January 2003 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 1.6 percent in January, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.1-percent decrease in December and a 0.3-percent decline in November. At the earlier stages of processing, prices received by intermediate goods manufacturers rose 1.3 percent in January, following a 0.2-percent decline in the prior month. The crude goods index increased 6.9 percent, compared with a 2.2- percent gain in December. (See table A.)

2003 Jan. 1.6 1.6 4.8 .9 2.8 1.3 6.9

Among finished goods, the index for finished energy goods advanced 4.8 percent, following a 0.2-percent increase in December. Excluding prices for energy goods, the finished goods index rose 1.1 percent in January. The index for finished goods other than foods and energy advanced 0.9 percent, after posting a 0.5-percent decline in December. Excluding prices for passenger cars and light motor trucks, the index for finished goods other than foods and energy increased 0.3 percent in January. The finished consumer foods index increased 1.6 percent in January, after posting a 0.4- percent gain in the prior month.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 1.5 percent to 141.2 (1982=100). From January 2002 to January 2003, prices for finished goods rose 2.8 percent. Much of this increase was due to a 17.0-percent jump in the index for finished energy goods. During the same period, prices for finished goods other than foods and energy rose 0.5 percent, and the index for finished consumer foods moved up 0.4 percent. At the earlier stages of processing, prices received by producers of intermediate goods increased 4.5 percent and the index for crude goods advanced 29.3 percent.

Finished goods

Prices for finished energy goods jumped 4.8 percent in January, following a 0.2-percent increase in December. Although prices for most finished energy goods added to this acceleration, the largest contributor was the gasoline index, which advanced 13.7 percent after registering a 1.2- percent decrease in December. Prices for residential natural gas also turned up in January. The indexes for home heating oil and liquefied petroleum gas rose at a faster pace in January than they did a month earlier. By contrast, the residential electric power index rose 0.1 percent in January, following a 0.3-percent gain in the prior month.

2003 Jan. 1.3 6.1 .3 4.5 5.4 11.0 1.0 29.3

The index for finished consumer goods other than foods and energy advanced 0.9 percent in January, following a 0.4-percent decline in December. Prices charged by manufacturers for passenger cars moved up 3.5 percent, after falling 2.1 percent in the previous month. For the 12 months ended in January 2003, passenger car prices declined 1.4 percent. Prices charged by manufacturers for light motor trucks increased 4.1 percent, compared with a 2.2-percent decrease in the prior month. From January 2002 to January 2003, prices for light motor trucks rose 0.7 percent. Prices for floor coverings and household appliances turned up in January. The indexes for pharmaceutical preparations and periodical circulation rose, after showing no change in December. On the other hand, prices for sporting and athletic goods fell 0.2 percent, compared with a 3.1-percent increase in the prior month. The rate of decline in prices for cigarettes and for soaps and synthetic detergents increased from December to January.

January prices for capital equipment increased 0.7 percent, following a 0.4-percent decline in December. The indexes for light motor trucks and passenger cars rose in January, after falling in the preceding month. Prices for commercial furniture and for communication and related equipment also turned up in January. The electronic computers index fell at a slower rate in January than it did in December. Alternatively, the x-ray and electromedical equipment index posted a 0.6-percent decline, after inching up 0.1 percent in December. Prices for both heavy motor trucks and industrial material handling equipment remained unchanged in January, following an increase in the prior month.

Prices for finished consumer foods rose 1.6 percent in January, after posting a 0.4-percent gain in December. The fresh and dry vegetables index increased 18.2 percent in January, after moving down 5.0 percent in the prior month. Prices for finfish and shellfish, fresh fruits and melons, and pork also increased, after falling in December. By contrast, the dairy products index rose 0.4 percent in January, following a 1.4-percent gain in the previous month. Prices for beef and veal also rose at a slower rate than they did in the prior month. The indexes for soft drinks and for shortening and cooking oils turned down in January.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 1.3 percent in January, following a 0.2-percent decline in December. Most of this upturn can be traced to prices for intermediate energy goods and materials for nondurable manufacturing, which also posted gains after falling in the previous month. The indexes for materials and components for construction and materials for durable manufacturing increased, after showing no change in December. Prices for intermediate foods and feeds rose at a slightly quicker pace in January than they did in December. The index for intermediate goods other than foods and energy moved up at a 0.3-percent rate in January, following a 0.1-percent decrease in the prior month. (See table B.)

Subsequent to a 1.0-percent drop in December, prices for intermediate energy goods advanced 6.1 percent in January. The gasoline index jumped 13.7 percent, after registering a 1.2-percent decline in the previous month. Prices for industrial natural gas, residual fuels, and natural gas to electric utilities also turned up in January. The indexes for diesel fuel and liquefied petroleum gas rose at a faster pace than they did in the preceding month. Prices for commercial natural gas increased in January, after showing no change a month earlier.

