June 2002 Producer Price Index

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The Producer Price Index for Finished Goods edged up 0.1 percent in June, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This slight increase followed decreases of 0.4 percent in May and 0.2 percent in April. At the earlier stages of processing, the intermediate goods index moved up 0.2 percent, following a 0.5-percent decline in May. Prices for crude goods turned down 3.6 percent in June, after increasing 1.7 percent in the previous month. (See table A.)

Among finished goods, prices for finished goods other than foods and energy rose 0.2 percent in June, after showing no change in the prior month. The finished consumer foods index increased 0.1 percent, following a 0.2-percent decline in May. The index for finished energy goods showed no change, compared with a 2.3-percent decline in the previous month.

During the first 6 months of 2002, the finished goods price index advanced at a 1.5-percent seasonally adjusted annual rate (SAAR), after falling at a 5.4-percent rate in the latter half of 2001. In the first half of this year, finished energy goods prices increased at a 12.1-percent SAAR, compared with a 31.2-percent rate of decline for the last 6 months of 2001. By contrast, the finished consumer foods index decreased at a 1.8- percent SAAR from December 2001 to June 2002, following a 1.3-percent rate of decrease during the previous 6 months. Prices for finished goods other than foods and energy rose at a 0.3-percent SAAR for the first 6 months of this year, the same rate of increase as in the second half of 2001. At the earlier stages of processing, the intermediate goods index increased at a 2.7-percent SAAR from December 2001 to June 2002, after falling at a 7.6- percent rate during the prior 6 months. Crude goods prices advanced at a 22.3-percent SAAR during the first half of 2002, following a 36.2-percent rate of decrease in the final 6 months of 2001. (See summary below).

Crude materials for further processing 15.3 35.5 -32.5 22.3 -37.9 30.6 14.4 Foodstuffs and feedstuffs -.1 7.4 -7.6 -4.1 -35.2 22.6 -24.9 Crude energy materials 36.9 85.6 -52.9 67.5 -51.0 66.2 68.8 Crude nonfood materials less energy 14.0 -5.5 -9.9 19.1 -8.7 1.0 40.5 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 rose 0.3 percent in June to stand at 139.2 (1982=100). From June 2001 to June 2002, prices for finished goods decreased 2.1 percent. During the same period, the index for finished energy goods dropped 12.4 percent and prices for finished consumer foods fell 1.7 percent. On the other hand, the index for finished goods other than foods and energy increased 0.3 percent. Prices received by producers of intermediate goods moved down 2.7 percent for the 12 months ended in June 2002, and the index for crude goods declined 11.8 percent during the same period.

Finished goods

Prices for finished consumer goods other than foods and energy advanced 0.3 percent in June, after showing no change in the prior month. Leading this acceleration, the index for light motor trucks turned up 0.5 percent, following a 0.9-percent decline in May. Prices for cosmetics and other toilet preparations, sanitary papers and health products, household appliances, soaps and synthetic detergents, and floor coverings also rose, after falling in the previous month. The girls', children's, and infants' apparel index increased at a faster pace than it did a month earlier. On the other hand, sporting and athletic goods prices turned down 1.3 percent in June, compared with a 1.6-percent rise in May. The indexes for newspaper circulation and periodical circulation showed no change, after moving up in the previous month. Prices for alcoholic beverages, book publishing, and pharmaceutical preparations rose less than they did a month ago. During the first half of 2002, the index for finished consumer goods other than foods and energy advanced at a 0.6 percent SAAR, the same rate of increase as in the previous 6-month period.

A 0.1-percent increase in the capital equipment index in June 2002 followed a decline of the same magnitude in the prior month. Price increases for light motor trucks, construction machinery, passenger cars, and civilian aircraft slightly outweighed price decreases for electronic computers, metal cutting machine tools, welding machines, and tools and dies. The capital equipment index fell at a SAAR of 0.3 percent from December 2001 to June 2002, after declining at a rate of 0.1 percent in the second half of 2001.

Finished consumer foods prices inched up 0.1 percent in June, after declining 0.2 percent in the prior month. The pork index turned up 1.1 percent, following a 7.5-percent drop in May. Prices for beef and veal also increased, after falling in the previous month. The indexes for fresh and dry vegetables, eggs for fresh use, soft drinks, and confectionery end products advanced at a faster rate than they did a month earlier. By contrast, fresh fruit and melon prices decreased 12.0 percent in June, compared with a 21.2-percent jump in the prior month. The indexes for finfish and shellfish, processed young chickens, processed fruits and vegetables, and processed turkeys also turned down, after increasing in May. Dairy products prices fell at a faster pace than they did in the previous month.

