September 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 gained 0.3 percent in September. This increase followed a 0.4-percent advance in August and a 0.1-percent rise in July. The index for finished goods other than foods and energy showed no change in September, compared with a 0.1-percent increase in the preceding month. At the earlier stages of processing, prices received by manufacturers of intermediate goods fell 0.1 percent, after a 0.5-percent gain in August. The index for crude materials turned up 3.4 percent in September, following a 1.4-percent decrease in the prior month. (See table A.)

Most of the September increase in the index for finished goods was due to prices for finished consumer foods, which rose 1.2 percent compared with a 0.7-percent increase in August. Prices for finished consumer goods other than foods and energy advanced at a 0.1-percent rate for the third consecutive month. The finished energy goods index inched up 0.1 percent in September, following a 1.2-percent climb in the prior month. Alternatively, prices for capital equipment decreased 0.1 percent, after rising 0.1 percent in August.

During the third quarter of 2003, the finished goods index increased at a 3.4-percent seasonally adjusted annual rate, after falling at a 5.9- percent rate during the second quarter of 2003. The index for finished goods other than foods and energy climbed at a 1.3-percent seasonally adjusted annual rate during the third quarter of 2003, compared with a 2.4- percent rate of decline during the second quarter of 2003. Among prices for raw and partially processed goods, the intermediate goods index advanced at a 2.1-percent seasonally adjusted annual rate during the third quarter of 2003, following a 9.9-percent rate of decline from March to June. Crude goods prices decreased at a 4.1-percent seasonally adjusted annual rate from June to September, compared with a 36.4-percent rate of decrease in the preceding quarter. (See summary below.)

Crude materials for further processing 35.5 -32.5 24.7 17.8 168.1 -36.4 -4.1 Foodstuffs and feedstuffs 7.4 -7.6 4.5 20.3 18.0 10.1 34.2 Crude energy materials 85.6 -52.9 61.5 18.3 579.4 -61.3 -37.0 Crude nonfood materials less energy -5.5 -9.9 12.6 12.1 19.0 -9.4 30.7 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 increased 0.3 percent in September to 143.9 (1982=100). From September 2002 to September 2003, prices for finished goods increased 3.5 percent. During the same period, the index for finished energy goods advanced 12.9 percent, the index for finished consumer foods gained 6.6 percent, and prices for finished goods other than foods and energy edged up 0.1 percent. At the earlier stages of processing, prices received by manufacturers of intermediate goods increased 3.7 percent for the 12 months ended in September 2003, while the crude goods index ascended 22.3 percent.

Finished goods

Prices for finished consumer foods rose at a faster rate in September than in August, rising 1.2 percent after increasing 0.7 percent in the preceding month. The index for fresh and dry vegetables jumped 20.7 percent in September, compared with a 4.3-percent advance in the prior month. Prices for beef and veal and eggs for fresh use also rose at a faster rate in September than they did in August. The indexes for pork, soft drinks, bakery products, and processed turkeys turned up in September. Alternatively, the index for fresh fruits and melons dropped 1.9 percent in September, after posting an increase of 7.1 percent in the previous month. Prices for shortening and cooking oils also turned down, after rising in August. September prices for processed young chickens fell more quickly than they did a month earlier, while prices for dairy products rose less in September than in August. During the third quarter of 2003, the index for finished consumer foods increased at a 6.8-percent seasonally adjusted annual rate, after advancing at a 5.1-percent rate in the second quarter of 2003.

Prices for finished consumer goods other than foods and energy moved up 0.1 percent in September, the same rate of increase as in August. Rising prices for pharmaceutical preparations, mobile homes, soaps and synthetic detergents, light motor trucks, and cigarettes slightly outweighed falling prices for passenger cars, book publishing, sporting and athletic goods, floor coverings, and alcoholic beverages. From June 2003 to September 2003, the index for finished consumer goods other than foods and energy rose at a 1.3-percent seasonally adjusted annual rate, after falling at a 3.0-percent annual rate from March 2003 to June 2003.

The index for finished energy goods edged up 0.1 percent in September, after posting a 1.2-percent advance in August. Price increases for gasoline slowed from August to September -- up 6.3 and 2.2 percent, respectively. The residential electric power index also rose less in September than it did in the prior month. Prices for home heating oil and diesel fuel turned down in September. Conversely, residential natural gas prices turned up 1.6 percent, compared with a decline of 1.5 percent in August. During the third quarter of 2003, the index for finished energy goods increased at a 6.5-percent seasonally adjusted annual rate, after decreasing at a 27.8-percent rate for the second quarter of 2003.

