May 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 declined 0.3 percent in May, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decrease followed a record decline of 1.9 percent in April. At the earlier stages of processing, the index for intermediate goods moved down 0.8 percent, following a 2.2- percent drop in the preceding month. Prices for crude goods went up 1.7 percent in May, after falling 16.3 percent in April. (See table A.)

The index for finished energy goods fell 2.6 percent in May, after declining 8.6 percent in April. Prices for finished goods other than foods and energy inched up 0.1 percent in May, compared with a 0.9-percent decrease in April. By contrast, the index for finished consumer foods rose only 0.1 percent in May, following a 0.9-percent increase in April.

Before seasonal adjustment, the Producer Price Index for Finished Goods was unchanged from its level of 142.1 (1982 = 100) in April. From May 2002 to May 2003, prices for finished goods advanced 2.5 percent. During the same period, the index for finished energy goods jumped 11.9 percent, and prices for finished consumer foods rose 3.7 percent. Conversely, the index for finished goods other than foods and energy inched down 0.1 percent over the 12 months ended May 2003. Earlier in the pipeline, intermediate goods prices increased 4.2 percent and the crude goods index climbed 19.1 percent.

Finished goods

The index for finished energy goods fell 2.6 percent in May, after registering an 8.6-percent decline in April. Gasoline prices decreased at a slower rate in May than they did in April -- down 11.1 percent and 22.3 percent, respectively. The index for home heating oil also fell less than it did in April. Prices for liquefied petroleum gas and residential natural gas turned up in May, following declines in the preceding month. Conversely, the index for residential electric power moved down 0.4 percent, after rising 0.9 percent in April.

Subsequent to a 1.3-percent decrease in April, the index for finished consumer goods other than foods and energy went up 0.1 percent in May. Cigarette prices increased 0.2 percent, after falling 9.6 percent in the previous month. The indexes for light motor trucks, passenger cars, newspaper circulation, and compact discs also turned up in May. Prices for sanitary papers and health products rose at a faster pace than they did in April. On the other hand, the index for pharmaceutical preparations declined 0.1 percent in May, following a 0.8-percent gain in the preceding month. Prices for women's apparel, household appliances, floor coverings, and cosmetics and other toilet preparations also turned down in May.

The index for capital equipment edged up 0.1 percent, after posting a 0.5-percent decline in April. This upturn was largely due to prices for light motor trucks, which rose 0.3 percent in May following a 4.6-percent drop in April, and passenger cars, which increased 0.2 percent following a 2.6-percent decrease in the prior month. By contrast, prices for heavy motor trucks fell 0.8 percent, following a 0.1-percent dip in April. The index for civilian aircraft advanced less than it did in the previous month.

The index for finished consumer foods inched up 0.1 percent in May, after increasing 0.9 percent in April. In May, rising prices for fresh fruits and melons, beef and veal, confectionery end products, soft drinks, bakery products, and shortening and cooking oils slightly outweighed falling prices for finfish and shellfish, fresh and dry vegetables, dairy products, and eggs for fresh use.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components declined 0.8 percent in May, after dropping 2.2 percent in the previous month. Prices for intermediate energy goods fell less in May than they did in April. The intermediate foods and feeds index increased at a faster rate than it did in the prior month. Prices for nondurable manufacturing materials decreased at a slightly slower pace than they did in April. By contrast, the index for materials for durable manufacturing moved down in May, after showing no change a month earlier. Prices for materials and components for construction rose less than they did in the previous month. The index for intermediate goods other than foods and energy inched down 0.1 percent, after showing no change in April. (See table B.)

The rate of decrease for intermediate energy goods prices slowed from 11.2 percent in April to 4.4 percent in May. The index for jet fuels declined 8.3 percent, after plummeting 33.4 percent in the prior month. Prices for natural gas to electric utilities, gasoline, industrial natural gas, home heating oil, residual fuel, and diesel fuel also fell at a slower pace than they did in April. The indexes for commercial natural gas and liquefied petroleum gas turned up, after posting declines in the previous month. On the other hand, commercial electric power prices moved down 0.8 percent in May, compared with a 1.6-percent gain a month earlier. The index for industrial electric power also decreased, after rising in the prior month.

Intermediate foods and feeds prices rose 1.0 percent in May, after edging up 0.1 percent in the previous month. Accounting for the majority of this acceleration, the index for prepared animal feeds jumped 1.7 percent, compared with a 0.7-percent decline in April. Prices for crude vegetable oils, flour, and processed young chickens also turned up, after falling in the prior month. The index for beef and veal rose more than it did in April. By contrast, the index for dairy products moved down 0.4 percent in May, compared with a 0.7-percent gain a month earlier. Prices for confectionary materials and for refined sugar and sugar byproducts also declined, after moving up in the previous month.

Prices for materials for nondurable manufacturing fell 0.9 percent in May, following a 1.0-percent decline in the previous month. In May, decreasing prices for plastic resins and materials, ethanol, intermediate basic organic chemicals, medicinal and botanical chemicals, and inedible fats and oils outweighed rising prices for liquid refinery gases, alkalies and chlorine, woodpulp, and paper.

