October 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 0.8 percent in October. This gain followed a 0.3- percent rise in September and a 0.4-percent increase in August. Rising prices for beef and veal, light motor trucks, and passenger cars led the increase in the finished goods index in October. At the earlier stages of processing, prices received by the manufacturers of intermediate goods went up 0.4 percent, after edging down 0.1 percent in the prior month. The rate of increase in the index for crude materials slowed from 3.4 percent in September to 2.6 percent in October. (See table A.)

Among finished goods, prices for finished consumer foods moved up 2.2 percent in October, compared with a 1.2-percent increase in the previous month. (Excluding beef and veal, the finished goods index would have risen 0.5 percent in October.) The index for finished goods other than foods and energy rose 0.5 percent, after showing no change in September. (Excluding passenger cars and light trucks, prices for finished goods other than foods and energy would have risen 0.2 percent in October.) By contrast, prices for finished energy goods inched down 0.1 percent in October, following a 0.1-percent gain a month earlier.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 1.1 percent in October to 145.5 (1982=100). From October 2002 to October 2003, prices for finished goods advanced 3.4 percent. Over the same period, the index for finished consumer foods rose 8.5 percent, finished energy goods prices went up 9.2 percent, and the index for finished goods other than foods and energy climbed 0.5 percent. Prices for intermediate goods moved up 3.4 percent, and the crude goods index jumped 22.8 percent.

Finished goods

Prices for finished consumer foods rose 2.2 percent in October, compared with a 1.2-percent gain in the preceding month. An 18.3-percent upsurge in October's beef and veal index followed a 4.2-percent increase in September and led the acceleration in the finished consumer foods index. Prices for fresh fruits and melons, processed young chickens, shortening and cooking oils, processed fruits and vegetables, and confectionery end products turned up, following decreases in September. On the other hand, the fresh and dry vegetables index dropped 9.1 percent in October, after advancing 20.7 percent in the previous month. The finfish and shellfish index also turned down, following a gain in the prior month. Prices for dairy products, pork, soft drinks, and eggs for fresh use grew at slower rates than they did in September.

Prices for finished consumer goods other than foods and energy advanced 0.6 percent in October, after inching up 0.1 percent in the previous month. The index for light motor trucks increased 3.4 percent, compared with a 0.1-percent gain in September. For the 12 months ended in October 2003, light motor truck prices increased 1.7 percent. The passenger car index advanced 1.6 percent in October, following a 0.5- percent decline in September. From October 2002 to October 2003, prices for passenger cars fell 0.4 percent. In accordance with usual practice, most new model year passenger cars and light trucks were introduced into the PPI in October. (See Report on Quality Changes for 2004 Model Vehicles, USDL 03-721.) Prices for book publishing, men's and boys' apparel, and floor coverings turned up, after falling a month earlier. The indexes for cigarettes and newspaper circulation moved up at a faster pace than they did in the preceding month. Alternatively, prices for soaps and synthetic detergents fell 0.2 percent in October, following a 0.6-percent increase in the prior month. Prices for toys, games, and children's vehicles also declined, after rising a month earlier. The indexes for pharmaceutical preparations and mobile homes rose less than they did in September.

The capital equipment index climbed 0.6 percent in October, compared with a 0.1-percent decline in the previous month. Prices for light motor trucks, passenger cars, and communication and related equipment accounted for most of this upturn. The rate of increase in prices for light motor trucks rose from 0.1 percent in September to 3.4 percent in October. The indexes for passenger cars, communication and related equipment, and pumps and compressors turned up, following decreases a month earlier. Agricultural machinery and equipment prices advanced at a quicker rate in October than they did in the prior month. The index for heavy motor trucks went up, after showing no change in September. Conversely, prices for integrating and measuring instruments, electronic computers, and metal cutting machine tools fell, after showing no change in the preceding month. The index for civilian aircraft rose less in October than it did in the prior month, while prices for x-ray and electromedical equipment moved down at a faster pace than they did in September.

The index for finished energy goods edged down 0.1 percent in October, after increasing by the same magnitude a month earlier. Prices for gasoline fell 3.0 percent, following a 2.2-percent rise in September. The index for residential natural gas also turned down, after moving up in the previous month. On the other hand, prices for home heating oil rebounded 9.6 percent in October, compared with a 14.3-percent drop in the prior month. The indexes for liquefied petroleum gas, diesel fuel, and kerosene also turned up, after falling in the preceding month. Residential electric power prices advanced more in October than they did a month earlier.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 0.4 percent in October, compared with a 0.1-percent decrease in September. Prices for intermediate energy goods and materials for nondurable manufacturing turned up in October, following declines in the preceding month, while the index for intermediate foods and feeds went up at a faster rate than it did in September. On the other hand, prices for materials and components for construction and for materials for durable manufacturing rose more slowly in October than they did a month earlier. Excluding foods and energy, intermediate goods prices climbed 0.3 percent, after inching up 0.1 percent in the prior month. (See table B.)

The index for intermediate energy goods advanced 0.6 percent in October, following a 2.3-percent decrease in September. Contributing heavily to this reversal, prices for diesel fuel jumped 18.4 percent, following a 17.0-percent drop in the previous month, and the index for jet fuels increased 8.6 percent, after falling 17.4 percent a month earlier. The indexes for home heating oil and liquefied petroleum gas also turned up in October. Prices for industrial electric power and commercial electric power rose more quickly than they did in September, while the index for residual fuels declined at a slower pace in October than it did in the preceding month. By contrast, gasoline prices fell 3.0 percent, compared with a 2.2-percent gain in September. The index for commercial natural gas also moved down in October, after rising in the prior month. Prices for industrial natural gas and natural gas to electric utilities decreased more than they did in September.

