July 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 inched up 0.1 percent in July, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.5-percent rise in June and a 0.3-percent decrease in May. At the earlier stages of processing, prices received by manufacturers of intermediate goods went up 0.2 percent in July, compared with a 0.5-percent gain in June. The index for crude materials declined 2.9 percent, after climbing 4.5 percent in the prior month. (See table A.)

The index for finished energy goods advanced 0.3 percent in July, following a 3.4-percent rise in June, and accounted for most of the slower rate of increase in finished goods prices. Prices for finished consumer foods moved down 0.2 percent, after rising 0.4 percent in the preceding month. By contrast, the index for finished goods other than foods and energy turned up 0.2 percent in July, following a 0.1-percent decrease a month earlier.

Before seasonal adjustment, the Producer Price Index for Finished Goods declined 0.1 percent in July to 143.0 (1982 = 100). From July 2002 to July 2003, the finished goods index moved up 3.0 percent. Over the same period, prices for finished energy goods increased 14.4 percent, the index for finished consumer foods rose 3.7 percent, and prices for finished goods other than foods and energy edged up 0.2 percent. Earlier in the pipeline, the index for intermediate goods climbed 4.4 percent and prices received by crude goods producers jumped 24.5 percent for the 12-month period ended in July.

Finished goods

The rate of increase in prices for finished energy goods slowed to 0.3 percent in July from a 3.4-percent rate in June. The gasoline index went up 3.6 percent, compared with a 7.6-percent gain in the previous month. Prices for home heating oil also rose less in July than they did a month earlier. The index for residential natural gas was unchanged, following a June increase. Prices for residential electric power and liquefied petroleum gas turned down in July.

The finished consumer foods index declined 0.2 percent in July, its first decrease in 10 months. The beef and veal index declined 5.6 percent in July, after rising 6.7 percent in the previous month. Prices for pork, roasted coffee, and for shortening and cooking oils also fell, following increases in June. The soft drinks index was unchanged in July, following an increase a month earlier. Finfish and shellfish prices fell more rapidly in July then they did in the preceding month. On the other hand, the dairy products index jumped 3.4 percent in July, compared with a 1.1- percent decrease in June. Prices for fresh fruits and melons and for bakery products also turned up in July. The index for fresh and dry vegetables fell less in July than it did in the prior month. Prices for eggs for fresh use rose at a faster rate than they did in June.

The capital equipment index climbed 0.4 percent in July, after inching down 0.1 percent in June. Light motor truck prices moved up 0.5 percent, following a 1.5-percent decline in the previous month. The indexes for communication and related equipment, passenger cars, office and store machines and equipment, and tools and dies also rose, after falling in June. Prices for civilian aircraft and for railroad equipment increased at a quicker pace in July than they did in the prior month. By contrast, the index for printing trades machinery decreased 0.7 percent, compared with a 1.7-percent rise in June. Prices for commercial furniture also turned down in July. The indexes for x-ray and electromedical equipment, electronic computers, and computer storage devices fell more than they did a month earlier.

Prices for finished consumer goods other than foods and energy inched up 0.1 percent in July, after falling at the same rate in June. In July, rising prices for pharmaceutical preparations, light motor trucks, passenger cars, book publishing, and for soaps and synthetic detergents slightly outweighed falling prices for home electronic equipment, textile housefurnishings, compact discs, sporting and athletic goods, and men's and boys' apparel.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components moved up 0.2 percent in July, following a 0.5-percent rise in the previous month. Prices for intermediate energy goods advanced at a slower pace than they did in the prior month. The indexes for materials for nondurable manufacturing, intermediate foods and feeds, and materials for durable manufacturing turned down, after increasing in June. Alternatively, prices for materials and components for construction rose more in July than they did a month earlier. The index for intermediate goods other than foods and energy inched down 0.1 percent, after showing no change in the previous month. (See table B.)

