September 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 rose 0.1 percent in September, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This index showed no change in August, after falling 0.2 percent in July. At the earlier stages of processing, prices received by intermediate goods producers increased 0.5 percent, following a 0.4-percent rise in August. The crude goods index advanced 0.6 percent in September, compared with a 1.6-percent increase a month earlier. (See table A.)

Among finished goods, the index for finished energy goods climbed 0.9 percent in September, following a 1.0-percent jump in August. Prices for finished goods other than foods and energy turned up 0.1 percent, after a decline of 0.1 percent. On the other hand, the index for finished consumer foods fell 0.6 percent in September, following a 0.4-percent decrease in the previous month.

During the third quarter of 2002, the finished goods index declined at a 0.6-percent seasonally adjusted annual rate, after falling at a 1.4- percent rate during the second quarter of 2002. Excluding prices for foods and energy, the finished goods index fell at a 1.6-percent seasonally adjusted annual rate for the three months ended September 2002, following a 1.1-percent rate of advance in the second quarter of 2002. Among prices for raw and partially processed goods, the intermediate goods index increased at a 4.1-percent seasonally adjusted annual rate during the third quarter of 2002, after advancing at a 3.5-percent rate in the preceding quarter. The seasonally adjusted annual rate of increase for crude goods prices accelerated from 7.9 percent to 11.9 percent from the second to the third quarter of 2002. (See summary below.)

Crude materials for further processing 15.3 35.5 -32.5 18.7 38.5 7.9 11.9 Foodstuffs and feedstuffs -.1 7.4 -7.6 4.5 22.6 -24.9 24.1 Crude energy materials 36.9 85.6 -52.9 42.2 87.8 49.5 2.4 Crude nonfood materials less energy 14.0 -5.5 -9.9 14.6 8.5 30.7 6.0 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 increased 0.1 percent to 138.9 (1982 = 100). From September 2001 to September 2002, prices for finished goods dropped 1.9 percent. During the same period, the index for finished consumer foods fell 3.1 percent and prices for finished goods other than foods and energy dropped 0.4 percent. The finished energy goods index declined 6.5 percent for the 12 months ended September 2002. Earlier in the pipeline, prices for intermediate goods fell 0.5 percent and the crude goods index increased 0.8 percent.

Finished goods

Prices for finished energy goods, which increased 1.0 percent in August, advanced 0.9 percent in September. Rising prices for liquefied petroleum gas, residential natural gas, home heating oil, and residential electric power were partly offset by declining prices for gasoline in September. The index for finished energy goods advanced at an 8.4-percent seasonally adjusted annual rate in the third quarter of 2002, compared with a 2.8-percent rate of increase during the previous quarter.

The index for finished consumer goods other than foods and energy turned up 0.1 percent in September, after registering a 0.1-percent decline a month earlier. Prices for compact discs jumped 12.5 percent, following a 9.3-percent drop in August. The indexes for passenger cars and for soaps and synthetic detergents also turned up in September. Prices for alcoholic beverages advanced at a faster rate in September then they did in August, while prices for cosmetics and other toilet preparations posted no change in September, after falling in the prior month. Light motor truck prices fell at a slower pace in September than they did in the preceding month. By contrast, prices for pharmaceutical preparations advanced 0.1 percent in September, following a 0.4-percent gain in August. The indexes for women's apparel and periodical circulation also rose at a slower rate than they did in the previous month. Prices for sanitary papers and health products and for book publishing turned down in September. The indexes for men's and boys' apparel and household furniture showed no change in September, after advancing in the previous month. During the third quarter of 2002, the index for finished consumer goods other than foods and energy decreased at a 1.5-percent seasonally adjusted annual rate, after advancing at a 2.3- percent rate for the second quarter of 2002.

