-percent decrease in October. In November, falling prices for primary basic organic chemicals, plastic resins and materials, paper, nitrogenates, paint materials, basic inorganic chemicals, and gray fabrics outweighed rising prices for phosphates and finished fabrics.

For the second consecutive month, the index for durable manufacturing materials fell 0.6 percent. In November, decreasing prices for steel mill products, primary aluminum (except extrusion billet), building paper and board, and aluminum mill shapes outweighed rising prices for copper and brass mill shapes, flat glass, and cement.

Crude goods

The November Producer Price Index for Crude Materials for Further Processing turned up 7.3 percent, following a 9.1-percent decline in October. Prices for crude energy materials also rose in November, after falling in the prior month. The basic industrial materials index decreased at a slower rate than it did a month earlier. Conversely, prices for crude foodstuffs and feedstuffs fell more rapidly than they did in October. (See table B.)

The index for crude energy materials advanced 28.3 percent in November, following a 19.2-percent drop in the prior month. The natural gas index surged a record 80.0 percent, after falling 27.5 percent in October. Crude petroleum prices declined at a 7.4-percent pace, following a 19.6-percent decrease in the preceding month. The coal index rose 4.7 percent in November, after posting a 0.5-percent gain in October.

Falling prices for basic industrial materials slowed in November, declining 0.8 percent, following a 1.7-percent decrease in the prior month. In November, the indexes for iron and steel scrap, nonferrous metal ores, aluminum base scrap, copper base scrap, and softwood logs, bolts, and timber exhibited declines. These decreases more than offset rising prices for raw cotton, leaf tobacco, hides and skins, wastepaper, and phosphates.

Prices for crude foodstuffs and feedstuffs decreased 5.9 percent in November, after falling 2.6 percent in October. The slaughter cattle index dropped 7.1 percent, after declining 3.2 percent a month earlier. Prices for fluid milk and slaughter hogs also fell more in November than they did in October. The indexes for slaughter broilers and fryers and for alfalfa hay turned down, following increases in the preceding month. By contrast, corn prices declined 3.7 percent in November, after registering a 7.8- percent decrease in October. The indexes for soybeans and for fresh and dry vegetables also fell less than they did in the prior month. Prices for unprocessed shellfish turned up, after declining in October. The wheat index increased at a quicker pace in November than it did in the previous month.

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

Mining. For the month of November, the Producer Price Index for the Net Output of Total Mining Industries rose 18.3 percent, after declining 14.9 percent in October. (Net output price indexes are not seasonally adjusted.) The main contributor to this acceleration was the industry index for crude petroleum, natural gas, and natural gas liquids, which bounced back 29.0 percent, following a 21.6-percent drop in the prior month. Prices received by the bituminous coal and lignite industry advanced more in November than they did in the previous month, while the industry indexes for oil and gas field exploration services and crushed and broken limestone rose, after falling in October. Also adding to the overall acceleration, prices received by the construction sand and gravel industry turned up in November, after showing no change in the preceding month. On the other hand, the index for the gold ores industry fell 3.2 percent in November, following a 1.5-percent advance in October. Prices received by the industries for coal mining services; potash, soda, and borate minerals; and crushed and broken granite also declined in November, after increasing in the prior month. The index for the oil and gas well drilling industry fell faster in November than it did in October. In November, the Producer Price Index for the Net Output of Total Domestic Mining Industries stood at 93.2 (December 1984=100), 27.7 percent below its year-ago level.

Manufacturing. Subsequent to a 1.5-percent drop in October, the Producer Price Index for the Net Output of Total Manufacturing Industries fell 0.6 percent in November. Comprising most of this acceleration, the index for the petroleum refining and related products industry group decreased 7.0 percent in November, following an 18.7-percent decline in the previous month. Also contributing to the overall acceleration in manufacturing goods prices, the industry index for tobacco manufactures increased in November, after showing no change in the previous month, and prices received by the lumber and wood products (except furniture) industry group fell less in November than they did in October. Prices received by the measuring and controlling instruments and the machinery (except electrical) industry groups advanced in November, after decreasing in the prior month. By contrast, the transportation equipment industry group index showed no change in November, after rising 0.9 percent in October. Prices received by the food and kindred products and the chemicals and allied products industry groups fell faster in November than they did in the previous month. The industry group index for rubber and miscellaneous plastic products turned down in November, following an increase in October. In November, the Producer Price Index for the Net Output of Total Domestic Manufacturing Industries stood at 132.8 (December 1984=100), 1.6 percent below its year-ago level.

Services. Among service industries in November, advancing prices were registered by the industries for operators and lessors of nonresidential buildings, general medical and surgical hospitals, property and casualty insurance, passenger car rental, home health care services, telephone communications (except radiotelephone), trucking (except local), and freight transportation arrangement. By contrast, falling prices were experienced by the industries for offices of physicians, real estate agents and managers, scheduled air transportation, deep sea foreign transportation of freight, hotels and motels, railroads (line-haul operating), prepackaged software, and cable and other pay television services.

PPI Weights to be Updated

The Bureau of Labor Statistics will soon update the value weights used to calculate Producer Price Indexes to more accurately reflect recent production and marketing patterns. The new weights, which will be introduced in February 2002 with the release of January 2002 index data, will be based on shipment values from the year 1997. These value weights come from the Census of Manufactures, the Census of Mining, the Census of Services, and the Census of Agriculture. PPI weights have been based upon 1992 census shipment values since January 1996.

All indexes will be affected by this weight update, including all the industry net output indexes, as well as those calculated from traditional commodity groupings. In addition, weights will be updated from the 1992 to the 1997 census for all stage-of-processing indexes, net output of industry by stage of process indexes, durability of product indexes, and special commodity-grouping indexes. This weight revision will not change the arithmetic reference base, in most cases 1982=100, of the PPI index system.

Also with the publication of January data on February 15, 2002, SIC- classified indexes will reflect updated input/output (I/O) ratios based on the 1992 Input-Output Account of the U.S. Department of Commerce's Bureau of Economic Analysis (BEA). These I/O ratios, which represent the proportion of each industry's output consumed outside the industry, will be updated from those reflected in BEA's 1987 Input-Output Account. The commodity grouping indexes will not be affected.

It is important to note that the PPI classification system and aggregation structure will not change as a result of the weight revisions discussed above. The weight update, however, will result in significant shifts in the relative importance of various industries and products, and these shifts will impact future aggregate indexes in a manner commensurate with the relative gains and losses in value weights from 1992 to 1997.

Relative importances as of December 2001 on the 1992 and 1997 weighting schemes will be available on February 13, 2002. To request this information call the Division of Industrial Prices and Price Indexes, Section of Index Analysis at (202) 691-7705.