February 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 climbed 1.0 percent in February, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 1.6-percent advance in January and a 0.1-percent decline in December. At the earlier stages of processing, prices received by intermediate goods manufacturers rose 2.1 percent in February, following a 1.3-percent increase in the prior month. The crude goods index advanced 4.8 percent, compared with a 6.9- percent jump in January. (See table A.)

2003 Jan. 1.6 1.6 4.8 .9 2.8 1.3 6.9 Feb. 1.0 .6 7.4 -.5 3.5 2.1 4.8 r=revised. Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for October 2002 have been revised to reflect the availability of late reports and corrections by respondents.

Much of the February increase in the Producer Price Index for Finished Goods was due to prices for finished energy goods, which moved up 7.4 percent compared with a 4.8-percent gain in January. Excluding prices for energy goods, the finished goods index decreased 0.3 percent in February. The finished consumer foods index increased 0.6 percent in February, after posting a 1.6-percent gain in the prior month. By contrast, the index for finished goods other than foods and energy turned down 0.5 percent, following a 0.9-percent increase in January. The February decline was largely due to the decrease in the light motor trucks index. (Excluding prices for light motor trucks, the index for finished goods other than foods and energy edged down 0.1 percent in February.)

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.9 percent in February to 142.5 (1982=100). From February 2002 to February 2003, prices for finished goods rose 3.5 percent. This increase was due to a 24.8-percent jump in the index for finished energy goods. Prices for finished goods other than foods and energy inched up 0.1 percent over the 12 months ended February 2003, while the index for finished consumer foods showed no change. At the earlier stages of processing, prices received by producers of intermediate goods increased 6.7 percent, and the index for crude goods advanced 36.8 percent.

2003 Jan. 1.3 6.1 .3 4.5 5.4 11.0 1.0 29.3 Feb. .7 8.5 .7 6.7 .7 9.3 2.7 36.8 r=revised. Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for October 2002 have been revised to reflect the availability of late reports and corrections by respondents.

Finished goods

Prices for finished energy goods jumped 7.4 percent in February, following a 4.8-percent increase in January. Over half of February's rise was due to price increases for gasoline, which rose 18.8 percent after registering a 13.7-percent advance in January. The indexes for residential natural gas, residential electric power, home heating oil, and liquefied petroleum gas also rose at a faster pace in February than they did in the prior month.

Prices for finished consumer foods rose 0.6 percent in February, after posting a 1.6-percent gain in January. The indexes for beef and veal, pork, and bakery products also advanced at a slower pace then they did in the previous month. February's indexes for fresh and dry vegetables and dairy products turned down, while soft drink prices fell more rapidly in February than they did in the prior month. By contrast, after rising 3.9 percent in January, prices for processed young chickens increased 6.6 percent. The indexes for eggs for fresh use, fresh fruits and melons, and confectionery end products also rose more than in January.

The index for finished consumer goods other than foods and energy fell 0.5 percent in February, following a 0.9-percent increase in the prior month. Prices charged by manufacturers for light motor trucks decreased 3.9 percent, after rising 4.1 percent in January. The indexes for passenger cars, pharmaceutical preparations, periodical circulation, and household appliances also fell, following increases in the previous month. Conversely, newspaper circulation prices turned up 1.9 percent in February, after edging down 0.1 percent in the prior month. The indexes for soaps and synthetic detergents and for lawn and garden equipment also turned up in February. Prices for cigarettes showed no change, following decreases in January.

February prices for capital equipment declined 0.4 percent, compared with an increase of 0.7 percent in January. The indexes for light motor trucks, passenger cars, and construction machinery and equipment decreased, after rising in the prior month. Prices for electronic computers fell at a faster pace in February than they did in January. In contrast, the index for communication and related equipment climbed 0.5 percent, following a January increase of 0.2 percent. Prices for integrating and measuring instruments, ships, and tools and dies rose, after falling in the prior month.

Intermediate goods

The index for Intermediate Materials, Supplies, and Components rose 2.1 percent in February, following a 1.3-percent gain in the prior month. A faster rate of increase in prices for both intermediate energy goods and nondurable manufacturing materials accounted for most of the acceleration in the index for intermediate goods. Durable manufacturing material prices also advanced at a faster rate than they did in January. By contrast, the index for intermediate foods and feeds increased less in February than it did a month earlier. Prices for materials and components for construction rose at the same pace as they did in January. Excluding foods and energy, the index for intermediate goods moved up 0.7 percent in February, compared with a 0.3-percent gain in the prior month. (See table B.)

The index for intermediate energy goods rose 8.5 percent in February, after advancing 6.1 percent in the previous month. Prices for natural gas to electric utilities jumped 26.4 percent, following a 4.3-percent increase in January. The indexes for gasoline, diesel fuel, residual fuel, home heating oil, and commercial natural gas also advanced at a faster pace than they did in the prior month. On the other hand, jet fuel prices moved up 10.4 percent in February, after increasing 25.9 percent in the previous month. The indexes for industrial natural gas and commercial electric power also increased less than they did in January.

Prices for nondurable manufacturing materials increased 3.4 percent in February, compared with a 1.4-percent gain a month earlier. The primary basic organic chemicals index rose 19.3 percent, after moving up 8.3 percent in the prior month. Prices for plastic resins and materials, intermediate basic organic chemicals, and nitrogenates also advanced at a faster rate in February than they did a month earlier. The indexes for basic inorganic chemicals and processed yarns and threads turned up, after falling in January. Partially counteracting these accelerating prices, the ethanol index rose 3.9 percent, following a 15.2-percent increase in January. The medicinal and botanical chemicals index also rose less than it did in the prior month. Prices for finished fabrics, inedible fats and oils, synthetic rubber, and stemmed and redried tobacco turned down in February, after moving up in January.

