October 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 jumped 1.1 percent in October, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This index edged up 0.1 percent in September and showed no change in August. Rising prices for gasoline, light trucks, and passenger cars led the increase in the finished goods index in October. At the earlier stages of processing, prices received by producers of intermediate goods advanced 0.7 percent, following a 0.5- percent rise in September. The crude goods index jumped 3.4 percent in October, compared with a 0.6-percent increase in the preceding month. (See table A.)

Among finished goods, the index for finished energy goods advanced 4.2 percent in October, following a 0.9-percent gain in September. (Excluding gasoline, prices for finished goods would have risen 0.6 percent in October.) The index for finished consumer foods turned up 0.7 percent in October, after falling 0.6 percent in September. Prices for finished goods other than foods and energy rose 0.5 percent in October, compared with a slight increase of 0.1 percent in the prior month. (Excluding passenger cars and light trucks, prices for finished goods other than foods and energy would have inched 0.1 percent higher in October.)

For the first 10 months of 2002, the Producer Price Index for Finished Goods increased at a 2.0-percent seasonally adjusted annual rate, following a 1.6-percent rate of decline in calendar-year 2001. Prices for finished goods other than foods and energy edged up at a 0.2-percent seasonally adjusted annual rate during the first 10 months of 2002, after posting a 0.9-percent gain in 2001. Among prices for raw and partially processed goods, the intermediate goods index advanced at a 3.7-percent seasonally adjusted annual rate from December 2001 through October 2002, compared with a 4.0-percent decrease in 2001. Prices for crude goods jumped at a 21.5- percent seasonally adjusted annual rate during the first 10 months of 2002, after dropping 32.5 percent in 2001.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 1.2 percent to 140.6 (1982 = 100). From October 2001 to October 2002, finished goods prices rose 0.6 percent. During the same period, the index for finished energy goods advanced 4.9 percent and prices for finished goods other than foods and energy increased 0.5 percent. By contrast, the index for finished consumer foods declined 2.2 percent for the 12 months ended in October. Earlier in the pipeline, prices received by intermediate goods producers moved up 1.6 percent, and the crude goods index jumped 14.3 percent from October 2001 to October 2002.

Finished goods

The October index for finished energy goods advanced 4.2 percent, after posting a 0.9-percent gain a month earlier. Leading the rise in energy goods prices, the gasoline index surged 17.9 percent. Prices for residential natural gas, home heating oil, diesel fuel, and liquefied petroleum gas also increased in October. On the other hand, the index for residential electric power fell 0.3 percent in October.

Prices for finished consumer foods rose 0.7 percent in October, compared with a 0.6-percent decline in the prior month. The index for pork jumped 11.5 percent, following a 5.4-percent decrease in September. Prices for dairy products, fresh and dry vegetables, and fresh fruits and melons also turned up in October. The index for finfish and shellfish increased at a quicker pace in October than it did in the preceding month. By contrast, prices for beef and veal fell 2.6 percent, after rising 1.0 percent in September. The indexes for processed fruits and vegetables and soft drinks also turned down in October.

Prices for finished consumer goods other than foods and energy advanced 0.6 percent in October, after edging up 0.1 percent in September. The index for passenger cars jumped 2.2 percent, following a 0.2-percent rise in the prior month. For the 12 months ended in October 2002, passenger car prices increased 2.1 percent. Light motor truck prices advanced 1.9 percent, following a 0.2-percent decline in the prior month. From October 2001 to October 2002, prices for light motor trucks declined 3.0 percent. In accordance with usual practice, most new model year passenger cars and light trucks were introduced into the PPI in October. (See Report on Quality Changes for 2003 Model Vehicles, USDL 02-634.) The indexes for pharmaceutical preparations, alcoholic beverages, and women's apparel advanced at a faster rate in October than they did in the preceding month. Prices for men's and boys' apparel, for girls', children's, and infants' apparel, and for household furniture rose, after showing no change in September. On the other hand, the index for soaps and synthetic detergents decreased 0.5 percent, following a 1.0-percent gain in the previous month. Prices for prerecorded compact discs, mobile homes, and periodical circulation also turned down in October.