Prices for intermediate energy goods rose 1.3 percent in July, following a 2.0-percent increase in the prior month. Increasing prices for residual fuel, gasoline, industrial electric power, and diesel fuel more than offset declining prices for natural gas to electric utilities, industrial natural gas, liquefied petroleum gas, and jet fuels.

The index for materials for nondurable manufacturing turned down 0.3 percent in July, compared with a 0.4-percent increase in the previous month. Prices for primary basic organic chemicals, which fell 4.4 percent following a 5.4-percent gain in June, led the reversal in the nondurable manufacturing materials index. The plastic resins and materials index decreased at a faster rate in July than it did in the prior month. Prices for finished fabrics, gray fabrics, medicinal and botanical chemicals, and inedible fats and oils declined, after moving up a month earlier. By contrast, the intermediate basic organic chemicals index fell 1.0 percent in July, following a 5.9-percent drop in the previous month. The indexes for fertilizer materials and woodpulp also decreased less than they did a month earlier. Prices for leather and sulfuric acid rose, after moving down in June.

Intermediate foods and feeds prices decreased 0.4 percent in July, following a 1.9-percent increase in the prior month. The beef and veal index declined 5.6 percent, compared with a 6.7-percent gain in the previous month. Prices for crude vegetable oils, pork, shortening and cooking oils, and refined sugar and byproducts also turned down, after rising in June. The flour index decreased at a quicker pace than it did a month earlier. Partially counteracting these decelerating prices, the natural, processed, and imitation cheese index jumped 8.8 percent in July, following a 1.3-percent drop in the preceding month. Prices for prepared animal feeds, processed young chickens, and fluid milk products advanced more than they did in June. The indexes for confectionery materials and butter turned up, following declines in the prior month.

Prices for durable manufacturing materials moved down 0.2 percent in July, compared with a 0.3-percent increase in the previous month. The index for aluminum mill shapes fell 1.2 percent, following a 1.3-percent gain in the preceding month. The indexes for industrial and other fabricated textile products and for unprocessed filament yarns also turned down, after moving up a month earlier. Prices for steel mill products decreased more than they did in June. The indexes for copper and brass mill shapes, copper cathode and refined copper, and hardwood lumber advanced at a slower rate than they did in the prior month. On the other hand, the building paper and board index jumped 12.5 percent in July, following a 3.1-percent increase in the preceding month. Plywood prices also rose more than they did in June. The indexes for prepared paint, silver, and flat glass turned up, following declines a month earlier. Prices for primary aluminum (except extrusion billet) fell at a slower pace than they did in the previous month.

The index for construction materials and components climbed 0.3 percent in July, after edging up 0.1 percent a month earlier. Softwood lumber prices moved up 4.6 percent, following a 0.6-percent increase in the prior month. The indexes for gypsum products, concrete products, and architectural coatings turned up, after falling in June. Prices for plywood, treated wood, and millwork advanced more than they did in the previous month. By contrast, the nonferrous wire and cable index fell 0.7 percent in July, compared with a 1.3-percent rise in the preceding month. Prices for fabricated structural metal products also turned down in June. The indexes for plastic construction products, steel mill products, paving mixtures and blocks, and asphalt felts and coatings decreased at a quicker pace than they did a month earlier.

Crude goods

The Producer Price Index for Crude Materials for Further Processing fell 2.9 percent in July, after rising 4.5 percent in June. Prices for crude energy materials posted a decline in July, following an increase in the prior month. The crude foodstuffs and feedstuffs index fell more in July than it did in June. Conversely, prices for basic industrial materials rose more than they did in June. (See table B.)

Prices for crude energy materials turned down 4.4 percent in July, following an increase of 10.7 percent in the prior month. Prices for natural gas contributed heavily to this change of direction, declining 6.2 percent after advancing 11.8 percent in June. The index for crude petroleum slipped 0.7 percent, compared with a 12.3-percent increase in the previous month. Prices for coal followed suit, dropping 3.0 percent in July after rising 1.5 percent in June.