Finished energy goods prices showed no change in June, after falling 2.3 percent in the previous month. The gasoline index rose 1.0 percent, following a 9.6-percent drop in May. Prices for residential electric power, residential natural gas, and diesel fuel also turned up in June. By contrast, the index for liquefied petroleum gas dropped 10.2 percent in June, following a 0.4-percent decline in the prior month. Home heating oil prices also fell at a faster rate then they did in May. The index for lubricating and similar oils increased less than it did in the previous month.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components moved up 0.2 percent in June, after posting a 0.5-percent decline in May. The largest contributor to this acceleration was the index for intermediate energy goods, which rose after falling in May. Prices for nondurable manufacturing materials and intermediate foods and feeds also turned up this month. The durable manufacturing materials index advanced at a faster rate in June than in the previous month, while the index for materials and components for construction increased at the same rate in June as in May. Excluding foods and energy, the index for intermediate goods rose 0.2 percent in June, after showing no change in May. (See table B.)

The index for intermediate energy goods rose 0.5 percent in June, following a 3.2-percent drop in the preceding month. Prices for gasoline turned up 1.0 percent in June, after posting a 9.6-percent decline in May. The indexes for commercial electric power, natural gas to electric utilities, and diesel fuel also turned up in June. On the other hand, prices for liquefied petroleum gas dropped 10.2 percent in June, compared with a 0.4-percent decrease in the prior month. The indexes for jet fuels and industrial natural gas fell, after rising in the previous month. The index for intermediate energy goods rose at a 10.8-percent SAAR during the first half of 2002, compared with a 28.7-percent rate of decline during the second half of 2001.

The nondurable manufacturing materials index moved up 0.4 percent in June, following a 0.2-percent fall in May. Prices for paint materials rose 4.6 percent, after declining 3.2 percent in the prior month. The index for inedible fats and oils also increased in June, following a decline in May. June prices for industrial chemicals and paper declined at a slower pace than they did in the previous month. The indexes for processed yarns and threads and woodpulp rose more in June than in May. By contrast, the index for plastic resins and materials increased 1.5 percent in June, after rising 3.6 percent in May. Prices for synthetic fibers, medicinal and botanical chemicals, and gray fabrics turned down in June. The index for materials for nondurable manufacturing advanced at a 3.7-percent SAAR from December 2001 to June 2002, after posting a 9.8-percent rate of decline from June 2001 to December 2001.

Following a 0.8-percent decline in May, prices for intermediate foods and feeds moved up 0.7 percent in June. Leading the upturn, the index for beef and veal rose 1.5 percent in June, after dropping 3.0 percent in the preceding month. The indexes for pork, prepared animal feeds, refined sugar, and confectionery materials all turned up in June. Crude vegetable oil prices advanced at a faster rate in June than they did in May. On the other hand, flour prices moved up 1.2 percent in June, after posting a 2.0- percent increase a month earlier. The liquid milk products index turned down in June, while prices for soft-drink beverage bases and for natural, processed, and imitation cheese fell at faster rates in June than they did in the prior month. Prices for intermediate foods and feeds declined at a 1.0-percent SAAR during the December 2001 to June 2002 period, following a 3.1-percent rate of decline over the prior 6-month period.

Prices for durable manufacturing materials rose 0.6 percent in June, compared with a 0.5-percent advance in the previous month. Leading the advance in June, the index for steel mill products moved up 2.6 percent (the largest monthly increase since a 2.9-percent rise in October 1987). Advancing prices were also registered by the indexes for copper and brass mill shapes, copper cathode and refined copper, primary aluminum (except extrusion billet), prepared paint, and aluminum mill shapes. Alternatively, prices for building paper and board, hardwood lumber, and zinc posted declining prices in June. From December 2001 to June 2002, prices for materials for durable manufacturing advanced at a 4.0-percent SAAR, following a 5.9-percent rate of decrease during the June 2001 to December 2001 period.

The index for materials and components for construction rose 0.1 percent in June, the same rate of change as in the previous month. The indexes for plastic construction products, asphalt felts and coatings, fabricated structural metal products, wiring devices, and nonferrous wire and cable posted advancing prices in June. Declining prices were posted by the indexes for softwood lumber, plumbing fixtures and brass fittings, and hardwood lumber. After a 2.0-percent SAAR of decline during the latter half of 2001, the index for materials and components for construction increased at a 1.5-percent rate during the first half of 2002.

