December 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 showed no change in December, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This followed a 0.4-percent decline in November and a 1.1-percent advance in October. At the earlier stages of processing, prices received by producers of intermediate goods decreased 0.1 percent for the second consecutive month. The crude goods index rose 1.9 percent, after increasing 5.1 percent in November. (See table A.)

Among finished goods, the index for finished goods other than foods and energy declined 0.3 percent in December, the same as in November. The decline in December largely reflected falling prices for passenger cars and light trucks. When prices for passenger cars and light trucks are excluded the index for finished goods other than foods and energy edged down 0.1 percent. On the other hand, prices for finished energy goods increased 0.9 percent, following a 1.8-percent decrease in November. Finished consumer food prices rose 0.4 percent in December, compared with a 0.3-percent gain a month earlier.

Before seasonal adjustment, the Producer Price Index for Finished Goods decreased 0.4 percent to 139.1 (1982=100). From December 2001 to December 2002, finished goods prices increased 1.2 percent, after declining 1.6 percent during 2001. Prices for finished energy goods turned up 11.9 percent in 2002, following a 17.1-percent drop in the previous calendar year. Conversely, for the 12 months ended in December 2002, the index for finished goods other than foods and energy decreased 0.4 percent, after posting a 0.9-percent gain in 2001. Prices for finished consumer foods fell 0.6 percent in 2002, following a 1.8-percent increase a year earlier. At the earlier stages of processing, the intermediate goods index advanced 3.2 percent from December 2001 to December 2002, after registering a 4.0- percent decline during 2001. Prices received by producers of crude materials for further processing jumped 26.1 percent in 2002, following a 32.5-percent drop in the prior calendar year. (See summary below.)

Crude materials for further processing 35.5 -32.5 26.1 38.5 5.1 14.9 50.6 Foodstuffs and feedstuffs 7.4 -7.6 4.4 22.6 -25.9 25.7 3.6 Crude energy materials 85.6 -52.9 66.1 87.8 40.1 9.3 165.1 Crude nonfood materials less energy -5.5 -9.9 12.4 8.5 32.7 4.4 6.2 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.

Finished goods

The index for finished consumer goods other than foods and energy fell 0.3 percent in both December and November. In December, price declines for passenger cars, light motor trucks, floor coverings, men's and boys' apparel, and cigarettes prevailed over rising prices for sporting and athletic goods, book publishing, sanitary papers and health products, alcoholic beverages, and footwear. During the 2002 calendar year, prices for finished consumer goods other than foods and energy edged down 0.1 percent, following a 1.5-percent hike in 2001.

Capital equipment prices fell 0.4 percent in December, following a 0.2- percent decrease in the previous month. Subsequent to a 0.3-percent gain in November, the index for light motor trucks declined 1.6 percent. Prices for heavy motor trucks, civilian aircraft, and construction machinery and equipment rose more slowly in December than they did in November. Commercial furniture prices turned down, after rising in the prior month. On the other hand, the rate of decline for passenger car prices slowed from 3.6 percent in November to 2.0 percent in December. The index for metal cutting machine tools also fell less in December than it did a month earlier. Prices for transformers and power regulators turned up, after declining in November. The index for industrial material handling equipment rose more in December than it did in the preceding month. For the 12 months ended December 2002, capital equipment prices decreased 0.9 percent, after showing no change during the previous calendar year.

Prices for finished energy goods increased 0.9 percent in December, after decreasing 1.8 percent in November. The gasoline index rose 1.6 percent, following a 9.0-percent decline in the preceding month. Prices for home heating oil, liquefied petroleum gas, and diesel fuel also turned up, after falling in November. The index for residential electric power rose more in December than it did in the prior month. By contrast, residential natural gas prices decreased 0.4 percent, following a 3.1- percent advance in November.

The index for finished consumer foods increased at about the same rate in December as in the prior month -- 0.4 percent and 0.3 percent, respectively. Rising prices for beef and veal, dairy products, processed young chickens, confectionery end products, and processed turkeys outweighed price declines for fresh fruits and melons, finfish and shellfish, fresh and dry vegetables, and eggs for fresh use.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components inched down 0.1 percent for the second consecutive month. An increase in the December intermediate foods and feeds index partly offset declining prices for materials for nondurable manufacturing, intermediate energy goods, and materials for durable manufacturing. December prices for materials and components for construction remained unchanged. The index for intermediate goods other than foods and energy edged down 0.1 percent in December, after rising at a similar rate in the prior month. (See table B.)