The index for materials for nondurable manufacturing moved up 1.4 percent in January, compared with a 1.3-percent decrease in December. A significant portion of this upturn was due to the basic organic chemicals index, which advanced 5.2 percent in January following a 2.3-percent decline in the prior month. The indexes for finished fabrics, synthetic rubber, medicinal and botanical chemicals, and phosphates also rose in January, after falling a month earlier. Nitrogenate prices increased at a faster rate than they did in the preceding month, while the index for paperboard decreased more slowly than it did in December. Conversely, paper prices declined 0.4 percent in January, after edging down 0.1 percent in December. The index for gray fabrics also fell more quickly than it did in December. Prices for basic inorganic chemicals and for processed yarns and threads turned down in January, following December increases.

The index for materials and components for construction advanced 0.3 percent in January, after showing no change in December. Prices for plastic construction products jumped 2.6 percent, following a 0.3-percent increase in the prior month. The index for heating equipment also rose more quickly in January than in December. Prices for fabricated structural metal products and for air conditioning and refrigeration equipment moved up, after showing no change in December. The January indexes for wiring devices, mineral wool for structural insulation, and paving mixtures and blocks turned up, after falling a month earlier. On the other hand, the softwood lumber index declined 1.9 percent in January, compared with a 0.5- percent decrease in December. Prices for gypsum products and nonferrous wire and cable also fell more quickly in January than they did in the preceding month. The indexes for treated wood, plumbing fixtures and brass fittings, and architectural coatings moved down, after rising in the previous month.

The index for materials for durable manufacturing, which was unchanged for December, edged up 0.1 percent in January. Price increases for cold rolled steel sheet and strip; hot rolled steel bars, plates, and structural shapes; precious metals; copper cathode and refined copper; copper and brass mill shapes; adhesives and sealants; and hardwood lumber slightly outweighed price decreases for hot rolled steel sheet and strip, aluminum mill shapes, semifinished steel mill products, primary aluminum (except extrusion billet), and prepared paint.

The index for intermediate foods and feeds advanced at about the same rate in January as in the prior month -- 1.3 percent and 1.2 percent, respectively. In January, rising prices for beef and veal, prepared animal feeds, pork, processed young chickens, crude vegetable oils, and flour more than offset falling prices for dry milk products; shortening and cooking oils; natural, processed, and imitation cheese; and fluid milk products.

Crude goods

The Producer Price Index for Crude Materials for Further Processing advanced 6.9 percent in January, following a 2.2-percent gain in December. Prices for crude energy materials, crude foodstuffs and feedstuffs, and basic industrial materials also increased at a faster rate in January than in the prior month. (See table B.)

The index for crude energy materials rose 11.0 percent in January, after increasing 3.6 percent in the previous month. Leading this acceleration, prices for crude petroleum jumped 20.4 percent, following a 6.6-percent gain in December. The natural gas index moved up 8.2 percent, after rising 3.3 percent in the prior month. Prices for coal turned up 1.9 percent in January, following a 1.6-percent decline a month earlier.

The index for crude foodstuffs and feedstuffs moved up 5.4 percent in January, after rising 1.5 percent in the previous month. Slaughter cattle prices advanced 9.1 percent, following a 3.4-percent increase in December. The indexes for slaughter broilers and fryers and fluid milk also rose more in January than they did a month earlier. Prices for fresh vegetables (except potatoes), unprocessed finfish, and fresh fruits and melons turned up, after decreasing in the previous month. By contrast, the wheat index fell 8.3 percent in January, following a 4.3-percent decline in the prior month. Soybean prices also decreased at a faster pace than they did in December. The indexes for slaughter hogs and slaughter turkeys rose less than they did in the previous month. Prices for alfalfa hay and Irish potatoes for processing turned down in January, after increasing a month earlier.

The index for crude nonfood materials less energy rose 1.0 percent in January, following a 0.5-percent increase in the prior month. Iron and steel scrap prices turned up 0.9 percent, after falling 1.2 percent in December. The phosphate index also advanced, following a decline in the previous month. Prices for gold ores increased at a faster rate in January than they did a month earlier. The iron ore index moved up, after showing no change in December. Partially counteracting these accelerating prices, the wastepaper index dropped 3.4 percent in January, after declining 0.7 percent a month earlier. Prices for construction sand, gravel, and crushed stone and for leaf tobacco turned down, following gains in December. The indexes for copper base scrap and raw cotton rose less than they did in the previous month.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries rose 9.2 percent in January, following a 2.9-percent advance in December. (Net output price indexes are not seasonally adjusted.) The acceleration in mining sector prices can be traced to the index for the crude petroleum and natural gas industry, which moved up 18.8 percent in January, after advancing 0.8 percent in December. Prices received by the bituminous coal and lignite surface mining industry, the bituminous coal underground mining industry, and the oil and gas well drilling industry turned up in January. The industry index for gold ores rose at a quicker pace in January than it did a month earlier. Alternatively, the industry index for natural gas liquids and natural gas residue increased 3.2 percent, following a 9.7-percent jump in December. Prices received by the potash, soda, and borate minerals industry turned down in January. The industry index for crushed and broken limestone rose at a slower rate in January than it did in December. In January, the Producer Price Index for the Net Output of Total Mining Industries was 126.2 (December 1984=100), 54.1 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries advanced 1.3 percent in January, following a 0.4- percent decline in December. Prices received by the petroleum refining and related products industry group increased 13.6 percent, after a 4.4-percent drop in the prior month. The industry group indexes for transportation equipment and for chemicals and allied products turned up in January. Prices for the printing, publishing, and allied industries group and the industry index for surgical, medical, and dental instruments and supplies rose at a faster pace in January than they did a month ago. On the other hand, prices received by the tobacco manufactures industry group edged down in January, after showing no change in December. The industry group index for leather and leather products turned down in January. In January, the Producer Price Index for the Net Output of Total Manufacturing Industries was 135.9 (December 1984=100), 3.2 percent above its year-ago level.

