August 2002 Producer Price Index

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The Producer Price Index for Finished Goods showed no change in August, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This index posted a 0.2-percent decline in July and a 0.1-percent gain in June. At the earlier stages of processing, prices received by intermediate goods producers rose 0.4 percent, following a 0.2-percent increase in July. August's crude goods index advanced 1.6 percent, after moving up 0.6 percent in July. (See table A.)

Among finished goods in August, a 1.0-percent rise in finished energy goods prices followed a 0.1-percent increase in July. On the other hand, the index for finished consumer foods fell 0.4 percent, compared with a 0.1- percent decline in July. The index for finished goods other than foods and energy turned down 0.1 percent in August, after falling 0.3 percent in the prior month.

Before seasonal adjustment, August's Producer Price Index for Finished Goods decreased 0.1 percent to 138.7 (1982=100). From August 2001 to August 2002, prices for finished goods dropped 1.6 percent. During the same period, the finished energy goods index fell 5.8 percent, prices for finished consumer foods declined 2.4 percent, and the index for finished goods other than foods and energy inched down 0.3 percent. At the earlier stages of processing, prices received by manufacturers of intermediate goods decreased 0.9 percent and the index for crude goods declined 4.2 percent.

Finished goods

The finished energy goods index increased 1.0 percent in August, after posting a 0.1-percent gain in July. Prices for residential electric power rose 0.3 percent, compared with a 0.7-percent decrease in the previous month. The index for liquefied petroleum gas also turned up, after declining in July. Gasoline prices rose more in August than they did in July. Residential natural gas prices showed no change, after decreasing in the previous month. By contrast, home heating oil prices decreased 1.4 percent, compared with a 6.0-percent rise in the prior month. The index for finished lubricants also turned down in August. Diesel fuel prices increased at a slower pace in August than they did in July.

Prices for finished consumer foods posted a 0.4-percent decline in August, after dipping 0.1 percent in the previous month. The index for fresh and dry vegetables decreased 8.2 percent, following a 4.9-percent rise in July. Prices for pork, finfish and shellfish, and processed fruits and vegetables also turned down in August, after increasing in the prior month. The indexes for beef and veal and processed young chickens fell more than they did in July. However, prices for fresh fruits and melons rose 7.4 percent in August, following a 5.6-percent decline in July. The indexes for dairy products, eggs for fresh use, and soft drinks fell at a slower rate in August than they did in the previous month.

Following a 0.4-percent decrease in July, the index for finished consumer goods other than foods and energy edged down 0.1 percent. Passenger car prices declined 0.1 percent, after falling 1.5 percent in July. Prices for light motor trucks also fell less than they did in the previous month -- down 1.3 percent following a 1.6-percent decline in July. The indexes for men's and boys' apparel, alcoholic beverages, and sanitary papers and health products turned up in August, after decreasing in July. Prices for pharmaceutical preparations rose at a faster pace in August than they did in July. On the other hand, prices for prerecorded compact discs fell 9.3 percent, following a 0.1-percent decline in the prior month. In August, the indexes for floor coverings, newspaper circulation, textile housefurnishings, and soaps and synthetic detergents turned down, after advancing in the previous month. Cigarette prices showed no change, after rising a month earlier. The index for household furniture rose less than it did in July.

The capital equipment index fell 0.1 percent in August, after declining 0.4 percent a month ago. Subsequent to a 1.0-percent drop in July, prices for communication and related equipment decreased 0.2 percent in August. The indexes for passenger cars, light motor trucks, and pumps and compressors also fell less in August than they did in the previous month. Civilian aircraft prices rose at a slightly faster pace than in July. By contrast, prices for heavy motor trucks decreased 0.2 percent in August, following a 0.9-percent advance in the prior month. The indexes for integrating and measuring instruments, plastic working machinery, and power hand tools (electric/battery powered) also turned down, after rising a month earlier. The rate of increase in prices for tools, dies, jigs, fixtures, and industrial molds slowed from July to August.

Intermediate goods

Prices for intermediate goods advanced 0.4 percent in August, after rising 0.2 percent in July. This acceleration was mostly due to the index for intermediate energy goods, which turned up in August after falling in the prior month. The indexes for nondurable manufacturing materials, materials and components for construction, and durable manufacturing materials moved up at a faster pace than they did in July. Alternatively, prices for intermediate foods and feeds rose at a slower rate in August than they did in the prior month. Excluding food and energy prices, the index for intermediate goods advanced 0.4 percent in August, compared with a 0.2-percent increase in July. (See table B.)

The index for intermediate energy goods turned up 0.6 percent in August, after posting a 1.0-percent decline in the previous month. Prices for natural gas to electric utilities advanced 4.8 percent, following an 11.0-percent drop in July. The industrial natural gas and commercial natural gas indexes also turned up in August. Prices for commercial electric power remained unchanged, after falling in July, while the index for gasoline rose at a faster rate in August than it did a month earlier. Partially offsetting these accelerating prices, the index for industrial electric power moved down 0.4 percent in August, following a 1.6-percent rise in July. Prices for jet fuels also turned down in August. Diesel fuel prices increased at a slower pace in August than they did in the preceding month.

Following a 0.7-percent increase, the index for nondurable manufacturing materials rose 1.0 percent in August. Plastic resin and material prices advanced 3.1 percent in August, after moving up 1.3 percent a month earlier. Prices for primary basic organic chemicals, paperboard, and alkalies and chlorine rose at a faster rate than they did in July. The fertilizer material index turned up in August. Conversely, ethanol prices fell 2.3 percent this month, following a 2.8-percent gain in the prior month. Processed yarn and thread prices fell faster in August than they did in the previous month, while the index for medicinal and botanical chemicals posted no change, following an increase in July.

