March 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 advanced 1.5 percent in March, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 1.0-percent gain in February and a 1.6-percent rise in January. At the earlier stages of processing, prices for intermediate goods moved up 2.0 percent, after increasing 2.1 percent in the prior month. The crude goods index jumped 13.3 percent, following a 4.8-percent gain in February. (See table A.)

Over half of the March increase in the Producer Price Index for Finished Goods was due to prices for finished energy goods, which rose 5.7 percent after advancing 7.4 percent in February. Most of the remaining upward movement in March's finished goods index can be traced to a 0.7- percent increase in prices for finished goods other than foods and energy, reflecting higher prices for passenger cars and light motor trucks. The finished consumer foods index edged up 0.1 percent in March, after climbing 0.6 percent in February.

During the first quarter of 2003, prices for finished goods advanced at a seasonally adjusted annual rate of 17.4 percent, after rising at a 1.2- percent rate during the final three months of 2002. Excluding prices for foods and energy, the finished goods index increased at a 4.6-percent seasonally adjusted annual rate for the three months ended March 2003, following a 1.3-percent rate of decline in the last quarter of 2002. Among prices for raw and partially processed goods, the intermediate goods index moved up at a 23.8-percent seasonally adjusted annual rate during the first quarter of 2003, after advancing at a 1.9-percent rate in the last three months of 2002. The seasonally adjusted annual rate of increase for crude goods prices accelerated from 43.0 percent to 159.9 percent from the final quarter of 2002 to the first quarter of 2003. (See summary below.)

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 1.4 percent to 144.5 (1982 = 100). From March 2002 to March 2003, prices for finished goods rose 4.2 percent. During the same period, the finished energy goods index jumped 26.5 percent and prices for finished goods other than foods and energy moved up 0.9 percent. By contrast, the index for finished consumer foods declined 0.6 percent for the 12 months ended March 2003. At the earlier stages of processing, intermediate goods prices climbed 8.0 percent and the crude goods index soared 47.3 percent.

Crude materials for further processing 35.5 -32.5 26.1 4.3 20.9 43.0 159.9 Foodstuffs and feedstuffs 7.4 -7.6 4.4 -26.3 15.4 10.9 15.8 Crude energy materials 85.6 -52.9 66.1 40.1 37.5 110.8 528.0 Crude nonfood materials less energy -5.5 -9.9 12.4 30.2 4.4 7.1 20.3 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

Prices for finished energy goods moved up 5.7 percent in March, following a 7.4-percent increase in the previous month. The gasoline index rose 4.6 percent, after jumping 18.8 percent in February. Prices for liquefied petroleum gas, home heating oil, diesel fuel, and kerosene also advanced at a slower pace than they did a month earlier. By contrast, the rate of increase in the index for residential natural gas accelerated from 4.8 percent in February to 15.2 percent in March. Prices for residential electric power also rose more than they did in the prior month. The finished energy goods index surged at a 100.1-percent seasonally adjusted annual rate from December 2002 to March 2003, after advancing at a 6.8- percent rate in the final quarter of 2002.

Prices for finished consumer goods other than foods and energy turned up 0.7 percent in March, after falling 0.5-percent in the previous month. The light motor trucks index rose 5.2 percent, compared with a 3.9-percent decrease in February. Prices charged by passenger car manufacturers rose 3.3 percent in March, following a 0.6-percent decline in the prior month. February price declines preceded March increases for women's apparel, pharmaceutical preparations, alcoholic beverages, and men's and boys' apparel. The index for cigarettes moved up, after showing no change in February. On the other hand, prices for sanitary papers and health products dropped 5.2 percent in March, compared with a 0.1-percent decrease a month earlier. The newspaper circulation index showed no change, after going up in the previous month. Prices for soaps and synthetic detergents and jewelry (platinum and karat gold) turned down, following February increases. Prices for finished consumer goods excluding foods and energy advanced at a 4.4-percent seasonally adjusted annual rate in the first quarter of 2003, after posting a 0.8-percent rate of decline in the last quarter of 2002.

The capital equipment index increased 0.8 percent in March, following a 0.4-percent decline in the prior month. Prices for light motor trucks, passenger cars, x-ray and electromedical equipment, and printing trades machinery also advanced, following decreases in the previous month. The electronic computer and heavy motor truck indexes fell less in March than they did in February, while civilian aircraft prices climbed at a quicker rate than they did a month earlier. Partially offsetting these accelerating prices for capital equipment, the communication and related equipment index turned down 0.4 percent in March, compared with a 0.5- percent gain in the previous month. Prices for commercial furniture and plastic working machinery also fell, after rising in February. The March index for integrating and measuring instruments rose less than it did in the prior month. During the first three months of 2003, the capital equipment index rose at a 4.7-percent seasonally adjusted annual rate, compared with a 1.7-percent rate of decrease in the fourth quarter of 2002.

