June 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 0.5 percent in June, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This index decreased 0.3 percent in May and 1.9 percent in April. At the earlier stages of processing, prices received by manufacturers of intermediate goods rose 0.5 percent, compared with a 0.8-percent decline in the preceding month. The index for crude materials jumped 4.5 percent in June, after increasing at a 1.7-percent rate a month earlier. (See table A.)

The rise in the finished goods index in June can be largely attributed to price increases for finished energy goods, which climbed 3.4 percent following a 2.6-percent decrease in May. Among finished goods other than energy, prices for finished consumer foods rose at a 0.4-percent rate in June, after inching up at a 0.1-percent rate in the prior month. By contrast, the index for finished goods other than foods and energy edged down 0.1 percent, following a 0.1-percent gain in May.

During the first six months of 2003, the finished goods index moved up at a seasonally adjusted annual rate of 4.8 percent, compared with a 1.0- percent rate of increase during the latter half of 2002. Within the finished goods category, prices for finished consumer foods went up at a 7.6-percent seasonally adjusted annual rate from December 2002 to June 2003, after increasing at a 0.4-percent rate from June 2002 to December 2002. Following a 12.0-percent rate of advance during the second half of 2002, the index for finished energy goods rose at a seasonally adjusted annual rate of 19.2 percent in the first half of 2003. Prices for finished goods other than foods and energy rose at a 0.5-percent seasonally adjusted annual rate over the first half of 2003, after falling at a 1.1-percent rate in the latter half of 2002. Among crude and partially processed goods, the index for intermediate materials, supplies, and components climbed at a seasonally adjusted annual rate of 5.5 percent from December 2002 to June 2003, compared with a 3.5-percent rate of increase in the previous 6-month period. Crude material prices jumped 30.6 percent on a seasonally adjusted annual rate basis during the first half of 2003, after rising at a 28.4-percent rate in the second half of 2002. (See summary below.)

Crude materials for further processing 35.5 -32.5 24.7 30.6 36.4 172.3 -37.4 Foodstuffs and feedstuffs 7.4 -7.6 4.5 14.0 10.9 15.8 12.2 Crude energy materials 85.6 -52.9 61.5 62.1 88.0 604.2 -62.7 Crude nonfood materials less energy -5.5 -9.9 12.6 3.8 7.7 19.6 -9.9 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.

Before seasonal adjustment, the Producer Price Index for Finished Goods advanced 0.7 percent in June to 143.1 (1982 = 100). From June 2002 to June 2003, the finished goods index moved up 2.9 percent. During the same period, prices for finished energy goods increased 15.3 percent and the index for finished consumer foods rose 3.9 percent. On the other hand, prices for finished goods other than foods and energy declined 0.3 percent over the 12-month period ended in June. Earlier in the pipeline, the index for intermediate goods rose 4.5 percent, while prices received by crude goods producers jumped 29.4 percent during the same period.

Finished goods

The index for finished energy goods advanced 3.4 percent in June, after posting a 2.6-percent decrease a month earlier. Gasoline prices, which jumped 7.6 percent in June following an 11.1-percent drop in May, led the reversal in the finished energy goods index. Prices for home heating oil, residential electric power, and diesel fuel also turned up in June. The residential natural gas index rose more in June than it did in May. On the other hand, the index for lubricating and similar oils showed no change, following a 1.8-percent increase in the prior month.

Prices for finished consumer foods climbed at a quicker pace in June than in May -- 0.4 and 0.1 percent, respectively. The index for beef and veal went up 6.7 percent, after advancing 1.8 percent a month earlier. Prices for soft drinks and processed young chickens also increased more quickly than they did in May. The indexes for pork, roasted coffee, and eggs for fresh use rose in June, after falling in May. The index for finfish and shellfish decreased more slowly in June than it did in the previous month. Conversely, the index for fresh and dry vegetables decreased 14.1 percent, following a 2.5-percent decline in the preceding month. Prices for dairy products also fell at a faster rate in June. The indexes for bakery products, confectionery end products, and processed turkeys turned down, after moving up in May.

Prices for finished consumer goods other than foods and energy inched down at a 0.1-percent rate in June, following a 0.1-percent advance in May. The index for light motor trucks dropped 1.5 percent, compared with a 0.3- percent gain in the prior month. Prices for sanitary papers and health products, passenger cars, newspaper circulation, and cigarettes also fell in June, after rising a month earlier. The book publishing index showed no change, following an increase in May. By contrast, prices for pharmaceutical preparations climbed 0.7 percent in June, compared with a 0.1-percent decline in the preceding month. The indexes for men's and boys' apparel; girls', children's, and infants' apparel; and floor coverings also turned up, after decreasing in May. During the first six months of 2003, prices for finished consumer goods other than foods and energy edged up at a seasonally adjusted annual rate of 0.5 percent, compared with a 1.5-percent rate of decline during the second half of 2002.

