August 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 Bureau of Labor Statistics of the U.S. Department of Labor reported today that the seasonally adjusted Producer Price Index for Finished Goods advanced 0.4 percent in August. This increase followed a 0.1-percent gain in July and a 0.5-percent rise in June. At the earlier stages of processing, prices received by manufacturers of intermediate goods increased 0.5 percent, following a 0.2-percent gain in July. The index for crude materials fell 1.4 percent in August, compared with a 2.9- percent decline in the prior month. (See table A.)

Among finished goods, prices for finished consumer foods climbed 0.7 percent in August, following a 0.2-percent decline in the previous month. The finished energy goods index moved up 1.2 percent, after rising 0.3 percent in July. By contrast, the index for finished goods other than foods and energy edged up 0.1 percent, after increasing 0.2 percent in the previous month.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.3 percent in August to 143.5 (1982=100). From August 2002 to August 2003, prices for finished goods moved up 3.4 percent. Over the same period, the finished energy goods index rose 14.2 percent, prices for finished consumer foods advanced 5.0 percent, and the index for finished goods other than foods and energy went up 0.4 percent. Earlier in the pipeline, prices for intermediate goods climbed 4.4 percent and the crude goods index jumped 20.9 percent.

Finished goods

Prices for finished consumer foods increased 0.7 percent in August, after posting a 0.2-percent decline in the prior month. Leading this turnaround, the index for beef and veal moved up 3.8 percent, following a 5.6-percent drop in July. Prices for fresh and dry vegetables and for finfish and shellfish also turned up in August, after falling a month earlier. The fresh fruits and melons index advanced at a faster rate than it did in the previous month, and pork prices fell less in August than they did in the prior month. Alternatively, the rate of increase for the dairy products index slowed from 3.4 percent in July to 2.4 percent in August. The index for eggs for fresh use also rose less than it did in July. Prices for processed young chickens and for processed fruits and vegetables turned down, following increases in the preceding month. The soft drinks index fell, after showing no change a month earlier.

Prices for finished energy goods rose 1.2 percent in August, compared with a 0.3-percent gain in the previous month. The majority of this acceleration was due to prices for gasoline, which increased 6.3 percent in August after rising 3.6 percent in July. Prices for residential electric power and kerosene turned up, following decreases in the prior month. The liquefied petroleum gas index fell less than it did a month earlier. On the other hand, residential natural gas prices declined 1.5 percent in August, after showing no change in the preceding month. The indexes for home heating oil and diesel fuel rose at a slower pace than they did in July.

The index for capital equipment inched up 0.1 percent, following a 0.4- percent gain a month earlier. In August, rising prices for civilian aircraft, light motor trucks, passenger cars, pumps and compressors, and commercial furniture slightly outweighed falling prices for communications and related equipment, electronic computers, railroad equipment, agricultural machinery and equipment, x-ray and electromedical equipment, and heavy motor trucks.

The index for finished consumer goods other than foods and energy moved up 0.1 percent in August, after rising at the same rate in the previous month. In August, increasing prices for light motor trucks, passenger cars, pharmaceutical preparations, men's and boys' apparel, textile housefurnishings, and mobile homes prevailed over decreasing prices for lawn and garden equipment (except tractors), alcoholic beverages, household appliances, pet food, and periodical circulation.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components climbed 0.5 percent in August, after registering a 0.2-percent gain in July. Prices for materials for nondurable manufacturing, materials for durable manufacturing, and intermediate foods and feeds advanced in August, following declines in the preceding month. The index for intermediate energy goods rose at a quicker pace in August than it did a month earlier. On the other hand, the index for materials and components for construction increased less in August than it did in the previous month. Excluding foods and energy, prices for intermediate goods edged up 0.1 percent in August, following a 0.1-percent dip in July. (See table B.)

The index for materials for nondurable manufacturing jumped 1.1 percent in August, compared with a 0.3-percent decrease in the prior month. Much of this upturn can be traced to prices for primary basic organic chemicals, which climbed 7.9 percent after falling 4.4 percent in July. The indexes for fertilizer materials, finished fabrics, processed yarns and threads, synthetic fibers, intermediate basic organic chemicals, and medicinal and botanical chemicals also turned up in August. Prices for plastic resins and materials fell less than they did a month earlier. The paperboard index was unchanged, after declining in July. By contrast, prices for basic inorganic chemicals decreased 0.3 percent in August, following a 1.1-percent gain a month earlier. The index for paper turned down, after showing no change in July, while leather prices remained unchanged in August following a July increase.

Prices for intermediate energy goods rose at a faster pace in August than they did in the previous month -- up 2.4 percent after a 1.3-percent gain in July. The index for natural gas to electric utilities jumped 7.8 percent, compared with a 4.3-percent drop in the preceding month. Prices for industrial natural gas, jet fuels, and finished lubricants also turned up in August. The index for commercial electric power moved up, after showing no change in July. Gasoline prices climbed at a quicker pace in August than they did a month earlier, while the index for liquefied petroleum gas fell at a slower rate than it did in July. On the other hand, prices for residual fuels advanced 5.3 percent in August, following a 44.6-percent surge in the previous month. The index for industrial electric power also rose less than it did in the prior month. Subsequent to a 0.8-percent gain in July, prices for commercial natural gas were unchanged in August.