The finished consumer foods index inched up 0.1 percent in March, following a 0.6-percent increase in the previous month. Rising prices for fresh and dry vegetables, processed young chickens, eggs for fresh use, and for finfish and shellfish outweighed falling prices for fresh fruits and melons, pork, dairy products, processed fruits and vegetables, processed turkeys, and bakery products. The index for finished consumer foods increased at a 9.2-percent seasonally adjusted annual rate in the first quarter of 2003, after moving up at a 5.0-percent rate in the last three months of 2002.

Intermediate goods

The index for Intermediate Materials, Supplies, and Components advanced 2.0 percent in March, after rising 2.1 percent in February. Price increases for intermediate energy goods and nondurable manufacturing materials more than offset declining prices for materials for durable manufacturing, materials and components for construction, and intermediate foods and feeds in March. The index for intermediate goods other than foods and energy went up 0.2 percent in March, after rising 0.7 percent in February. (See table B.)

The index for intermediate energy goods jumped 10.2 percent in March, following an 8.5-percent advance in the prior month. Prices for utility natural gas led this acceleration. Industrial natural gas prices increased 24.8 percent, after rising 6.1 percent; the commercial natural gas index advanced 20.2 percent, compared with a 5.1-percent gain in February; and prices for natural gas to electric utilities surged 54.7 percent in March, following a 26.4-percent increase in February. Likewise, the indexes for industrial electric power and jet fuels rose at a faster pace in March than they did in the previous month. By contrast, the index for gasoline increased 4.6 percent in March, following an 18.8-percent gain in February. Prices for diesel fuel, residual fuel, liquefied petroleum gas, and home heating oil also rose at a slower rate in March than they did a month earlier. Prices for intermediate energy goods advanced at a 158.9-percent seasonally adjusted annual rate from December 2002 to March 2003, after registering a 5.0-percent rate of increase during the previous three months.

The index for materials for nondurable manufacturing increased 0.7 percent in March, after climbing 3.4 percent in the preceding month. Prices for primary basic organic chemicals rose 1.0 percent, compared with a 19.3-percent gain in February. The indexes for plastic resins and materials and paperboard turned down in March. Prices for both finished fabric and gray fabric dropped at a faster pace in March than they did in the previous month. On the other hand, the fertilizer materials index rose at a faster rate in March than it did in February. Prices for ethanol and medicinal and botanical chemicals also moved up at a faster pace in March. The indexes for inedible fats and oils and synthetic rubber turned up in March. From December 2002 to March 2003, the index for materials for nondurable manufacturing advanced at a 24.4-percent seasonally adjusted annual rate, following a 0.6-percent annual rate of increase during the final quarter of 2002.

After posting a 0.6-percent gain in February, the index for materials for durable manufacturing fell 0.3 percent. Hot rolled steel sheet and strip prices turned down 2.0 percent in March, following a 0.3-percent increase in the prior month. The index for primary nonferrous metals (except precious) advanced at a slower pace in March than it did a month earlier. Prices for building paper and board and for copper and brass mill shapes turned down in March. On the other hand, the index for hot rolled steel bars, plates, and structural shapes advanced 0.9 percent, after posting a 0.7-percent decline in February. Prices for semi-finished steel mill products and flat glass also turned up in March. The index for materials for durable manufacturing increased at a seasonally adjusted annual rate of 1.6 percent during the first quarter of 2003, after rising at a 2.6-percent annual rate in the previous quarter.

The index for materials and components for construction turned down 0.1 percent in March, after posting a 0.3-percent rise in the preceding month. Paving mixture and block prices inched down 0.1 percent, following a 4.1-percent gain in February. The index for softwood lumber fell at faster rate in March than it did in the previous month. Prices for steel mill products, gypsum products, and mineral wool for structural insulation turned down in March. Alternatively, the index for plastic construction products rose 0.7 percent, compared with a 0.1-percent increase in February. Prices for fabricated structural metal products and nonferrous wire and cable turned up in March. The asphalt felts and coatings index advanced at a faster pace in March than it did in February. During the first quarter of 2003, prices for materials and components for construction advanced at a 2.1-percent seasonally adjusted annual rate, following a 1.3- percent annual rate of decline during the prior quarter.

Subsequent to a 0.7-percent gain in February, the index for intermediate foods and feeds declined 0.2 percent in March. Beef and veal prices turned down 0.2 percent in March, after rising 2.2 percent in the prior month. The indexes for confectionery materials, flour, and pork also turned down in March. By contrast, dry milk product prices fell 0.2 percent, following a 6.7-percent decline in February. The indexes for fluid milk products and crude vegetable oils decreased at a slower rate in March than they did a month earlier. From December 2002 to March 2003, prices for intermediate foods and feeds rose at a 6.9-percent seasonally adjusted annual rate, after increasing at a 5.9-percent annual rate for the previous quarter.