The index for materials for nondurable manufacturing declined 1.3 percent in December, following a 0.5-percent rise in the previous month. The index for basic organic chemicals decreased 2.3 percent, after advancing 1.6 percent in November. The indexes for plastic resins and materials, paper, synthetic rubber, and gray fabrics also turned down in December. Finished fabric prices remained unchanged in December, after increasing in November. On the other hand, prices for alkalies and chlorine advanced 2.3 percent in December, after moving down 1.7 percent in the preceding month. The index for inedible fats and oils increased at a faster rate in December than it did a month earlier. The December phosphate index fell at a slower pace than in November. During 2002, prices for materials for nondurable manufacturing rose 4.3 percent, after declining 5.5 percent in 2001.

The index for intermediate energy goods decreased 0.4 percent, after registering a 1.5-percent decline in November. The indexes for residual fuel, industrial natural gas, and kerosene posted decreases in December, while prices for diesel fuel, gasoline, and commercial electric power increased. From December 2001 to December 2002, the intermediate energy goods index advanced 11.4 percent, following a 16.9-percent drop in 2001.

The index for materials for durable manufacturing fell 0.1 percent in December, after registering a 0.6-percent rise in the prior month. The index for hot rolled steel sheet and strip decreased 0.6 percent, following a 2.7-percent gain in November. Prices for primary aluminum (except extrusion billet) and for copper cathode and refined copper moved up at slower rate in December than in November. Hot rolled steel bars, plates, and structural shape prices fell at a faster pace in December than they did a month earlier. By contrast, the index for flat glass rose 0.8 percent in December, after declining 0.5 percent in November. Cement, cold finished steel bars, and hardwood lumber prices turned up in December. Durable manufacturing material prices increased 3.2 percent in 2002, following a 4.0-percent decline in the previous year.

Subsequent to a 0.5-percent gain in November, the index for intermediate foods and feeds rose 1.1 percent. The index for beef and veal advanced 5.7 percent in December, following a 2.0-percent increase in November. Prices for prepared animal feeds posted no change in December, after declining in the preceding month. The indexes for natural, processed, and imitation cheese and for confectionery materials turned up in December. Partially offsetting the intermediate foods and feeds acceleration, pork prices fell 0.7 percent in December, following a 4.1- percent gain a month earlier. The fluid milk products index also turned down in December. The indexes for crude vegetable oils and for mayonnaise, salad dressings, and sandwich spreads rose at a slower rate than they did in November. Prices for intermediate foods and feeds increased 4.5 percent during 2002, after posting a 0.3-percent rise in 2001.

The index for materials and components for construction remained unchanged in December, after posting a 0.4-percent drop in the preceding month. The index for plastic construction products rose 0.1 percent, following a 3.8-percent decrease in November. Prices for fabricated structural metal products and for plumbing fixtures and brass fittings also turned up in December. Millwork prices registered no change in December, after falling in the prior month. By contrast, the index for softwood lumber declined 0.8 percent, following a 0.1-percent gain in the previous month. Prices for nonferrous wire and cable, fabricated ferrous wire products, and steel wire also turned down in December. For the 12 months ended December 2002, the index for materials and components for construction rose 0.8 percent, after posting no change in the prior year.

Crude goods

The Producer Price Index for Crude Materials for Further Processing advanced 1.9 percent in December, following a 5.1-percent increase in the previous month. Prices for crude energy materials and basic industrial materials also rose at a slower pace than they did in November. By contrast, the crude foodstuffs and feedstuffs index turned up in December, after falling in the prior month. (See table B.)

Prices for crude energy materials rose 3.6 percent in December, compared with a 13.1-percent increase a month earlier. The natural gas index moved up 3.3 percent, after jumping 37.9 percent in November. Coal prices declined 1.6 percent, following a 0.6-percent gain in the previous month. On the other hand, the index for crude petroleum advanced 6.6 percent in December, after dropping 13.5 percent in the prior month. Prices for crude energy materials increased 66.1 percent during 2002, following a 52.9-percent decline in 2001.