The capital equipment index moved down 0.1 percent in June, following a 0.1-percent advance in May. Price decreases for light motor trucks, communication and related equipment, passenger cars, x-ray and electromedical equipment, office and store machines and equipment, and electronic computers slightly outweighed rising prices for civilian aircraft, printing trades machinery, and integrating and measuring instruments. From December 2002 to June 2003, the capital equipment index rose at a 0.6-percent seasonally adjusted annual rate, after declining at a similar rate from June 2002 to December 2002.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 0.5 percent in June, after posting a 0.8-percent decline in May. Most of this upturn was due to a turnaround in the index for intermediate energy goods. Prices for materials for nondurable manufacturing and materials for durable manufacturing also rose in June, after falling in the previous month. The intermediate foods and feeds index moved up at a faster rate in June than in the prior month. Prices for materials and components for construction increased at the same pace in June as they did in May. The index for intermediate goods other than foods and energy showed no change in June, compared with a 0.1-percent decrease in May. (See table B.)

The index for intermediate energy goods rose 2.0 percent in June, following a 4.4-percent drop in the preceding month. The index for industrial natural gas turned up 6.5 percent, compared with a 4.5-percent decline in May. Prices for gasoline, diesel fuel, natural gas to electric utilities, and jet fuels also turned up in June, after decreasing in the prior month. The commercial natural gas index rose more in June than it did in the previous month. On the other hand, the index for commercial electric power fell 3.2 percent in June, following a 0.8-percent decrease in the prior month. The index for industrial electric power also declined at a faster rate than it did in May. The index for intermediate energy goods rose at a 19.4-percent seasonally adjusted annual rate during the first half of 2003, after rising at an 11.2-percent rate during the second half of 2002.

The index for materials for nondurable manufacturing moved up 0.4 percent in June, following a 0.9-percent decline in May. Primary basic organic chemical prices advanced 5.4 percent in June, after advancing 1.5 percent in the preceding month. The indexes for ethanol and for medicinal and botanical chemicals turned up in June. Prices for plastic resins and materials fell at a slower rate in June than they did in May. By contrast, the index for woodpulp declined 1.3 percent, after climbing 4.1 percent in May. The paperboard index also turned down in June. The index for intermediate basic organic chemicals dropped at a faster pace in June than it did in the previous month. Paper prices rose at a slower rate in June than they did in May. The index for materials for nondurable manufacturing advanced at an 8.2-percent seasonally adjusted annual rate from December 2002 to June 2003, after posting a 4.6-percent rate of increase from June 2002 to December 2002.

Prices for materials for durable manufacturing rose 0.3 percent in June, compared with a 0.2-percent decline in the previous month. The index for cold rolled steel sheet and strip moved up 0.8 percent, following a 2.9- percent decrease in May. Prices for aluminum mill shapes, copper and brass mill shapes, and plywood also turned up in June. The copper cathode and refined copper index rose at a faster rate in June than it did in May. Alternatively, prices for primary aluminum, except extrusion billet, fell 1.4 percent, after posting a 3.8-percent gain in May. The indexes for prepared paint, semifinished steel mill products, and precious metals also turned down in June. Hot rolled steel sheet and strip prices dropped at a faster pace in June than they did a month earlier. From December 2002 to June 2003, prices for materials for durable manufacturing advanced at a 1.1- percent seasonally adjusted annual rate, following a 3.1-percent rate of increase during the June 2002 to December 2002 period.

Following a 1.0-percent increase in May, prices for intermediate foods and feeds moved up 1.9 percent in June. Leading this acceleration, the index for crude vegetable oils jumped 23.7 percent, after rising 2.6 percent in May. The beef and veal index also rose at a faster rate in June than it did in the prior month. Prices for pork and for refined sugar and byproducts turned up in June. The confectionery materials index declined at a slower pace in June than it did in May. On the other hand, prepared animal feed prices edged up 0.1 percent in June, after posting a 1.7- percent increase a month earlier. The index for shortening and cooking oils also advanced at a slower rate than it did in the preceding month. Prices for flour and for natural, processed, and imitation cheese turned down in June. The index for intermediate foods and feeds increased at a 10.2-percent seasonally adjusted annual rate during the December 2002 to June 2003 period, following a 9.0-percent rate of increase over the prior six-month period.

The materials and components for construction index rose 0.1 percent in June, the same rate of change as in the previous month. The indexes for nonferrous wire and cable, plywood, hardwood lumber, fabricated structural metal products, and softwood lumber posted advancing prices in June. Declining prices were posted by the indexes for plastic construction products, gypsum products, concrete products, steel mill products, and mineral wool for structural insulation. The index for materials and components for construction increased at a 1.7-percent seasonally adjusted annual rate during the first half of 2003, after advancing at a 0.4-percent rate during the latter half of 2002.