Capital equipment prices turned down 0.1 percent in September, following a 0.1-increase in August. In September, price decreases for communication and related equipment, passenger cars, x-ray and electromedical equipment, and printing trades machinery slightly outweighed rising prices for civilian aircraft, light motor trucks, commercial furniture, tools and dies, and welding machines and equipment. From June 2003 to September 2003, capital equipment prices rose at a 1.4-percent seasonally adjusted annual rate, after a 1.7-percent rate of decline from March 2003 to June 2003.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components inched down 0.1 percent in September, after posting a 0.5- percent gain in the previous month. Prices for both intermediate energy goods and materials for nondurable manufacturing turned down, following increases in August. By contrast, the indexes for materials and components for construction, intermediate foods and feeds, and materials for durable manufacturing rose at a faster pace in September than they did a month earlier. Excluding foods and energy, prices for intermediate goods edged up 0.1 percent, the same rate of increase as in August. (See table B.)

The index for intermediate energy goods fell 2.3 percent in September, following a 2.4-percent increase in the prior month. Diesel fuel prices dropped 17.0 percent, compared with a 2.7-percent gain in the previous month. The indexes for jet fuels, industrial natural gas, natural gas to electric utilities, residual fuel, and home heating oil also turned down, after rising in August. Gasoline prices advanced at a slower rate in September than they did a month earlier. Alternatively, the commercial electric power index moved up 2.2 percent in September, compared with a 1.0- percent increase in the preceding month. Prices for commercial natural gas rose, after showing no change in August. The intermediate energy goods index increased at a 5.6-percent seasonally adjusted annual rate during the third quarter of 2003, after declining at a 42.8-percent rate in the previous quarter.

Prices for materials for nondurable manufacturing decreased 1.2 percent in September, following a 1.1-percent rise a month earlier. The primary basic organic chemicals index declined 0.8 percent, compared with a 7.9-percent advance in the prior month. Prices for finished fabrics and for processed yarns and threads also turned down, following gains in the preceding month. Paperboard prices moved down, after showing no change in the previous month. The index for fertilizer materials increased less than it did in August. On the other hand, the index for plastic resins and materials increased 0.6 percent in September, following a 1.2-percent drop in the prior month. Prices for sulfuric acid and synthetic rubber turned up, after declining in August. The intermediate basic organic chemicals index rose more than it did in the previous month. Paper prices fell at a slower pace in September than they did a month earlier. The index for nondurable manufacturing materials declined at a 1.5-percent seasonally adjusted annual rate from June 2003 to September 2003, following an 8.6- percent rate of decrease in the second quarter of 2003.

Prices for materials and components for construction advanced 0.9 percent in September, compared with a 0.1-percent increase in the prior month. The index for softwood lumber jumped 10.2 percent, following a 0.4- percent gain in August. Prices for plywood, treated wood, and millwork also moved up at a faster rate in September than they did in the prior month. The indexes for gypsum products and plastic construction products turned up, after falling a month earlier. On the other hand, prices for concrete products declined 0.4 percent in September, following a 0.2- percent rise in the preceding month. The indexes for paving mixtures and blocks and for wiring devices also fell, after advancing in August. Prices for fabricated ferrous wire products showed no change, following an increase in the previous month. The steel mill products index rose less than it did a month earlier. Prices for materials and components for construction grew at a 5.6-percent seasonally adjusted annual rate during the third quarter of 2003, after increasing at a 1.1-percent rate during the preceding quarter.

The index for intermediate foods and feeds moved up 2.3 percent in September, following a 0.2-percent increase in the previous month. Accounting for much of this acceleration, prices for prepared animal feeds climbed 4.4 percent, compared with a 2.3-percent decrease in the prior month. The indexes for pork and confectionery materials also turned up, following declines in the previous month. Prices for fluid milk products and for beef and veal advanced at a faster pace than they did in August. By contrast, prices for crude vegetable oils dropped 2.7 percent in September, following a 3.6-percent gain in the preceding month. The indexes for natural, processed, and imitation cheese; shortening and cooking oils; flour; and refined sugar and sugar byproducts also turned down, after rising in the prior month. Prices for processed young chickens fell more than they did in August. The index for intermediate foods and feeds advanced at an 8.6-percent seasonally adjusted annual rate from June 2003 to September 2003, compared with a 12.4-percent rate of increase during the second quarter.

Prices for materials for durable manufacturing climbed 0.9 percent in September, following a 0.6-percent increase in the preceding month. The index for plywood jumped 17.1 percent, after moving up 1.9 percent a month earlier. Prices for building paper and board also rose more in September than they did in August. The indexes for copper cathode and refined copper, hot rolled steel sheet and strip, soft fiber cordage and twine (except cotton), and cement increased, following declines in the prior month. On the other hand, price increases for cold rolled steel sheet and strip slowed from 2.4 percent in August to 0.7 percent in September. The indexes for primary aluminum (except extrusion billet) and semifinished steel mill products turned down, after advancing in the previous month. Prices for aluminum mill shapes fell at a faster rate in September than they did in August. The index for hot rolled bars, plates, and structural shapes rose less than it did a month earlier. Prices for durable manufacturing materials advanced at a 5.1-percent seasonally adjusted annual rate in the third quarter of 2003, following a 0.6-percent rate of increase in the previous quarter.