The index for construction materials and components climbed 0.4 percent in August, after rising 0.2 percent in the preceding month. The August index for plastic construction products advanced 1.4 percent, following a 0.1-percent gain in July. Prices for gypsum products, plywood, millwork, and asphalt felts and coatings turned up in August, compared with decreases in the prior month. By contrast, the index for fabricated structural metal products rose 0.1 percent in August, after registering a 0.8-percent increase a month earlier. The indexes for softwood lumber, nonferrous wire and cable, and metal valves (except fluid power) turned down in August. Air conditioning and refrigeration equipment prices rose at a slower rate in August than they did in July.

The index for durable manufacturing materials increased 0.3 percent in August, following a 0.2-percent gain in the prior month. Rising prices for steel mill products, aluminum mill shapes, cement, and prepared paint more than offset declining prices for primary nonferrous metals and copper and brass mill shapes.

Prices for intermediate foods and feeds moved up 0.6 percent in August, after rising 1.5 percent in the prior month. Prepared animal feed prices advanced 1.5 percent, following a 3.5-percent gain in July. The indexes for pork; confectionery materials; and dry, condensed, and evaporated milk products turned down in August. The beef and veal index fell at faster rate in August than it did in July. On the other hand, prices for natural, processed, and imitation cheese jumped 0.7 percent in August, after posting a 5.1-percent decline in the preceding month. The indexes for crude vegetable oils and flour rose more in August than they did a month earlier. Refined sugar prices fell at a slower pace in August than they did in July.

Crude goods

The Producer Price Index for Crude Materials for Further Processing advanced 1.6 percent in August, compared with a 0.6-percent increase in July. The index for crude energy materials moved up in August, after falling a month earlier. Prices for crude foodstuffs and feedstuffs rose at a faster pace in August than they did in July. On the other hand, the index for crude nonfood materials less energy advanced less than it did in the previous month. (See table B.)

The index for crude energy materials turned up 1.6 percent in August, following a 0.9-percent decline in the prior month. After dropping 7.7 percent in July, natural gas prices rose 0.4 percent in August. The coal index fell 0.8 percent, following a 1.2-percent decrease in July. By contrast, crude petroleum prices advanced 4.3 percent, compared with a 9.5- percent gain in the preceding month.

The index for crude foodstuffs and feedstuffs increased 2.0 percent in August, after rising 1.5 percent in July. Slaughter cattle prices advanced 1.2 percent, following a 2.6-percent decline in the previous month. The indexes for fluid milk and fresh fruits and melons also turned up in August. Price decreases for slaughter broilers and fryers slowed from July to August. On the other hand, the slaughter hog index dropped 15.0 percent in August, compared with a 17.6-percent jump in July. Prices for fresh and dry vegetables, slaughter turkeys, and unprocessed finfish also moved down, after increasing in the prior month. Soybean prices rose at a slower pace in August than they did in July.

Prices for basic industrial materials rose at a 0.4-percent rate in August, following a 1.7-percent increase in July. The wastepaper index also advanced at a slower pace, 0.8 percent after rising 10.4 percent in the previous month. Raw cotton prices fell 0.3 percent, following a 15.7- percent gain in July. The August index for iron and steel scrap advanced less than it did a month earlier, while prices for aluminum base scrap, copper base scrap, and gold ores decreased at a quicker rate than they did in July. By contrast, the index for hides and skins increased 3.0 percent, after showing no change in the preceding month. Prices for phosphates and iron ore turned up in August, following declines in July.

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

Mining. The Producer Price Index for the Net Output of Total Domestic Mining Industries rose 1.1 percent in August, after declining 2.1 percent in the prior month. (Net output price indexes are not seasonally adjusted.) Leading this acceleration, prices received by the natural gas liquids and natural gas residue industry moved up 8.8 percent, following a 9.2-percent decrease in July. The industry indexes for oil and gas well drilling, bituminous coal and lignite surface mining, and iron ores also turned up in August. By contrast, prices received by the crude petroleum and natural gas industry fell 1.2 percent, following a 2.6-percent increase in the previous month. The industry index for bituminous coal underground mining also moved down, after advancing in July. In August 2002, the Producer Price Index for the Net Output of Total Mining Industries was 93.6 (December 1984=100), 5.4 percent below its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Domestic Manufacturing Industries edged up 0.1 percent in August, after showing no change in the prior month. Higher prices received by the industry groups for petroleum refining and related products, chemicals and allied products, rubber and miscellaneous plastic products, paper and allied products, and fabricated metal products (except machinery and transportation equipment) outweighed price decreases for the transportation equipment; machinery (except electrical); food and kindred products; and printing, publishing, and allied products industry groups. In August 2002, the Producer Price Index for the Net Output of Total Manufacturing Industries was 133.7 (December 1984=100), 0.7 percent lower than a year ago.

Services. Among service industries in August, advancing prices were registered by the industries for operators and lessors of nonresidential buildings, help supply services, prepackaged software, general medical and surgical hospitals, scheduled air transportation, truck rental and leasing, and for skilled and intermediate care facilities. On the other hand, falling prices were posted by the industries for data processing services, employment agencies, railroads (line-haul operating), and passenger car rental.