Crude goods

The Producer Price Index for Crude Materials for Further Processing rose more in June than it did in the prior month -- 4.5 percent compared with 1.7 percent in May. June prices for crude energy materials increased at a quicker pace than they did in May. The index for basic industrial materials turned up, following three consecutive decreases. Conversely, prices for crude foodstuffs and feedstuffs fell, after rising in the prior month. (See table B.)

Prices for crude energy materials jumped 10.7 percent, following a 2.5- percent increase in May. Crude petroleum prices rose 12.3 percent in June, after falling 3.8 percent a month earlier. The natural gas index gained 11.8 percent, following a 6.6-percent increase in May. The coal index turned up 1.5 percent in June, compared with a 2.5-percent decrease in the prior month. Prices for crude energy materials rose at a 62.1-percent seasonally adjusted annual rate from December 2002 to June 2003, after increasing at a 60.8-percent rate in the previous 6-month period.

Prices for crude nonfood materials other than energy rose 0.6 percent in June, following a 1.9-percent decline in the prior month. The raw cotton index increased 1.3 percent, after falling 8.1 percent in May. The indexes for copper base scrap and aluminum base scrap also turned up in June. Wastepaper prices showed no change in June, after declining in May. On the other hand, the index for gold ores rose 4.7 percent, compared with a 6.4 percent advance in May. The phosphates index fell more in June than it did in the prior month. Pulpwood prices turned down in June. The index for basic industrial materials advanced at a 3.8-percent seasonally adjusted annual rate from December 2002 to June 2003, after rising at a 6.0- percent rate in the latter half of 2002.

The index for crude foodstuffs and feedstuffs declined 0.5 percent, following a 2.4-percent increase in the prior month. Slaughter cattle prices turned down 2.7 percent, compared with a 1.0-percent increase in May. The indexes for wheat, soybeans, fresh fruits and melons, and fluid milk also turned down in June. Prices for slaughter hogs and corn rose less in June than they did in May. By contrast, the index for slaughter broilers and fryers turned up 2.9 percent, after decreasing 2.8 percent in the prior month. Unprocessed finfish prices fell less in June than they did in the previous month. During the first half of 2003, the crude foodstuffs and feedstuffs index rose at a seasonally adjusted annual rate of 14.0 percent, after increasing at a 13.1-percent rate in the last half of 2002.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries rose 8.6 percent in June, following a 2.7-percent increase in the previous month. (Net output price indexes are not seasonally adjusted.) Prices received by the crude petroleum and natural gas industry advanced 11.8 percent, after moving up 1.4 percent in May. The industry indexes for natural gas liquids and natural gas residue and for crushed and broken limestone also climbed at a faster pace than they did in the preceding month. Prices received by the industries for copper ores and for bituminous coal and lignite surface mining turned up, following declines in the prior month. Alternatively, the industry index for gold ores rose 4.8 percent in June, compared with a 6.2-percent gain a month earlier. Prices received by the potash, soda, and borate minerals industry decreased, after moving up in May. During the first half of 2003, the Producer Price Index for the Net Output of Total Mining Industries advanced at an annual rate of 47.7 percent, compared with a 48.1-percent rate of increase in the second half of 2002. In June, this index was 138.3 (December 1984 = 100), 47.9 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries moved up 0.3 percent in June, following a 0.4- percent drop in the prior month. The petroleum refining and related products industry group index turned up 4.1 percent, compared with a 6.6- percent decline in the previous month. The industry group index for food and kindred products rose at a faster pace in June than it did in May. The chemicals and allied products industry group index fell less than it did a month earlier. The industry group indexes for textile mill products and for measuring and controlling instruments increased, after falling in the prior month. The industry group index for machinery (except electrical) showed no change, following a decline in May. On the other hand, the electrical and electronic machinery and equipment industry group index fell 0.7 percent in June, after posting a 0.2-percent gain a month earlier. The transportation equipment industry group index decreased at a quicker rate than it did in May. The industry group indexes for paper and allied products, printing and publishing, and rubber and miscellaneous plastic products turned down, after advancing in the previous month. From December 2002 to June 2003, the Producer Price Index for the Net Output of Total Manufacturing Industries rose at an annual rate of 3.3 percent, following a 0.6-percent annual rate of increase from June 2002 to December 2002. In June, this index was 136.2 (December 1984 = 100), 1.9 percent above its year-ago level.

Services. Among service industries in June, prices received by the industries for general medical and surgical hospitals, property and casualty insurance, scheduled air transportation, life insurance carriers, and real estate agents and managers rose. By contrast, the industry indexes for operators and lessors of nonresidential buildings; airports, flying fields, and airport services; wireless telecommunications; and offices of physicians fell in June.

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.