Crude goods

The Producer Price Index for Crude Materials for Further Processing climbed 13.3 percent in March, following a 4.8-percent increase in February. This is the ninth consecutive gain in crude goods prices and their largest rise since a 17.4-percent advance in January 2001. March's acceleration for the crude goods index was due to prices for crude energy materials, which also rose at a faster pace than they did in February. By contrast, the index for crude foodstuffs and feedstuffs turned down in March, while prices for basic industrial materials advanced at a slower rate than they did a month earlier. (See table B.)

The crude energy materials index moved up 30.5 percent, after advancing 9.3 percent in the previous month. Natural gas prices rose 51.0 percent in March, the largest increase since a 56.4-percent jump in November 2001. In February, natural gas prices rose 11.5 percent. Coal prices turned up 1.0 percent, following a 2.8-percent decline in the preceding month. On the other hand, the crude petroleum index advanced 3.3 percent in March, after rising 10.0 percent a month earlier. During the first quarter of 2003, prices for crude energy materials increased at a 528.0-percent seasonally adjusted annual rate, after rising at a 110.8- percent rate for the previous calendar quarter.

The index for crude foodstuffs and feedstuffs moved down 2.3 percent in March, compared with a 0.7-percent gain in February. Corn prices dropped 5.0 percent, after rising 8.1 percent in the previous month. The indexes for slaughter hogs, wheat, and slaughter broilers and fryers also turned down. Prices for fluid milk and slaughter cattle fell more quickly in March than they did a month earlier, while the March index for soybeans increased at a slower pace over the same period. Alternatively, prices for fresh and dry vegetables climbed 15.9 percent, following an 11.7-percent decline in the preceding month. The indexes for unprocessed shellfish and raw cane sugar rose at a faster rate in March than they did in the prior month. Subsequent to a 10.9-percent seasonally adjusted annual rate of advance during the fourth quarter of 2002, prices for crude foodstuffs and feedstuffs increased at a 15.8-percent rate during the first quarter of 2003.

The index for crude nonfood materials less energy, which rose 2.7 percent in February, increased 1.0 percent in March. Prices for iron and steel scrap advanced 5.1 percent, after jumping 11.7 percent in the previous month. Leaf tobacco prices fell at a faster rate in March than they did a month earlier. The indexes for nonferrous metal ores, hides and skins, and pulpwood turned down, following February gains. Price increases for raw cotton slowed in March. Conversely, the index for wastepaper moved up 8.1 percent, after rising 0.3 percent in the preceding month. Prices for phosphates and copper base scrap also advanced at a faster rate than they did in the prior month. For the calendar quarter ended March 2003, the index for crude nonfood materials less energy jumped at a 20.3-percent seasonally adjusted annual rate, which followed a 7.1-percent annual rate of increase in the calendar quarter ended December 2002.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries jumped 24.3 percent in March, following an 8.9-percent gain in February. (Net output price indexes are not seasonally adjusted.) The index for the natural gas liquids and natural gas residue industry climbed 36.5 percent in March, following an 8.1-percent rise in February. Prices received by the crude petroleum and natural gas industry and the bituminous coal underground mining industry also rose at a faster pace in March than they did a month earlier. The industry indexes for bituminous coal and lignite surface mining and for kaolin and ball clay turned up in March. By contrast, the industry index for oil and gas well drilling posted a 1.6- percent decline, after rising 0.7 percent in February. The industry indexes for gold ores, industrial sand, and anthracite mining turned down in March. In the first quarter of 2003, the Producer Price Index for the Net Output of Total Mining Industries rose at a 376.6-percent annual rate, compared with a 77.9-percent rate of increase in the last quarter of 2002. In March, this index was 170.8 (December 1984=100), 95.2 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries increased 0.8 percent in March, following a 1.4- percent advance in February. The petroleum refining and related products industry group index advanced 5.6 percent, after an 18.8-percent gain in the previous month. The industry group indexes for food and kindred products, paper and allied products, and lumber and wood products (except furniture) turned down in March. On the other hand, the industry group index for transportation equipment turned up 1.7 percent in March, following a 0.7-percent decline in the preceding month. The electrical and electronic machinery, equipment, and supplies index also turned up in March. The industry group indexes for rubber and miscellaneous plastic products and for chemicals and allied products rose at a faster rate in March than they did in February. In the first quarter of 2003, the Producer Price Index for the Net Output of Total Manufacturing Industries rose at a 15.1-percent annual rate, compared with a 2.6-percent rate of decline in the last quarter of 2002. In March, this index was 138.9 (December 1984=100), 4.6 percent above its year-ago level.

Services. Among service industries, prices received by the industries for property and casualty insurance, hotels and motels, general medical and surgical hospitals, and trucking, except local, increased in March. Alternatively, the industry indexes for life insurance carriers, operators and lessors of nonresidential buildings, prepackaged software, and passenger car rental fell 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.