Crude goods

The Producer Price Index for Crude Materials for Further Processing fell 3.6 percent, seasonally adjusted, following a 1.7-percent rise in May. Prices for crude energy materials and for crude foodstuffs and feedstuffs turned down in June, after increasing in the previous month. The index for basic industrial materials advanced at a slower rate in June than a month earlier. (See table B.)

Prices for crude energy materials decreased 8.9 percent in June, following a 2.2-percent gain in May. The largest contributor to this downturn was the crude petroleum index, which dropped 19.5 percent, after rising 10.9 percent in May. Natural gas prices declined 3.5 percent, following a 2.5-percent decrease in the prior month. By contrast, the coal index showed no change in June, after falling 0.8 percent a month ago. Prices for crude energy materials rose at a 67.5-percent SAAR from December 2001 to June 2002, after declining at a 57.9-percent rate in the previous 6- month period.

The index for crude foodstuffs and feedstuffs fell 0.9 percent, after posting a 0.4-percent increase in May. Prices for fresh fruits and melons decreased 12.0 percent, following a 21.2-percent advance in the previous month. The indexes for corn, alfalfa hay, and slaughter turkeys also turned down, after rising in May. June prices for slaughter cattle and fluid milk fell at a faster rate, compared with a month earlier. On the other hand, the index for slaughter broilers and fryers rose 5.8 percent, subsequent to a 0.8-percent gain in the prior month. Prices for fresh vegetables, except potatoes, also rose more in June than they did in May. The indexes for wheat and Irish potatoes for processing turned up, following declines in the previous month. During the first half of 2002, the crude foodstuffs and feedstuffs index fell at a SAAR of 4.1 percent, after dropping at an 18.0-percent rate in the last half of 2001.

Prices for basic industrial materials increased 1.6 percent in June, following a 3.4-percent rise in May. In June, the iron and steel scrap index moved up 1.8 percent, after advancing 9.2 percent a month ago. Rising prices for nonferrous metal ores and for hides and skins also decelerated in June. The index for construction sand, gravel, and crushed stone registered no change, after advancing in the previous month. By contrast, raw cotton prices jumped 11.9 percent, following a 4.3-percent decline in May. The indexes for wastepaper, aluminum base scrap, and copper base scrap rose more in June than they did a month earlier. Iron ore prices edged up, after falling in May. The index for basic industrial materials advanced at a 19.1-percent SAAR from December 2001 to June 2002, after falling at a 5.6-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 fell 7.0 percent in June, after posting a 1.8-percent increase in May. (Net output price indexes are not seasonally adjusted.) Leading this downturn, June prices received by the oil and gas extraction industry group dropped 9.8 percent, following a 2.4-percent rise a month earlier. The index for the metal mining industry group rose 0.7 percent in June -- a slower rate of advance than the 2.1-percent gain observed in May. Prices received by the industry group for mining and quarrying of nonmetallic minerals (except fuels) edged up 0.1 percent in June, compared with a 0.4-percent advance in the previous month. The index for the coal mining industry group inched down 0.1 percent, after showing no change in May. During the first half of 2002, prices received by the mining industry sector jumped at an annual rate of 48.6 percent, compared with a 52.2- percent annual rate of decline for the second half of 2001. In June 2002, the Producer Price Index for Total Mining Industries stood at 94.6 (December 1984 = 100), 15.7 percent below its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Domestic Manufacturing Industries was unchanged in June, after edging down 0.1 percent in May. In June, higher prices received by the industry groups for food and kindred products, chemicals and allied products, printing and publishing, primary metals, rubber and plastic products, and measuring and controlling instruments were offset by lower prices received by the industry groups for electrical and electronic machinery and equipment, petroleum refining and related products, lumber and wood products (except furniture), transportation equipment, and machinery (except electrical). From December 2001 to June 2002, the index for the overall manufacturing sector increased at a 3.1-percent annual rate, following a 6.1-percent annual rate of decline from June 2001 to December 2001. In June, the Producer Price Index for Total Manufacturing Industries stood at 133.6 (December 1984 = 100), 1.6 percent lower than a year ago.

Services. Among service industries in June, advancing prices were registered by the industries for help supply services, wireless telecommunications, deep sea foreign transportation of freight, operators and lessors of nonresidential buildings, passenger car rental, truck rental and leasing, data processing services, and specialty hospitals (except psychiatric). On the other hand, falling prices were posted by the industries for radio broadcasting, cable and other pay television services, air courier services, medical laboratories, and telephone communications (except radiotelephone).