The crude nonfood materials less energy index rose 0.2 percent in December, after posting a 0.4-percent gain in the previous month. Raw cotton price increases slowed from 13.1 percent in November to 5.3 percent in December. Prices for leaf tobacco and copper base scrap also increased at a slower rate than they did a month earlier. The indexes for aluminum base scrap and pulpwood turned down, after moving up in November. The indexes for wastepaper and softwood logs, bolts, and timber fell more in December than they did in November. Partially offsetting the deceleration in prices for basic industrial materials, the nonferrous metal ores index turned up 1.9 percent in December, following a 0.4-percent decline in the previous month. Prices for iron and steel scrap and for hides and skins fell at a slower pace than they did in November. The index for construction sand, gravel, and crushed stone rose more in December than it did in the prior month. Prices for crude nonfood materials less energy advanced 12.4 percent during calendar year 2002, compared with a 9.9- percent decrease in 2001.

Prices for crude foodstuffs and feedstuffs turned up 1.1 percent in December, after inching down 0.1 percent in the prior month. The index for slaughter broilers and fryers advanced 7.7 percent, following a 0.7-percent gain in November. Prices for corn, wheat, and fresh fruits and melons fell less than they did in the previous month. The fluid milk index turned up, after moving down in November. By contrast, slaughter cattle prices moved up 3.4 percent in December, following a 4.3-percent gain a month earlier. The indexes for soybeans and fresh vegetables other than potatoes turned down, after rising in November. The index for crude foodstuffs and feedstuffs advanced 4.4 percent in 2002, compared with a 7.6-percent decline in the prior calendar year.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries rose 2.9 percent in December, following a 9.3-percent advance in November. (Net output price indexes are not seasonally adjusted.) The slower rate of increase in mining sector prices can be traced to the index for the natural gas liquids and natural gas residue industry, which moved up 9.7 percent in December after surging 42.7 percent in November. Prices received by the crude petroleum and natural gas industry also rose at a slower rate in December than they did a month earlier. The industry indexes for oil and gas well drilling, bituminous coal underground mining, and bituminous coal surface mining fell at a quicker pace in December, compared with the preceding month. Prices received by the industry for oil and gas well exploration services turned down in December. Conversely, the industry index for crushed and broken limestone advanced 1.0 percent, following a 0.2-percent decline in November. Prices received by the gold ores industry increased more than they did in the previous month. In December, the Producer Price Index for the Net Output of Total Mining Industries was 115.6 (December 1984=100). From December 2001 to December 2002, prices received by the mining sector rose 49.0 percent, after decreasing 47.0 percent in 2001.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries fell 0.4 percent in December, following a 0.7- percent decline in November. Prices received by the petroleum refining and related products industry group decreased 4.4 percent, after an 8.9-percent drop in the prior month. The index for the food and kindred products industry group advanced more in December than it did in November. Prices received by the industry groups for sporting and athletic goods, lumber and wood products (except furniture), and for stone, clay, glass, and concrete products increased in December, following November decreases. On the other hand, the industry group index for chemicals and allied products declined 0.6 percent in December, compared with a 0.7-percent gain a month earlier. Prices received by the paper and allied products industry group also turned down in December. The industry group indexes for transportation equipment and for electrical and electronic machinery and equipment fell more than they did in the previous month. In December, the Producer Price Index for the Net Output of Total Manufacturing Industries was 134.1 (December 1984=100). From December 2001 to December 2002, prices received by the manufacturing sector rose 1.9 percent, after moving down 2.0 percent in 2001.

Services. Among service industries in December, prices received by the industries for operators and lessors of nonresidential buildings; telephone communications (except radiotelephone); radio broadcasting; engineering design, analysis, and consulting services; and for hotels and motels decreased in December. By contrast, the industry indexes for passenger car rental, local trucking without storage, cable and other pay television services, help supply services, and legal services increased in December.

Recalculated Seasonal Adjustment Factors and Relative Importances to be Available on February 18, 2003

Each year with the release of PPI data for January, seasonal adjustment factors are recalculated to reflect price movements from the just-completed calendar year. This routine annual calculation may result in revisions to seasonally adjusted indexes for the previous 5 years. The following information will be available on February 18, 2003 (2 workdays prior to the release of PPI data for January 2003 on February 20):

Seasonal factors for commodity indexes for the year 2003,

Recalculated seasonal factors for the last 5 years (1998-2002) for the commodity indexes,

Recalculated seasonal factors for the last 5 years (1998-2002) for the stage-of-processing indexes.

In addition to recalculated seasonal factors, December 2002 relative importances will also be available on February 18, 2003.

To obtain any of this information, visit the PPI website at http://www.bls.gov/ppi/ or call the Division of Industrial Prices and Price Indexes, Section of Index Analysis and Public Information at (202) 691- 7705.