The capital equipment index increased 0.4 percent in October, after posting no change in September. Most of this acceleration was due to higher prices for light motor trucks and passenger cars. Light motor truck prices advanced 1.9 percent, following a 0.2-percent decline in the prior month. The indexes for passenger cars and civilian aircraft rose more in October than they did in September. Prices for integrating and measuring instruments and welding machines and equipment turned up in October, after decreasing a month earlier. The October index for communication and related equipment fell less than it did in September. Conversely, prices for electronic computers declined 1.7 percent in October, compared with a 0.5-percent decrease in the preceding month. The index for x-ray and electromedical equipment also fell more than it did in September. Prices for heavy motor trucks were unchanged in October, after rising 0.5 percent in the prior month.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 0.7 percent in October, after rising 0.5 percent in September. Most of this increase was due to higher prices for intermediate energy goods, although the index for nondurable manufacturing materials also rose in October. By contrast, prices for materials and components for construction and for intermediate foods and feeds fell in October, and the index for durable manufacturing materials showed no change. Excluding foods and energy, the intermediate goods index edged up 0.1 percent for the second consecutive month. (See table B.)

Prices for intermediate energy goods advanced 4.1 percent in October, after posting a 2.5-percent gain in September. The gasoline index led this acceleration, jumping 17.9 percent in October following a 1.5-percent decline in the prior month. Prices for diesel fuel, commercial natural gas, and commercial electric power rose more than they did in September. On the other hand, the index for industrial electric power decreased 0.9 percent, after advancing at the same rate in September. Prices for liquefied petroleum gas, residual fuel, industrial natural gas, and jet fuels increased less in October than they did a month earlier.

The index for nondurable manufacturing materials rose 0.8 percent in October, the same rate of increase as in September. Price increases for ethanol, paper, rock salt, finished fabrics, medicinal and botanical chemicals, and fertilizer materials outweighed falling prices for plastic resins and materials, inedible fats and oils, liquid refinery gases, and paperboard.

Prices for construction materials declined 0.3 percent in October, after inching up 0.1 percent in September. Leading this deceleration, the index for plastic construction products fell 3.5 percent, following a 3.4- percent increase a month earlier. Prices for wiring devices and fabricated ferrous wire products also turned down, after rising in September. The indexes for fabricated structural metal products and for air conditioning and refrigeration equipment declined, after showing no change in the previous month. By contrast, softwood lumber prices edged up 0.2 percent in October, following a 1.6-percent drop in September. The indexes for asphalt felts and coatings, gypsum products, and for nonferrous wire and cable also turned up in October. Plywood prices decreased less in October than they did in the prior month.

The index for intermediate foods and feeds inched down 0.2 percent in October, after posting a 1.2-percent gain in September. Prices for prepared animal feeds fell 1.8 percent in October, following a 1.9-percent increase a month earlier. Likewise, the indexes for beef and veal, flour, and crude vegetable oils turned down in October. The rate of increase in prices for confectionery materials slowed from September to October. On the other hand, the pork index advanced 11.5 percent in October, following a 5.4-percent decline in the prior month. Prices for natural, processed, and imitation cheese and butter also posted increases, after falling in September.

The durable manufacturing materials index showed no change in October, following a 0.2-percent gain in September. The rate of increase in prices for steel mill products slowed to 0.3 percent from a 1.1-percent rate in the prior month. Following increases in September, prices turned down for prepared paint, copper and brass mill shapes, and gold. Conversely, the index for aluminum mill shapes advanced 0.5 percent in October, after declining 0.2 percent in September. Prices for plywood, building paper and board, and flat glass fell more slowly in October than they did in the prior month.

Crude goods

The Producer Price Index for Crude Materials for Further Processing advanced 3.4 percent in October, compared with a 0.6-percent increase in the previous month. Prices for crude energy materials and crude nonfood materials less energy moved up, after decreasing in September. On the other hand, the crude foodstuffs and feedstuffs index declined, following an increase in the prior month. (See table B.)

