July 2002 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 0.2 percent in July, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decrease followed a 0.1-percent rise in June and a 0.4-percent decline in May. At the earlier stages of processing, the intermediate goods index advanced at a 0.2-percent rate for the second consecutive month, and prices received by crude goods producers moved up 0.6 percent, following a 3.6-percent drop in June. (See table A.)

The index for finished goods other than foods and energy fell 0.3 percent in July, after posting a 0.2-percent increase in the prior month. Excluding passenger cars and light trucks, the index for finished goods would have shown no change and the index for finished goods other than foods and energy would have decreased 0.1 percent in July. Finished consumer food prices edged down 0.1 percent in July, following a 0.1- percent rise a month earlier. By contrast, prices for finished energy goods advanced 0.1 percent in July, after showing no change a month earlier.

Before seasonal adjustment, the Producer Price Index for Finished Goods decreased 0.2 percent to 138.9 (1982=100) in July. From July 2001 to July 2002, prices for finished goods fell 1.1 percent. During the same period, the index for finished energy goods dipped 5.2 percent, prices for finished consumer foods declined 1.3 percent, and the index for finished goods other than foods and energy edged down 0.2 percent. At the earlier stages of processing, prices received by producers of intermediate goods decreased 1.5 percent for the 12 months ended July 2002, and the crude goods index fell 6.2 percent during the same period.

Finished goods

Prices for finished consumer goods other than foods and energy declined 0.4 percent in July, compared with a 0.3-percent advance in June. The light motor trucks index fell 1.6 percent in July, after rising 0.5 percent in June, and passenger car prices decreased 1.5 percent, following a 0.4-percent increase. The July price declines for passenger cars and light motor trucks reflect an increase in incentives. Prices also turned down for cosmetics and other toilet preparations, men's and boys' apparel, household appliances, alcoholic beverages, and girls', children's, and infants' apparel. On the other hand, the index for women's apparel advanced 0.2 percent, after falling at a 0.2-percent rate in June. Prices for floor coverings and household furniture rose at a faster pace in July than they did a month earlier.

The capital equipment index decreased 0.4 percent in July, compared with a 0.1-percent increase in June. Prices for light motor trucks, passenger cars, construction machinery, and commercial furniture decreased, following increases in June. The index for communication and related equipment fell 1.0 percent in July, after showing no change in the preceding month. The index for electronic computers fell at a faster pace in July than it did in June. Conversely, prices for heavy motor trucks rose 0.9 percent in July, after edging up 0.1 percent in the prior month. The indexes for tools, dies, jigs, and industrial molds and for metal cutting machine tools turned up in July.

The index for finished consumer foods edged down 0.1 percent, following a 0.1-percent increase in June. Beef and veal prices fell 1.4 percent in July, after rising 1.5 percent in the preceding month. The indexes for eggs for fresh use and soft drinks also turned down in July. The rate of price increase slowed for both fresh and dry vegetables and confectionery end products, while larger price declines were registered for processed young chickens. On the other hand, the index for fresh fruits and melons decreased 5.6 percent in July, compared with a 12.0-percent drop in June. Dairy product prices also declined at a slower rate in July than in the prior month. The indexes for finfish and shellfish and processed fruits and vegetables rose, after falling in the previous month. Prices for pork increased more in July than they did in June.

The index for finished energy goods increased 0.1 percent in July, after showing no change in the prior month. In July, advancing prices for gasoline, home heating oil, diesel fuel, and finished lubricants slightly outweighed declining prices for residential electric power, residential natural gas, and liquefied petroleum gas.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components rose 0.2 percent in July, the same rate of increase as in June. Rising prices for nondurable manufacturing materials, intermediate foods and feeds, materials and components for construction, and durable manufacturing materials slightly outweighed price declines for intermediate energy goods. The index for intermediate materials other than foods and energy advanced 0.2 percent for the second consecutive month. (See table B.)