The 0.6-percent decline in prices for finished consumer foods in September followed a 0.4-percent decrease in August. The index for finished consumer foods has fallen in 5 of the past 6 months. September prices for fresh fruits and melons turned down 0.7 percent, after rising 7.4 percent in August. The indexes for dairy products, pork, confectionery end products, and eggs for fresh use fell at a faster rate in September than they did a month earlier. On the other hand, beef and veal prices rose 1.0 percent in September, after dropping 3.0 percent in the prior month. Prices for processed fruits and vegetables, soft drinks, and finfish and shellfish also turned up in September. The index for processed young chickens moved down at a slower rate in September than it did in August. Prices for finished consumer foods fell at a 4.2-percent seasonally adjusted annual rate from June 2002 to September 2002, following an 11.7-percent annual rate of decrease from March 2002 to June 2002.

Capital equipment prices, which declined 0.1 percent in August, remained unchanged in September. Rising prices for civilian aircraft, heavy motor trucks, passenger cars, agricultural machinery and equipment, and commercial furniture were offset by declining prices for communication and related equipment, light motor trucks, integrating and measuring instruments, electronic computers, and welding machines and equipment. From June 2002 to September 2002, capital equipment prices fell at a 2.0- percent seasonally adjusted annual rate, after a 0.3-percent annual rate of decline from March 2002 to June 2002.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components rose slightly more in September than it did in August, up 0.5 percent compared with 0.4 percent in August. Although the indexes for nondurable manufacturing materials, intermediate foods and feeds, durable manufacturing materials, and construction materials moved up in September, the majority of September's increase can be attributed to higher prices for intermediate energy goods. By contrast, prices for components for manufacturing declined in September. The index for intermediate materials other than foods and energy advanced 0.1 percent, following a 0.4-percent increase in August. (See table B.)

The intermediate energy goods index rose more in September than it did in August -- up 2.5 percent and 0.6 percent, respectively. Among energy goods, prices for industrial natural gas moved up 3.0 percent, subsequent to a 0.3-percent increase in August. Prices for liquefied petroleum gas, residual fuel, and natural gas to electric utilities also increased at a faster rate than they did a month earlier. The indexes for jet fuels and industrial electric power turned up in September, following decreases in the previous month. On the other hand, the gasoline index turned down 1.5 percent in September, compared with a 3.7-percent gain in August. Diesel fuel prices advanced less than they did in the prior month. The intermediate energy goods index rose at an 8.6-percent seasonally adjusted annual rate during the third quarter of 2002, after a 14.0-percent rate of increase in the previous quarter.

Prices for nondurable manufacturing materials advanced 0.8 percent in September, following a 1.0-percent increase in August. The plastic resins and materials index rose 1.1 percent, after moving up 3.1 percent in the prior month. Prices for primary basic organic chemicals also rose at a slower pace than they did in the previous month. The indexes for paperboard and fertilizer materials turned down, following increases in August. Medicinal and botanical chemical prices fell, after showing no change a month earlier. By contrast, the ethanol index turned up 1.5 percent in September, following a 2.3-percent decline in August. Prices for processed yarns and threads showed no change, after decreasing in the prior month. The index for gray fabrics fell less than it did in the prior month. Synthetic rubber prices moved up at a faster rate than they did in August. The index for nondurable manufacturing materials advanced at a 10.3-percent seasonally adjusted annual rate from June 2002 to September 2002, following a 7.1-percent rate of increase in the second quarter of 2002.

Intermediate food and feed prices rose 1.2 percent in September, after moving up 0.6 percent in the prior month. Leading this acceleration, the beef and veal index advanced 1.0 percent, following a 3.0-percent decline in August. Prices for confectionery materials and refined sugar also turned up, after falling a month earlier. The indexes for prepared animal feeds and flour rose more than they did in the previous month. Partially offsetting the acceleration in the intermediate foods and feeds index, prices for natural, processed, and imitation cheese and for sausage and deli meats turned down, following increases in the prior month. Crude vegetable oil prices rose less than they did in the previous month, and the index for pork decreased at a faster pace than it did in August. Prices for intermediate foods and feeds advanced at a 14.1-percent seasonally adjusted annual rate during the third quarter of 2002, after declining at a 2.8-percent rate during the second quarter.