Services. Among service industries, prices received by the industries for operators and lessors of nonresidential buildings; engineering design, analysis, and consulting services; courier services (except by air); legal services; and general medical and surgical hospitals increased in January. By contrast, the industry indexes for radio broadcasting, local trucking without storage, passenger car rental, telephone communications (except radiotelephone), and wireless telecommunications decreased in January.

Recalculation of Seasonal Adjustment Factors

Effective with this release, seasonal adjustment factors have been recalculated to reflect price-movement patterns during 2002 for stage-of- processing (SOP) and commodity-grouping indexes. This routine annual recalculation may affect previously published seasonally adjusted indexes and percent changes for January 1998 through December 2002. Revised seasonally adjusted data for this period, as well as seasonal factors for commodity indexes to be used through December 2003, were released February 18, 2003. To request this information, 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.

The table below provides monthly seasonally adjusted percent changes for the three major SOP categories during 2002, based on former and recalculated seasonal factors.

NAICS Conversion

The net output price indexes will be converted from the 1987 Standard Industrial Classification (SIC) basis to the 2002 North American Industry Classification System (NAICS) basis with the February 2004 release of January 2004 indexes. The NAICS conversion involves major definitional changes to many of the currently published SIC-based indexes. After the conversion to NAICS, SIC-based indexes will no longer be produced or published. NAICS history will be available depending on the scope of the definitional changes between SIC and NAICS.

Resampling of Industries

Effective with this release, the Producer Price Index (PPI) includes data for 51 resampled industries. In addition, the sample for the computer manufacturing industry was expanded to include data for personal digital assistants. The Bureau of Labor Statistics periodically updates the sample of producers providing data for the PPI to reflect current conditions more accurately 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 with this release, PPIs for two service industries are introduced: Standard Industrial Classification (SIC) 6282, Investment Advice, and SIC 6412*, Insurance Agencies and Brokerages. The index data for SIC 6282 have a start date of June 2002, while the index data for SIC 6412 have a start date of December 2002. 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 semiannual update, see the January 2003 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.

Standard Industrial Classification (SIC) Code Industry

1041 Gold ores 1044 Silver ores 2033 Canned fruits, vegetables, preserves, jams, and jellies 2062 Cane sugar refining 2063 Beet sugar processing 2082 Malt beverages 2083 Malt 2096 Potato chips, corn chips, and similar snacks 2098 Macaroni, spaghetti, vermicelli, and noodles 2241 Narrow fabric mills 2251 Women's hosiery, except socks 2297 Nonwoven fabrics and related products 2325 Men's and boys' separate trousers and slacks 2326 Men's and boys' work clothing 2353 Hats, caps, and millinery 2387 Apparel belts 2393 Textile bags 2395 Pleating and stitching 2396 Automotive trimmings, apparel findings, and related products 2399 Fabricated textile products, not elsewhere classified 2493 Reconstituted wood products 2517 Wood television, radio, phonograph, and sewing machine cabinets 2519 Household furniture, not elsewhere classified 2655 Fiber cans, drums, and similar products

2676 Sanitary paper products 2731 Book publishing 2761 Manifold business forms 2791 Typesetting 2833 Medicinal chemicals and botanical products (in bulk) 2999 Products of petroleum and coal, not elsewhere classified 3085 Plastic bottles 3142 House slippers 3143 Men's footwear 3144 Women's footwear 3149 Footwear, except rubber, not elsewhere classified 3498 Fabricated pipe and fabricated pipe fittings 3523 Farm machinery and equipment 3541 Machine tools, metal cutting types 3542 Metal forming machine tools 3544 Special tools, dies, jigs, fixtures, and industrial molds 3571 Electronic computers 3631 Household cooking equipment and parts 3632 Household refrigerators and home and farm freezers 3633 Household laundry equipment 3672 Printed circuit boards 3675 Capacitors for electronic circuitry 3845 Electromedical equipment 3942 Dolls and stuffed toys 3955 Carbon paper and inked ribbons 6282 Investment advice** 6412 Insurance agencies and brokerages ** 6512 Operators and lessors of nonresidential buildings 7311 Advertising agencies 8721 Accounting, auditing, and bookkeeping

* This industry code is PPI constructed and corresponds to SIC 6411. ** For further discussion of these industries, see "New Producer Price Index for the Investment Advice Industry -- SIC 6282" and "New Producer Price Index for the Insurance Agencies and Brokerages Industry -- SIC 6412" in the January 2003 issue of the PPI Detailed Report or call the Section of Index Analysis and Public Information at (202) 691-7705.