Crude goods

A 3.4-percent increase in the Producer Price Index for Crude Materials for Further Processing followed a 1.4-percent decline in August. Prices for crude energy materials rose, after falling in the prior month, and the index for crude foodstuffs and feedstuffs advanced at a faster rate in September than it did in August. Conversely, price increases slowed from August to September for crude nonfood materials less energy. (See table B.)

Subsequent to a 7.4-percent drop in August, the index for crude energy materials went up 0.6 percent in September. Natural gas prices increased 5.4 percent in September, following a 13.1-percent decrease in the prior month. The coal index moved up 1.4 percent -- just outpacing the 1.3- percent gain observed in the preceding month. By contrast, crude petroleum prices fell 8.4 percent in September, after rising 1.5 percent in August. During the third quarter of 2003, the index for crude energy materials declined at a 37.0-percent seasonally adjusted annual rate, after dropping at a 61.3-percent rate during the previous calendar quarter.

Price increases for crude foodstuffs and feedstuffs accelerated in September; a 7.0-percent gain followed a 3.7-percent advance in August. The index for slaughter cattle climbed 11.0 percent, compared with a 6.1- percent increase in the prior month. Prices for fresh and dry vegetables and unprocessed finfish also rose at a quicker pace in September. The indexes for corn, soybeans, and slaughter turkeys turned up, after falling in August. Conversely, wheat prices moved down 2.6 percent in September, following an 11.6-percent jump in the preceding month. The indexes for slaughter broilers and fryers and for fresh fruits and melons also went down, after advancing in August. Prices for fluid milk and slaughter hogs rose less than they did in the previous month. After moving up at a 10.1- percent seasonally adjusted annual rate during the second quarter of 2003, prices for crude foodstuffs and feedstuffs increased at a 34.2-percent rate during the June to September period.

Prices for basic industrial materials went up 2.3 percent, following a 3.7-percent rise in August. The index for iron and steel scrap climbed 4.8 percent in September, after posting an 8.8-percent gain a month earlier. Prices for hides and skins, copper base scrap, and for softwood logs, bolts, and timber also increased at a slower rate in September. The indexes for aluminum base scrap and phosphates moved down, following August advances. On the other hand, raw cotton prices increased 5.6 percent in September, compared with a 7.7-percent decline in the previous month. The indexes for gold ores; construction sand, gravel, and crushed stone; pulpwood; and wastepaper rose more than they did in August. For the calendar quarter ended September 2003, the index for crude nonfood materials less energy increased at a 30.7-percent seasonally adjusted annual rate, which followed a 9.4-percent rate of decrease in the calendar quarter ended June 2003.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries rose 0.8 percent in September, after declining 6.0 percent in August. (Net output price indexes are not seasonally adjusted.) Prices received by the natural gas liquids and natural gas residue industry turned up 3.3 percent, following a 10.7-percent drop in the preceding month. The indexes for the crude petroleum and natural gas industry and for rock salt fell less in September than they did in August. Prices received by the industries for gold ores and for crushed and broken limestone rose at a faster rate than they did a month earlier. Alternatively, the industry index for oil and gas well drilling declined 1.2 percent in September, after increasing 1.8 percent in the previous month. The indexes for the bituminous coal underground mining and potash, soda, and borate minerals industries increased more slowly in September than they did in August. For the three months ended in September 2003, the index for the net output of total mining industries fell at a 30.7-percent seasonally adjusted annual rate, after decreasing at a 55.3-percent rate in the prior quarter. In September, this index was 126.2 (December 1984 = 100), 26.1 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries edged up 0.1 percent in September, after climbing 0.4 percent in August. Prices rose in September for the following industry groups: food and kindred products, lumber and wood products (except furniture), fabricated metal products (except machinery and transportation equipment), primary metals, and printing and publishing. These increases slightly outweighed price declines for petroleum refining and related products; transportation equipment; electrical and electronic machinery, equipment, and supplies; non-electrical machinery; and rubber and miscellaneous plastic products. From June 2003 to September 2003, the index for the net output of total manufacturing industries rose at a 2.7- percent seasonally adjusted annual rate, after decreasing at a 7.0-percent rate in the second quarter of 2003. In September, this index was 137.1 (December 1984 = 100), 1.6 percent above its year-ago level.

Services. Among service industries, prices received by the industries for property and casualty insurance, legal services, life insurance carriers, television broadcasting, and offices of physicians increased in September. On the other hand, the industry indexes for hotels and motels; telephone communications (except radiotelephone); security brokers, dealers, and investment banking companies; and cable and other pay television services declined in September.

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.