The durable manufacturing materials index moved up 0.2 percent in September, following a 0.3-percent increase in the previous month. Within durable manufacturing materials in September, rising prices for steel mill products, prepared paint, copper and brass mill shapes, and refined gold outweighed falling prices for plywood, aluminum mill shapes, building paper and board, and for copper cathode and refined copper. The index for durable manufacturing materials increased at a 2.9-percent seasonally adjusted annual rate from June 2002 to September 2002, after rising at a 4.6-percent seasonally adjusted annual rate in the previous quarter.

Prices for construction materials edged up 0.1 percent in September, following a 0.4-percent gain in the previous month. September's increasing prices for plastic construction products, plumbing fixtures and brass fittings, wiring devices, metal valves (except fluid power), hardwood lumber, and fabricated ferrous wire products offset price decreases for softwood lumber, asphalt felts and coatings, plywood, nonferrous wire and cable, millwork, and steel wire. The index for materials and components for construction rose at a 2.9-percent seasonally adjusted annual rate during the third quarter of 2002, following a 1.3-percent rate of increase during the second quarter.

The index for components for manufacturing decreased 0.2 percent in September, after showing no change in the prior month. Falling prices in September for motor vehicle parts, digital MOS integrated circuits, and complex electronic component assemblies outweighed rising prices for plastic transportation equipment parts and internal combustion engine parts and accessories. The index for components for manufacturing declined at a 1.6-percent seasonally adjusted annual rate from June to September 2002, after showing no change in the previous quarter.

Crude goods

The Producer Price Index for Crude Materials for Further Processing, which advanced 1.6 percent in August, rose 0.6 percent in September. Within crude goods, rising prices for crude foodstuffs and feedstuffs were partially counteracted by declining prices for crude nonfood materials less energy and crude energy materials. (See table B.)

The September index for crude foodstuffs and feedstuffs posted a 2.0- percent gain, the same rate of increase as in August. Although the indexes for slaughter cattle, fluid milk, and raw cane sugar moved up in September, a 9.7-percent rise in corn prices and a 19.0-percent jump in wheat prices accounted for a majority of September's advance. On the other hand, prices for slaughter hogs, slaughter broilers and fryers, slaughter turkeys, fresh fruits and melons, and fresh and dry vegetables decreased in September. After declining at a 24.9-percent seasonally adjusted annual rate from March 2002 to June 2002, the index for crude foodstuffs and feedstuffs increased at a 24.1-percent seasonally adjusted annual rate during the three months ended in September 2002.

Prices for basic industrial materials declined 0.6 percent in September, following a 0.4-percent advance in August. The wastepaper index decreased 8.1 percent, compared with a 0.8-percent rise in the prior month. Prices for softwood logs, bolts, and timber also turned down in September. Raw cotton prices fell more in September than they did a month earlier, while the phosphates index increased less than it did in August. Conversely, the indexes for nonferrous metal ores and pulpwood turned up, after decreasing in August. The indexes for aluminum base scrap and copper base scrap declined at a slower rate in September than they did in the previous month, while prices for iron and steel scrap rose more rapidly than they did a month earlier. The seasonally adjusted annual rate of increase in the index for crude nonfood materials less energy slowed to 6.0 percent in the third quarter of 2002 from a 30.7-percent rate of increase during the preceding three months.

A 4.8-percent decrease in natural gas prices in September followed a 0.4-percent increase in August and triggered a downturn in the crude energy materials index -- which declined 0.1 percent in September after posting a 1.6-percent rise in August. By contrast, crude petroleum prices increased 5.8 percent in September, compared with a 4.3-percent advance in the preceding month. The coal index fell less than it did in the previous month. For the calendar quarter ended September 2002, the index for crude energy materials rose at a 2.4-percent seasonally adjusted annual rate, after surging at a 49.5-percent rate during the calendar quarter ended June 2002.

