May 2002 Producer Price Index

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The Producer Price Index for Finished Goods fell 0.4 percent in May, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decrease followed a 0.2-percent decline in April and a 1.0-percent gain in March. Prices for finished goods other than foods and energy showed no change in May, after edging up 0.1 percent in each of the two prior months. At the earlier stages of processing, the intermediate goods index fell 0.5 percent, following a 0.9-percent rise in the prior month. Price increases for crude goods slowed to a 1.7-percent rate in May from a 5.5-percent rate in April. (See table A.)

May's faster rate of decline in the index for finished goods was led by a 2.3-percent decline in prices for finished energy goods. This decrease followed a 2.5-percent rise in April. The index for finished consumer goods other than foods and energy posted no change, after rising 0.3 percent in the previous month. By contrast, the index for finished consumer foods edged down 0.2 percent in May, following a 3.2-percent drop in April. Capital equipment prices fell 0.1 percent for the second consecutive month.

Before seasonal adjustment, the Producer Price Index for Finished Goods inched down 0.1 percent to stand at 138.8 (1982=100). From May 2001 to May 2002, prices for finished goods declined 2.7 percent. Over the same period, the index for finished energy goods moved down 15.0 percent, the finished consumer foods index fell 2.0 percent, and prices for finished goods other than foods and energy edged up 0.1 percent. Prices received by producers of intermediate goods declined 3.1 percent for the 12 months ended May 2002, and the index for crude goods decreased 15.8 percent during the same period.

Finished goods

The index for finished energy goods fell 2.3 percent in May, after posting a 2.5-percent gain in April. Prices for gasoline dropped 9.6 percent, compared with a 4.2-percent gain in the prior month. Prices for residential natural gas, liquefied petroleum gas, home heating oil, and diesel fuel also turned down, after rising in the previous month.

The index for finished consumer goods other than foods and energy showed no change in May, after posting a 0.3-percent gain in April. Prices were unchanged for cigarettes, following a 4.4-percent advance in the prior month. The May indexes for sanitary papers and health products, mobile homes, and lawn and garden equipment (except tractors) turned down, after increasing a month earlier. Prices for cosmetics and other toilet preparations moved down, following no change in April. By contrast, the index for men's and boys' apparel rose 0.3 percent in May, subsequent to a 1.4-percent decline in the preceding month. Prices for light motor trucks and women's apparel fell less in May than they did in April. The passenger car index increased, after showing no change in April.

The finished consumer foods index decreased 0.2 percent in May, after a 3.2-percent decline in April. Declining prices for pork, beef and veal, dairy products, bakery products, and milled rice outweighed price increases for fresh fruits and melons, processed young chickens, finfish and shellfish, eggs for fresh use, and fresh and dry vegetables.

Capital equipment prices declined 0.1 percent in May, the same rate of decrease as in April. Falling prices for light motor trucks, industrial material handling equipment, civilian aircraft, metal cutting machine tools, and integrating and measuring instruments slightly outweighed price increases for passenger cars, commercial furniture, x-ray and electromedical equipment, construction machinery and equipment, and printing trades machinery.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components declined 0.5 percent in May, seasonally adjusted, compared with a 0.9-percent jump in April. Most of this downturn can be linked to prices for intermediate energy goods, which fell in May following an increase in the preceding month. The index for materials for nondurable manufacturing also turned down in May. Prices for construction materials and components rose less than they did in the prior month. The index for intermediate foods and feeds fell more in May than it did in April. On the other hand, prices for durable manufacturing materials advanced, after showing no change in the prior month. The index for intermediate materials less foods and energy was unchanged in May, following a 0.2-percent increase a month earlier. (See table B.)

Subsequent to a 4.4-percent advance in April, the May index for intermediate energy goods declined 3.2 percent. Prices for natural gas to electric utilities fell 8.1 percent, after surging 30.9 percent in April. The indexes for gasoline, diesel fuel, commercial electric power, industrial electric power, and liquefied petroleum gas also turned down in May. Prices for industrial natural gas, commercial natural gas, jet fuels, and residual fuels rose less in May than they did in the preceding month.

The index for materials for nondurable manufacturing decreased 0.2 percent in May, compared with a 1.3-percent April increase. Prices for basic organic chemicals fell 2.2 percent, following a 3.6-percent rise in the prior month. The indexes for paint materials and for inedible fats and oils also turned down in May. Gray fabric prices advanced less in May, while the indexes for paper, paperboard, and for alkalies and chlorine declined more than they did in April. By contrast, fertilizer material prices increased 2.7 percent, after a 0.8-percent decrease in the previous month. The woodpulp index also turned up in May. Prices for basic inorganic chemicals fell less in May than they did in April, and the plastic resins and materials index rose more in May than it did a month earlier.

The index for materials and components for construction edged up 0.1 percent in May, following a 0.3-percent advance in the preceding month. In May, rising prices for plastic construction products, gypsum products, fabricated structural metal products, fabricated ferrous wire products, plumbing fixtures and brass fittings, and hardwood lumber slightly outweighed declining prices for plywood, softwood lumber, nonferrous wire and cable, asphalt felts and coatings, and millwork.