Prices for nondurable manufacturing materials moved up 0.7 percent in July, following a 0.4-percent gain in the previous month. Advancing prices were observed for industrial chemicals, plastic resins and materials, paperboard, medicinal and botanical chemicals, and paper. These increases more than offset falling prices for finished fabrics, phosphates, processed yarns and threads, gray fabrics, and fertilizer materials.

The index for intermediate foods and feeds rose 1.5 percent in July, following a 0.7-percent advance in June. Prices for prepared animal feeds posted a 3.5-percent gain, following a 0.7-percent increase in the previous month. The July index for sausage and deli meats turned up, after falling a month earlier. Prices for confectionery materials, pork, and flour rose more in July than they did in June. The index for fluid milk products fell at a slower rate than in the prior month. By contrast, beef and veal prices turned down 1.4 percent in July, following a 1.5-percent rise in June. The indexes for crude vegetable oils and for mayonnaise, salad dressings, and sandwich spreads both increased at a slower pace than they did a month ago. Prices for natural, processed, and imitation cheese decreased more in July than they did in June. The refined sugar index turned down, after rising in the previous month.

Prices for materials and components for construction increased 0.2 percent in July, after inching up 0.1 percent in June. The rising indexes for fabricated structural metal products, softwood lumber, hardwood lumber, nonferrous wire and cable, air conditioning and refrigeration equipment, and plastic construction products more than offset price declines for gypsum products, plywood, millwork, fabricated ferrous wire products, asphalt felts and coatings, and switchgear.

The index for durable manufacturing materials edged up 0.2 percent in July, after advancing 0.6 percent a month earlier. Prices for steel mill products increased 0.9 percent, following a 2.6-percent rise in June. The indexes for primary nonferrous metals, aluminum mill shapes, copper and brass mill shapes, prepared paint, and plywood turned down in July, after increasing in the prior month. Conversely, prices for building paper and board turned up 3.0 percent, compared with a 2.0-percent decline in the previous month. The index for hardwood lumber also rose, after falling in June. Prices for flat glass increased in July, after showing no change in the prior month.

Subsequent to a 0.5-percent gain in June, the intermediate energy goods index fell 1.0 percent in July. Leading this downturn, prices for commercial electric power decreased 2.1 percent, after rising 0.8 percent in the prior month. The indexes for natural gas to electric utilities, commercial natural gas, and residual fuel also turned down, following advances in June. The rate of decline for the industrial natural gas index quickened from June to July. On the other hand, the index for industrial electric power advanced 1.6 percent, after showing no change in the previous month. Jet fuel prices turned up in July, following declines a month earlier. The index for liquefied petroleum gas fell at a slower rate in July, while prices for gasoline and diesel fuel rose more than they did in June.

Crude goods

Prices for crude materials for further processing advanced 0.6 percent in July, after posting a 3.6-percent decline in June. The index for crude foodstuffs and feedstuffs turned up in July, while prices for crude energy materials fell at a slower rate than they did in June. The basic industrial materials index moved up at a slightly faster rate in July than it did a month earlier. (See table B.)

Following a 0.9-percent drop in June, the index for crude foodstuffs and feedstuffs rose 1.5 percent in July. Leading this upturn, corn prices advanced 17.8 percent in July, after falling 0.4 percent in the previous month. Prices for slaughter hogs, wheat, and soybeans climbed faster in July than they did in the prior month. The index for slaughter cattle fell at a slower pace than it did in June. By contrast, prices for slaughter broilers and fryers declined 7.9 percent in July, following a 5.8-percent rise in June. The fluid milk index fell at a faster rate in July than it did a month ago. The index for fresh and dry vegetables moved up at a slower rate in July than it did in the preceding month.

The Producer Price Index for Crude Energy Materials declined 0.9 percent in July, after registering an 8.9-percent drop in June. Crude petroleum prices advanced 9.5 percent, turning up from a 19.5-percent fall in the previous month. Alternatively, the index for natural gas dropped 7.7 percent in July, following a 3.5-percent decrease a month earlier. Prices for coal fell 1.2 percent in July, after remaining unchanged in the prior month.