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

Mining. The Producer Price Index for the Net Output of Total Domestic Mining Industries rose 1.6 percent in September, after climbing 1.1 percent in the previous month. (Net output price indexes are not seasonally adjusted.) With prices jumping 6.7 percent in September, the crude petroleum and natural gas industry was the most significant contributor to this acceleration. The industry index for gold ores also turned up in September. Prices for the oil and gas well drilling industry increased at a faster pace in September than they did in the prior month. Conversely, prices received by the natural gas liquids and natural gas residue industry fell 6.5 percent, following an 8.8-percent increase in the previous month. The industry indexes for bituminous coal and lignite surface mining and for potash, soda, and borate minerals also moved down, after advancing in August. For the three months ended September 2002, the index for the net output of total domestic mining industries moved up at a 2.1-percent annual rate, following a 36.6-percent annual rate of increase during the second quarter of this year. In September 2002, this index was 95.1 (December 1984 = 100), 4.7 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Domestic Manufacturing Industries moved up 0.4 percent in September, after increasing 0.1 percent in the prior month. Prices for the petroleum refining and related products industry group rose 5.4 percent in September, following a 2.4-percent jump in the preceding month. The machinery (except electrical) industry group index remained unchanged in September, after falling in August. The industry group indexes for food and kindred products; printing, publishing, and allied industries; and textile mill products turned up in September. On the other hand, prices for the rubber and miscellaneous plastic products industry group turned down 0.1 percent in September, following a 0.6-percent gain in August. The industry group index for chemicals and allied products rose at a slower rate in September than it did a month earlier, while the industry group prices for lumber and wood products (except furniture) turned down in September. After increasing at a 2.4-percent annual rate from March 2002 to June 2002, the index for the net output of total domestic manufacturing industries advanced at a 1.8-percent annual rate from June 2002 to September 2002. In September 2002, the Producer Price Index for Total Manufacturing Industries was 134.2 (December 1984 = 100), 1.0 percent lower than a year ago.

Services. Among service industries in September, advancing prices were registered by the industries for engineering design, analysis, and consulting services; help supply services; and psychiatric hospitals. On the other hand, falling prices were posted by the industries for passenger car rental, truck rental and leasing, and specialty hospitals other than psychiatric.

1/ Comprehensive relative importance figures are initially computed 3/ Includes crude petroleum. after the publication of December indexes and are recalculated 4/ Excludes crude petroleum. after final December indexes are available. The first-published 5/ Percent of total finished goods. and final December relative importances initially appear, 6/ Percent of total intermediate materials. respectively, in the release tables containing January and May data. 7/ Formerly titled "Crude materials for 2/ The indexes for May 2002 have been recalculated to incorporate further processing, excluding crude late reports and corrections by respondents. All indexes foodstuffs and feedstuffs, plant and are subject to revision 4 months after original publication. animal fibers, oilseeds, and leaf tobacco." 8/ Percent of total crude materials. Table 2. Producer price indexes and percent changes for selected commodity groupings by stage of processing (1982=100 unless otherwise indicated)

See footnotes at end of table.

1/ The indexes for May 2002 have been recalculated to incorporate 2/ Not seasonally adjusted. late reports and corrections by respondents. All indexes are subject 3/ Not available. to revision 4 months after original publication. Table 3. Producer price indexes for selected commodity groupings (1982=100 unless otherwise indicated)

1/ Data for May 2002 have been revised to reflect the availability of late reports and corrections by respondents. All data are subject to revision 4 months after original publication.

2/ Prices of some items in this grouping are lagged 1 month.

1/ Indexes in this table are derived from the net-output-weighted industry price indexes. Because of differences in coverage and aggregation methodology, they will generally not match the movements of similarly-titled indexes which are derived from traditional commodity groupings. 2/ The indexes for May 2002 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication. 3/ Not available. Table 5. Producer price indexes by stage of processing, seasonally adjusted (1982=100)

1/ All seasonally adjusted indexes are subject to change up to 5 years after original publication due to the recalculation of seasonal factors each January. The indexes for May 2002 have been recalculated to incorporate late reports and corrections by respondents. 2/ Includes crude petroleum. 3/ Excludes crude petroleum.