After rising 0.1 percent in January, durable manufacturing goods prices advanced 0.6 percent in February. The index for hot rolled steel sheet and strip turned up 0.3 percent, following a 1.7-percent decrease in the previous month. Prices for primary aluminum (except extrusion billet), aluminum mill shapes, and prepared paint also moved up, after falling in January. The indexes for building paper and board and for copper and brass mill shapes rose at a faster rate then they did in the prior month. Alternatively, hot rolled steel bars, plates, and structural shapes prices declined 0.7 percent in February, following a 0.9-percent gain a month earlier. The indexes for cold rolled steel sheet and strip and for gold advanced at a slower pace than they did in January. Prices for adhesives and sealants and for silver turned down, after moving up in the previous month.

The intermediate foods and feed index moved up 0.7 percent in February, following a 1.3-percent increase in the prior month. Prices for beef and veal and for pork also rose less than they did in January. The index for crude vegetable oils turned down, after rising a month earlier. The indexes for fluid milk products and for dry, condensed, and evaporated milk products decreased more than they did in the previous month. By contrast, prices for confectionery materials turned up 3.0 percent in February, compared with a 0.4-percent decline in the prior month. The indexes for processed young chickens and refined sugar increased at a faster pace in February than they did a month earlier. Prices for natural, processed, and imitation cheese and snack chips turned up, following decreases in January. The shortening and cooking oils index fell less than it did in the prior month.

The index for materials and components for construction increased at the same rate in February as it did in January -- 0.3 percent. Rising prices for paving mixtures and blocks, steel mill products, concrete products, asphalt felts and coatings, heating equipment, and millwork outweighed falling prices for fabricated structural metal products, nonferrous wire and cable, treated wood, softwood lumber, and plumbing fixtures and brass fittings.

Crude goods

The Producer Price Index for Crude Materials for Further Processing advanced at a 4.8-percent rate in February, following a 6.9-percent increase in January. Prices for crude foodstuffs and feedstuffs and crude energy materials rose at a slower pace, compared with a month earlier. Conversely, the index for crude nonfood materials less energy rose more quickly in February than it did in January. (See table B.)

Price increases for crude foodstuffs and feedstuffs slowed to a 0.7- percent rate in February from a 5.4-percent rate in January. The index for slaughter broilers and fryers moved up 1.4 percent, following a 21.8- percent jump in the prior month. Prices for slaughter cattle, fluid milk, and fresh vegetables, except potatoes turned down in February, after rising in January. By contrast, corn prices increased 8.1 percent, compared with a 2.4-percent decline in the previous month. The indexes for wheat and soybeans also turned up in February.

The index for crude energy materials rose 9.3 percent, following an 11.0-percent advance a month earlier. Subsequent to a 20.4-percent increase in January, crude petroleum prices moved up 10.0 percent in February. The coal index fell 2.8 percent, after a 1.9-percent gain in January. On the other hand, natural gas prices jumped 11.5 percent in February, compared with an 8.2-percent advance in the preceding month.

The index for crude nonfood materials less energy, which rose 1.0 percent in January, increased 2.7 percent in February. Much of this acceleration can be traced to prices for iron and steel scrap; an 11.7- percent advance followed a 0.9-percent gain in the previous month. The indexes for wastepaper; aluminum base scrap; hides and skins; construction sand, gravel, and crushed stone; and softwood logs, bolts, and timber turned up, after falling in January. Raw cotton prices rose more quickly in February than they did a month earlier. Conversely, the index for gold ores grew at a slower pace in February compared with January -- 1.5 percent and 8.8 percent, respectively. Leaf tobacco prices decreased more than they did in the prior month.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries climbed 8.9 percent in February, following a 9.2-percent rise in January. (Net output price indexes are not seasonally adjusted.) The index for the crude petroleum and natural gas industry advanced 14.1 percent in February, following an 18.8-percent gain in January. Prices received by the bituminous coal and lignite surface mining industry and the iron ores industry turned down in February. The industry indexes for gold ores, underground bituminous coal mining, and crushed and broken limestone rose at a slower pace in February than they did a month earlier. By contrast, the industry index for natural gas liquids and natural gas residue posted an 8.1-percent increase, after rising 3.2 percent in January. Prices received by the oil and gas well drilling industry also rose at a faster pace in February than they did in January. The industry index for oil and gas field exploration services turned up in February. The Producer Price Index for the Net Output of Total Mining Industries was 137.4 (December 1984=100) in February, 76.2 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries increased 1.4 percent in February, following a 1.3- percent gain in January. An 18.8-percent jump in the petroleum refining and related products industry group index led February's increase. The industry group indexes for food and kindred products; chemicals and allied products; lumber and wood products (except furniture); and printing, publishing, and allied industries also posted rising prices in February. Slightly tempering these increases, the industry group indexes for transportation equipment; machinery (except electrical); electrical and electronic machinery, equipment, and supplies; and textile mill products registered declining prices. In February, the Producer Price Index for the Net Output of Total Manufacturing Industries was 137.8 (December 1984=100), 4.4 percent higher than its year-ago level.

Services. Among service industries, prices received by the industries for general medical and surgical hospitals, property and casualty insurance, hotels and motels, and life insurance carriers advanced in February. Alternatively, the industry indexes for scheduled air transportation; engineering design, analysis, and consulting services; wireless telecommunications; deep sea foreign transportation of freight; and freight transportation arrangement dropped in February.

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. Historical index data based on the NAICS publication structure will be available depending on the scope of the definitional changes between SIC and NAICS.