The index for intermediate foods and feeds decreased at essentially the same rate as in the prior month -- down 0.8 percent in May, after a 0.7- percent decline in April. Prices for pork; beef and veal; prepared animal feeds; natural, processed, and imitation cheese; sausage and deli meats; refined sugar; and fluid milk products fell in May. Partly offsetting these falling prices, the indexes for flour and crude vegetable oils increased in May.

Prices for durable manufacturing materials advanced 0.5 percent in May, after showing no change in April. The May index for aluminum mill shapes increased 0.2 percent, following a 2.3-percent decline, and prices for hot rolled steel sheet and strip jumped 4.1 percent, after a 0.8- percent rise in the prior month. The index for cold rolled steel sheet and strip also advanced at a quicker pace in May than it did in April. Prices for primary aluminum (except extrusion billet) turned up in May, while the index for hot rolled steel bars, plates, and structural shapes decreased at a slower rate than it did a month earlier. By contrast, prepared paint prices fell 1.1 percent in May, following a 0.7-percent increase in April. The indexes for semi-finished steel mill products and cold finished steel bars also turned down in May. Prices for plywood and for building paper and board declined at a faster rate in May than they did in April.

Crude goods

The Producer Price Index for Crude Materials for Further Processing advanced 1.7 percent in May, seasonally adjusted, following a 5.5-percent increase in April. Prices for crude energy materials and basic industrial materials also rose at a slower rate than they did in the previous month. By contrast, the index for crude foodstuffs and feedstuffs turned up, after falling in April. (See table B.)

Prices for crude energy materials rose 2.2 percent in May, following a 22.4-percent jump in the prior month. Natural gas prices declined 2.5 percent, following a 39.5-percent increase in the previous month. The index for crude petroleum moved up 10.9 percent, after posting a 15.2- percent gain in April. On the other hand, the coal index decreased 0.8 percent in May, after falling 1.0 percent in the prior month.

Following a 3.6-percent increase in April, the crude nonfood materials less energy index moved up 3.4 percent in May. Aluminum base scrap prices rose 0.9 percent, compared with a 4.9-percent gain in the previous month. The indexes for iron and steel scrap; copper base scrap; and softwood logs, bolts, and timber also advanced at a slower rate than they did in April. Raw cotton prices fell more in May than they did in the preceding month. The indexes for iron ore and hardwood logs, bolts, and timber turned down, after rising in April. Alternatively, the rate of increase in wastepaper prices rose from 5.8 percent in April to 12.0 percent in May. The indexes for hides and skins; construction sand, gravel, and crushed stone; and gold ores also increased at a faster pace than they did in the previous month. Copper ores prices turned up, after declining in the prior month.

The index for crude foodstuffs and feedstuffs advanced 0.4 percent in May, following a 6.4-percent decline in the previous month. Leading this acceleration, slaughter hog prices turned up 2.5 percent, after dropping 23.1 percent in April. The index for slaughter cattle fell less than it did in April. Prices for fresh vegetables (except potatoes), slaughter broilers and fryers, fresh fruits and melons, and slaughter turkeys rose, following decreases in April. The corn index moved up more rapidly in May than it did in the prior month. Partially counteracting the acceleration in crude foodstuffs and feedstuffs prices, the index for alfalfa hay increased 1.9 percent in May, after moving up 7.2 percent a month earlier. Unprocessed finfish prices rose less than they did in April. The Irish potatoes for processing index fell at a faster rate than it did in the previous month.

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

Mining. The Producer Price Index for the Net Output of Total Domestic Mining Industries advanced 1.8 percent in May, after moving up 16.2 percent in April. (Net output price indexes are not seasonally adjusted.) Fundamental to this deceleration, the industry index for crude petroleum, natural gas, and natural gas liquids advanced 2.7 percent in May, after registering a 26.5-percent gain in the previous month. The industry index for oil and gas well drilling fell faster in May than a month earlier, while coal mining service prices turned down in May. By contrast, the industry index for bituminous coal and lignite surface mining dropped 0.8 percent in May, after falling 2.2 percent in April. Prices for the bituminous coal underground mining industry and the copper ores industry turned up, following decreases in the prior month. In May, the Producer Price Index for Total Mining Industries stood at 101.7 (December 1984=100), 20.6 percent below its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Domestic Manufacturing Industries fell 0.1 percent in May, after registering a 0.7-percent advance in the preceding month. The industry group index for petroleum refining and related products dropped 0.8 percent, following a 12.6-percent gain in April. Prices for the tobacco manufactures industry group remained unchanged, after moving up in April, while the industry group indexes for paper and allied products and for lumber and wood products (except furniture) turned down in May. Prices for the chemicals and allied products industry group rose at a slower rate in May than they did a month earlier. On the other hand, the industry group index for printing, publishing, and allied industries advanced 0.2 percent in May, after posting a 0.1-percent decline in the previous month. Prices for the measuring and controlling instruments industry group turned up in May. Industry group prices for rubber and miscellaneous plastic products rose in May, after posting no change a month earlier. In May, the Producer Price Index for Total Manufacturing Industries stood at 133.6 (December 1984=100), 2.1 percent lower than a year ago.

Services. Among service industries in May, advancing prices were registered by the industries for deep sea foreign transportation of freight, wireless telecommunications, prepackaged software, cable and other pay television services, radio broadcasting, and telephone communications (except radiotelephone). Alternatively, falling prices were posted by the industries for help supply services, scheduled air transportation, data processing services, and engineering design, analysis, and consulting services.