Prices for crude energy materials rose 8.9 percent in October, after edging down 0.1 percent a month earlier. The natural gas index jumped 18.5 percent, following a 4.8-percent decline in September. Coal prices increased 0.9 percent, after falling 0.4 percent in the previous month. Alternatively, the index for crude petroleum moved up 1.7 percent, compared with a 5.8-percent gain in the prior month.

Basic industrial materials prices turned up 0.9 percent in October, following a 0.6-percent decline in September. The aluminum base scrap index advanced 2.3 percent, after moving down 1.3 percent in the previous month. Prices for leaf tobacco, raw cotton, and copper base scrap also increased, after falling a month earlier. Prices for wastepaper decreased at a slower rate than they did in September. The iron and steel scrap index rose more than it did in the prior month. Partially offsetting these accelerating prices, the index for gold ores declined 0.7 percent, compared with a 2.6-percent gain in September. Hides and skins prices also turned down in October, after rising in the previous month. The indexes for pulpwood and construction sand, gravel, and crushed stone increased at a slower pace than they did in the prior month.

The index for crude foodstuffs and feedstuffs inched down 0.1 percent in October, following a 2.0-percent increase in the prior month. Leading this deceleration, corn prices dropped 10.7 percent, compared with a 9.7- percent gain in September. The indexes for wheat and alfalfa hay also turned down in October, after moving up in the previous month. Prices for slaughter broilers and fryers and soybeans fell more than they did in September. The slaughter cattle index advanced at a slower rate than it did a month earlier. By contrast, slaughter hog prices jumped 24.4 percent in October, following an 8.9-percent decline in the prior month. The indexes for fresh and dry vegetables, fresh fruits and melons, and unprocessed shellfish also turned up, after moving down in September. Prices for unprocessed finfish increased at a faster rate in October than they did a month earlier.

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 8.0 percent in October, after advancing 1.6 percent in the previous month. (Net output price indexes are not seasonally adjusted.) Contributing most heavily to this acceleration, prices received by the natural gas liquids and natural gas residue industry turned up 14.9 percent, following a 6.5-percent decrease in September. The industry indexes for bituminous coal and lignite surface mining and coal mining services also turned up in October. Prices for the crude petroleum and natural gas industry increased at a faster pace in October than they did in the prior month. Partially offsetting the overall acceleration, prices received by the oil and gas well drilling industry rose 0.3 percent in October, following a 1.3-percent increase in the previous month. The industry indexes for gold ores and for metal mining services turned down in October. Industry prices for kaolin and ball clay fell 0.3 percent, after posting no change in September. In October 2002, the Producer Price Index for Total Mining Industries was 102.7 (December 1984 = 100), 31.2 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Domestic Manufacturing Industries moved up 1.0 percent in October, after climbing 0.4 percent in the previous month. Prices for the transportation equipment industry group rose 3.2 percent in October, turning up from a 0.4- percent decline in the preceding month. Industry group prices for petroleum refining and related products, chemicals and allied products, and food and kindred products increased at a faster rate than they did in September. By contrast, the electrical and electronic machinery, equipment, and supplies industry group index moved down 0.4 percent, after falling 0.2 percent in September. Industry group prices for paper and allied products remained unchanged in October, following an increase in the preceding month. The industry group index for fabricated metal products (except machinery and transportation equipment) turned down in October, while industry group prices for printing, publishing, and allied industries rose at a slower rate in October than they did in September. In October 2002, the Producer Price Index for Total Manufacturing Industries was 135.6 (December 1984 = 100), 1.4 percent higher than a year ago.

Services. Among service industries in October, advancing prices were posted by the industries for engineering design, analysis, and consulting services; general medical and surgical hospitals; and deep sea foreign transportation of freight. On the other hand, the industries for telephone communications (except radiotelephone), operators and lessors of nonresidential buildings, and security brokers, dealers, and investment banking companies registered falling prices in October.

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 June 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.

See footnotes at end of table.

1/ The indexes for June 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.

1/ Data for June 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. 3/ Not available.

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 June 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.

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 June 2002 have been recalculated to incorporate late reports and corrections by respondents. 2/ Includes crude petroleum. 3/ Excludes crude petroleum.