The index for materials for durable manufacturing increased 0.6 percent in August, after declining 0.2 percent in July. Prices for steel mill products climbed 0.6 percent, following a 1.3-percent drop a month earlier. The indexes for primary aluminum (except extrusion billet), refined gold, and unprocessed filament yarns also turned up in August. Prices for aluminum mill shapes fell less than they did in July. By contrast, the index for building paper and board rose at a slower rate in August than it did in the previous month -- 3.0 percent and 12.5 percent, respectively. Prices for plywood, prepared paint, hardwood lumber, and for copper and brass mill shapes also went up less than they did in the prior month. The index for copper cathode and refined copper turned down in August.

Prices for intermediate foods and feeds moved up 0.2 percent in August, after decreasing 0.4 percent in July. The index for beef and veal jumped 3.8 percent, following a 5.6-percent drop in the preceding month. Prices for crude vegetable oils, shortening and cooking oils, flour, and portion-controlled meat products also advanced in August, after declining a month earlier. On the other hand, prices for prepared animal feeds went down 2.3 percent in August, compared with a 0.5-percent gain in the prior month. The index for processed young chickens also fell, after rising in July. Prices for natural, processed, and imitation cheese climbed less in August than they did in the previous month.

Prices for materials and components for construction moved up at a 0.1- percent rate in August, following a 0.3-percent gain in July. The softwood lumber index advanced 0.4 percent, after rising 4.6 percent in the prior month. Price increases for plywood, millwork, treated wood, and hardwood lumber also slowed in August. The indexes for gypsum products and for prefabricated wood buildings and components turned down, after advancing in July. On the other hand, prices for plastic construction products fell 0.2 percent in August, compared with a 1.5-percent drop a month earlier. The indexes for steel mill products, paving mixtures and blocks, fabricated structural metal products, and nonferrous wire and cable turned up, following declines in the previous month.

Crude goods

The Producer Price Index for Crude Materials for Further Processing fell 1.4 percent in August, after dropping 2.9 percent in July. Prices for crude foodstuffs and feedstuffs increased, after posting a decline one month earlier. The index for basic industrial materials rose more in August than it did in July. Conversely, prices for crude energy materials declined more rapidly in August than in the prior month. (See table B.)

The index for crude foodstuffs and feedstuffs advanced 3.7 percent in August, after falling 3.0 percent in July. Slaughter cattle prices led the reversal with a 6.1-percent increase, following a 3.0-percent decrease the prior month. The indexes for wheat and slaughter hogs also rebounded, after dropping in July, and corn prices fell at a slower rate in August then they did in the preceding month. Conversely, prices for slaughter broilers and fryers climbed only 2.4 percent, after advancing 5.0 percent in July. The slaughter turkey index fell more in August than it did in the prior month.

Prices for crude nonfood materials other than energy rose 3.7 percent in August, after increasing 0.8 percent in the prior month. The index for iron and steel scrap grew 8.8 percent, following a 3.1-percent jump in July. Prices for nonferrous metal ores and wastepaper turned up, compared with decreases in the previous month. By contrast, prices for raw cotton fell 7.7 percent, after rising 10.2 percent a month earlier. The index for iron ore increased at a slower rate in August than it did in July.

The August index for crude energy materials continued to fall, dropping 7.4 percent after a 4.4-percent decline in July. This faster rate of decrease was due to natural gas prices, which dropped 13.1 percent after sliding 6.2 percent in the preceding month. By contrast, the index for crude petroleum advanced by 1.5 percent, compared with a 0.7-percent decline in July. Coal also turned up, climbing 1.3 percent following a 3.0- percent fall 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 fell 6.0 percent in August, after declining 3.7 percent in July. (Net output price indexes are not seasonally adjusted.) Prices received by the natural gas liquids and natural gas residue industry moved down 10.7 percent, following a 5.1-percent drop in the preceding month. The index for the crude petroleum and natural gas industry also fell more in August than it did in July. Prices received by the industries for coal mining services and for chemical and fertilizer mineral mining turned down, after rising a month earlier. On the other hand, the industry index for oil and gas field services advanced 2.2 percent, after edging down 0.1 percent in July. Prices received by the industries for bituminous coal and lignite surface mining and for gold ores also turned up in August, following declines in the previous month. In August, the Producer Price Index for the Net Output of Total Mining Industries was 125.2 (December 1984 = 100), 30.6 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries rose 0.4 percent in August, slightly more than the 0.2-percent increase observed in July. Leading this acceleration, the index for the petroleum refining and related products industry group advanced 5.0 percent, following a 2.3-percent gain in the prior month. Prices received by the industry groups for food and kindred products, transportation equipment, and primary metals turned up in August, after falling a month earlier. Conversely, the industry group index for electrical and electronic machinery, equipment, and supplies turned down 1.2 percent, following a 0.1-percent increase in July. Prices for the lumber and wood products (except furniture) industry group rose less than they did in the previous month. In August, the Producer Price Index for the Net Output of Total Manufacturing Industries was 137.0 (December 1984 = 100), 2.5 percent above its year-ago level.

Services. Among service industries, prices received by the industries for property and casualty insurance, telephone communications (except radiotelephone), non-local trucking, offices of physicians, general medical and surgical hospitals, prepackaged software, and help supply services increased in August. Alternatively, the industry indexes for operators and lessors of nonresidential buildings, scheduled air transportation, real estates agents and managers, travel agencies, and wireless communications fell in August.

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.