The index for materials for durable manufacturing declined 0.2 percent in May, after showing no change in the prior month. Prices for steel mill products moved down 0.9 percent, compared with a 0.1-percent decrease in the previous month. The indexes for building paper and board and hardwood lumber increased less than they did in April. Prices for aluminum mill shapes and for copper and brass mill shapes turned down, following gains in the prior month. Alternatively, primary nonferrous metal prices advanced 0.8 percent in May, after dropping 4.4 percent in the previous month. The index for cement also turned up, following a decline in April. Prepared paint prices rose in May, after showing no change a month earlier.

The index for materials and components for construction edged up 0.1 percent in May, following a 0.2-percent gain in the prior month. In May, increasing prices for asphalt felts and coatings, architectural coatings, nonferrous wire and cable, concrete products, and hardwood lumber outweighed decreasing prices for plastic construction products, treated wood, steel mill products, fabricated structural metal products, and paving mixtures and blocks.

Crude goods

The Producer Price Index for Crude Materials for Further Processing advanced 1.7 percent in May, compared with a 16.3-percent drop in the prior month. The index for crude energy materials turned up, following a decline in April. Prices for foodstuffs and feedstuffs increased at a faster pace in May than they did in April. Conversely, the basic industrial materials index fell more in May than it did in the previous month. (See table B.)

Prices for crude energy materials increased 2.5 percent in May, following a 31.1-percent drop in the preceding month. Leading this upturn, the natural gas index rose 6.6 percent, after posting a 39.1-percent decline in April. Prices for crude petroleum dropped 3.8 percent in May, after falling 21.5 percent a month earlier. By contrast, the index for coal declined 2.5 percent, following a 3.7-percent gain in April.

The index for crude foodstuffs and feedstuffs moved up 2.4 percent in May, after rising 0.9 percent in the previous month. Slaughter hog prices advanced 24.1 percent, compared with an 8.4-percent decrease in April. Prices for wheat and fluid milk also turned up in May. The slaughter broilers and fryers index declined at a slower rate in May than it did in the prior month. The index for fresh fruits and melons advanced at a faster pace in May than it did in April. Partially offsetting the acceleration in prices for crude foodstuffs and feedstuffs, prices for slaughter cattle rose 1.0 percent in May, following a 3.4-percent increase in the preceding month. The indexes for corn and soybeans also increased at a slower rate in May than they did a month earlier. Prices for unprocessed finfish and fresh vegetables (except potatoes) turned down, after increasing in April.

Prices for crude nonfood materials other than energy declined 1.9 percent in May, following a 1.3-percent drop in the preceding month. The iron and steel scrap index fell 6.6 percent, after declining 1.9 percent in April. Prices for aluminum base scrap and for hides and skins also moved down at a faster rate in May than they did a month earlier. The indexes for wastepaper, phosphates, and raw cotton turned down in May, after posting gains in April. By contrast, gold ore prices turned up 6.4 percent in May, compared with a 6.3-percent decrease in April. The index for hardwood logs, bolts, and timber rose at a faster pace in May than it did in the prior month. The softwood logs, bolts, and timber index fell at a slower rate than it did in April.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries moved up 2.7 percent in May, after plummeting 27.5 percent in the prior month. (Net output price indexes are not seasonally adjusted.) Prices received by the crude petroleum and natural gas industry rose 1.4 percent, compared with a 34.2-percent drop in April. The industry indexes for natural gas liquids and natural gas residue, gold ores, and oil and gas well drilling also turned up, after declining in the preceding month. By contrast, the industry index for bituminous coal and lignite surface mining fell 1.7 percent in May, following a 2.1-percent gain in the previous month. Prices received by the copper ores and bituminous coal underground mining industries fell more than they did in April. In May, the Producer Price Index for the Net Output of Total Mining Industries was 127.3 (December 1984 = 100), 26.9 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries declined 0.4 percent in May, following a 1.8- percent drop in the preceding month. The petroleum refining and related products industry group index fell 6.6 percent, after posting an 18.7- percent decline in April. The industry group index for transportation equipment also fell at a slower rate in May than it did a month earlier. The tobacco manufactures industry group index turned up in April. The industry group index for food and kindred products rose at a faster pace in May than it did in April. On the other hand, the industry group index for chemicals and allied products declined 0.9 percent in May, after advancing 2.0 percent in the previous month. The industry group indexes for machinery (except electrical) and textile mill products also turned down, following increases in April. The rubber and miscellaneous plastic products industry group index moved up at a slower pace in May than it did a month earlier. In May, the Producer Price Index for the Net Output of Total Manufacturing Industries was 135.8 (December 1984 = 100), 1.7 percent above its year-ago level.

Services. Among service industries in May, prices received by the industries for deep sea foreign transportation of freight; property and casualty insurance; scheduled air transportation; wireless telecommunications; and accounting, auditing, and bookkeeping services increased. Alternatively, the industry indexes for general medical and surgical hospitals, operators and lessors of nonresidential buildings, prepackaged software, hotels and motels, and trucking (except local) fell in May.

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.