Prices for basic industrial materials rose 1.7 percent, after advancing 1.6 percent in June. Rising prices for wastepaper, raw cotton, iron and steel scrap, and nonferrous metal ores were partially offset by falling prices for aluminum base scrap, copper base scrap, pulpwood, and gold ores.

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 2.1 percent in July, after posting a 7.0-percent decrease in the previous month. (Net output price indexes are not seasonally adjusted.) Prices received by the oil and gas extraction industry group moved down 3.1 percent, following a 9.8-percent drop in June. The index for the metal mining industry group advanced 0.9 percent, after rising 0.7 percent in the prior month. On the other hand, prices received by the industry group for coal mining decreased 0.2 percent, compared with a 0.1-percent decline a month earlier. In July 2002, the Producer Price Index for Total Mining Industries stood at 92.6 (December 1984 = 100), 6.2 percent below its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Domestic Manufacturing Industries showed no change for the second consecutive month. In July, higher prices received by the industry groups for petroleum refining and related products, chemicals and allied products, food and kindred products, fabricated metal products (except machinery and transportation equipment), and lumber and wood products (except furniture) offset price decreases received by the industry groups for transportation equipment, machinery (except electrical), electrical and electronic machinery and equipment, and rubber and miscellaneous plastic products. In July, the Producer Price Index for Total Manufacturing Industries stood at 133.6 (December 1984 = 100), 0.6 percent lower than a year ago.

Services. Among service industries in July, advancing prices were registered by the United Stated Postal Service, general medical and surgical hospitals, specialty hospitals (except psychiatric), help supply services, advertising agencies, and wireless telecommunications. By contrast, falling prices were posted by the industries for telephone communications (except radiotelephone); accounting, auditing, and bookkeeping services; engineering, design, analysis, and consulting services; truck rental and leasing; and trucking (except local).

Resampling of Industries

Effective with the release of data for July 2002, the Producer Price Index (PPI) includes data for 19 resampled industries. The Bureau of Labor Statistics periodically updates the sample of producers providing data for the PPI to more accurately reflect current conditions when the structure, membership, technology, or product mix of an industry shifts. The first results of this systematic process were published in July 1986. Subsequent efforts have been completed at 6-month intervals.

Also effective with this release, PPIs for 2 service industries were introduced: Standard Industrial Classification (SIC) 4833, Television Broadcasting Stations, and SIC 5531, Auto and Home Supply Stores. The index data for SIC 4833 have a start date of June 2001, while the index data for SIC 5531 have start date of December 2001. The introduction of these industries is part of an ongoing effort to expand PPI coverage to sectors of the economy other than mining and manufacturing.

For information on specific index additions, deletions, and recodes that are effective with this semi-annual update, or to obtain the article that introduces SIC 4833, see the July 2002 issue of the PPI Detailed Report or contact the Division of Industrial Prices and Price Indexes, Section of Index Analysis and Public Information at ppi-info@BLS.gov or (202) 691-7705.

SIC Code Industry

1312 Crude petroleum and natural gas* 1322 Natural gas liquids and natural gas residue* 2023 Dry, condensed, and evaporated milk products 2077 Animal and marine fats and oils 2311 Men's and boys' suits and coats 2385 Waterproof outer garments 2499 Wood products, not elsewhere classified 2653 Corrugated and solid fiber boxes 2796 Platemaking services 2911 Petroleum refining 3341 Secondary smelting and refining of nonferrous metals 3399 Primary metal products, not elsewhere classified 3466 Metal crowns and closures 3482 Small arms ammunition, 30mm and under 3494 Valves and pipe fittings, not elsewhere classified 3497 Metal foil and leaf 3537 Industrial trucks and tractors 3669 Communications equipment, not elsewhere classified 4724 Travel agencies 4833 Television broadcasting stations** 5531 Auto and home supply stores **

* These industry codes are PPI constructed and correspond to SIC 1311 and SIC 1321. ** Newly introduced PPI.