The index for foodstuffs and feedstuffs declined 3.0 percent in July, after falling 0.5 percent in June. Corn prices dropped 13.4 percent, compared with a 1.0-increase in June. The indexes for wheat, slaughter cattle, and soybeans fell more in July than they did in June. Prices for slaughter hogs and Irish potatoes for processing turned down, after rising in the previous month. By contrast, the fluid milk index advanced 4.1 percent, following a 2.3-percent decrease in June. Prices for fresh fruits and melons also turned up, after falling in June. The index for fresh vegetables (except potatoes) fell less than it did in the previous month. Prices for slaughter broilers and fryers rose more quickly in July than they did in June.

Prices for crude nonfood materials other than energy rose 0.8 percent in July, following a June rise of 0.6 percent. The iron and steel scrap index increased 3.1 percent, after falling 2.5 percent in June. Prices for raw cotton advanced at a faster pace in July than they did in June. July prices for hides and skins exhibited no change, after falling in the previous month. The index for phosphates declined at a slower rate than in June. On the other hand, nonferrous metal ore prices fell 1.2 percent, following an increase of 7.2 percent in the previous month. The indexes for gold ores and copper base scrap also turned down. Wastepaper prices dropped in July, after showing no movement in June.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries fell 3.7 percent in July, after registering an 8.6-percent gain in June. (Net output price indexes are not seasonally adjusted.) Prices received by the crude petroleum and natural gas industry declined 4.5 percent, following an 11.8-percent increase in the preceding month. The industry indexes for natural gas liquids and natural gas residue, bituminous coal and lignite surface mining, gold ores, crushed and broken limestone, and oil and gas field exploration services also turned down in July. Prices received by the oil and gas well drilling industry rose less in July than they did a month earlier. On the other hand, the industry index for coal mining services advanced 8.3 percent, after decreasing 0.9 percent in June. Prices received by the industry for bituminous coal underground mining showed no change in July, compared with a 0.5-percent decline in the previous month. In July, the Producer Price Index for the Net Output of Total Mining Industries was 133.2 (December 1984 = 100), 42.5 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries went up 0.2 percent in July, slightly less than the 0.3-percent increase observed in June. Prices received by the industries for petroleum refining and related products, lumber and wood products (except furniture), fabricated metal products, nonmetallic mineral products, and electrical and electronic machinery and equipment rose in July. Conversely, the industry indexes for primary metals, transportation equipment, and for chemicals and allied products fell in July. In July, the Producer Price Index for the Net Output of Total Manufacturing Industries was 136.5 (December 1984 = 100), 2.2 percent above its year-ago level.

Services. Among service industries, prices received by the industries for offices of physicians, operators and lessors of nonresidential buildings, property and casualty insurance, deep sea foreign transportation of freight, general medical and surgical hospitals, hotels and motels, and scheduled air transportation increased in July. Alternatively, the industry indexes for building cleaning and maintenance services, cable and other pay television services, and air courier services fell in July.

Resampling of Industries

Effective with this release, the Producer Price Index (PPI) includes data for 26 resampled industries. 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.

For information on specific index additions, deletions, and recodes that are effective with this semiannual update, see the July 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

2021 Creamery butter 2044 Rice milling 2046 Wet corn milling 2394 Canvas and related products 2397 Schiffli machine embroideries 2591 Drapery hardware and blinds and shades 2771 Greeting card publishing 2813 Industrial gases 2822 Synthetic rubber 2873 Nitrogenous fertilizers 2874 Phosphatic fertilizers 2875 Fertilizers, mixing only 2879 Pesticides and other agricultural chemicals 3021 Rubber and plastic footwear 3087 Custom compounding of purchased resins 3524 Lawn and garden equipment 3581 Automatic merchandising machines 3582 Commercial laundry equipment 3596 Scales and balances, except laboratory 3678 Electronic connector manufacturing 3691 Storage batteries 3692 Primary batteries, dry and wet 4612 Crude petroleum pipelines 4613 Refined petroleum pipelines 7349 Building cleaning and maintenance services, not elsewhere classified 8712 Architectural services

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.