The index for materials for nondurable manufacturing climbed 0.7 percent in October, after posting a 1.2-percent decline a month earlier. Prices for primary basic organic chemicals advanced 2.4 percent, after falling 0.8 percent in September. The indexes for gray fabrics, inedible fats and oils, and woodpulp also moved up, following decreases in the preceding month. Paperboard prices went down at a slower rate in October than they did in September. The index for plastic resins and materials rose at a quicker pace than it did in the previous month. On the other hand, prices for intermediate basic organic chemicals moved down 0.5 percent, compared with a 2.7-percent gain in the prior month. The indexes for basic inorganic chemicals and nitrogenates increased less in October than they did in the prior month, while paper prices fell more than they did in September.

Subsequent to a 2.3-percent advance in September, the index for intermediate foods and feeds moved up 3.1 percent in October. Price increases for beef and veal led this acceleration, rising 18.3 percent in October after posting a 4.2-percent increase a month earlier. The indexes for shortening and cooking oils, refined sugar and sugar byproducts, processed young chickens, and for natural, processed, and imitation cheese turned up in October. By contrast, prices for prepared animal feeds rose 1.1 percent, after registering a 4.4-percent gain in the preceding month. The index for fluid milk products also advanced less in October than it did in September. Prices for crude vegetable oils fell more in October than they did in the previous month, and the index for confectionery materials turned down, after rising in September.

Prices for materials and components for construction went up 0.3 percent in October, following a 0.9-percent rise a month earlier. The plywood index climbed 5.4 percent, compared with a 17.1-percent advance in the prior month. Price increases for millwork and for prefabricated wood buildings and components also slowed in October. The indexes for softwood lumber, hardwood lumber, treated wood, and gypsum products fell, after moving up in September. Prices for paving mixtures and blocks declined at a quicker rate in October than they did in the previous month. On the other hand, the index for concrete products edged up 0.1 percent, following a 0.4-percent decrease in September. Prices for wiring devices also turned up. The indexes for steel mill products and plastic construction products rose at a quicker pace in October than they did a month earlier.

Prices for materials for durable manufacturing advanced 0.6 percent in October, after posting a 0.9-percent increase in September. The indexes for plywood, building paper and board, and cold-rolled steel sheet and strip rose less than they did in the preceding month. Prices for refined gold, refined silver, industrial and other fabricated textile products, hardwood lumber, and for adhesives and sealants moved down in October, following gains a month earlier. Conversely, the index for primary aluminum (except extrusion billet) jumped 4.5 percent, compared with a 1.4- percent decline in September. Prices for semifinished steel mill products and prepared paint also turned up in October. The indexes for hot-rolled bars, plates, and structural shapes; hot-rolled steel sheet and strip; and copper cathode and refined copper advanced more than they did in the prior month.

Crude goods

The rate of increase for the Producer Price Index for Crude Materials for Further Processing slowed from 3.4 percent in September to 2.6 percent in October. Rising prices for crude foodstuffs and feedstuffs and for crude nonfood materials less energy outweighed price declines for crude energy materials. (See table B.)

The index for crude foodstuffs and feedstuffs climbed 8.9 percent in October, after increasing 7.0 percent in September. Prices for slaughter cattle jumped 20.4 percent, compared with an 11.0-percent gain in the prior month. Fluid milk prices also rose more rapidly in October than they did in the previous month. The indexes for slaughter broilers and fryers and for fresh fruits and melons turned up in October, after falling a month earlier. On the other hand, the corn index dropped 12.2 percent, following a 12.8-percent increase in September. Prices for fresh and dry vegetables and slaughter hogs also turned down, after advancing in the prior month. The index for slaughter turkeys rose at a slower pace in October than it did in September.

Prices for basic industrial materials moved up 3.1 percent, following a 2.3-percent rise in September. The raw cotton index jumped 23.5 percent in October, after posting a 5.6-percent gain a month earlier. The indexes for copper base scrap, wastepaper, and for hides and skins increased at faster rates in October than they did in September. Prices for aluminum base scrap turned up, following declines in the previous month. By contrast, prices for gold ores turned down 0.6 percent, after advancing 6.7 percent in the prior month. The indexes for construction sand, gravel, and crushed stone and for iron and steel scrap rose less quickly from September to October. Prices for hardwood logs, bolts, and timber declined, after showing no change in September.

Subsequent to a 0.6-percent gain in September, the index for crude energy materials moved down 3.6 percent in October. Natural gas prices decreased 9.4 percent in October, following a 5.4-percent rise in the prior month. The coal index exhibited a slower rate of increase, climbing 0.8 percent in October after advancing 1.4 percent a month earlier. Alternatively, crude petroleum prices turned up 6.8 percent, following an 8.4-percent drop in September.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries fell 2.4 percent in October, after rising 0.8 percent in September. (Net output price indexes are not seasonally adjusted.) Leading this reversal, prices received by the natural gas liquids and natural gas residue industry turned down 6.5 percent, following a 3.3- percent increase in the preceding month. The index for the crude petroleum and natural gas industry declined more rapidly in October than it did in September. Prices received by the gold ores industry moved down, after advancing a month earlier. The index for the crushed and broken limestone industry rose at a slower rate in October than it did in the prior month. Alternatively, prices for the oil and gas well drilling industry turned up 0.8 percent, after declining 1.2 percent in September. The industry index for bituminous coal underground mining increased more quickly in October than it did in September. In October, the Producer Price Index for Total Mining Industries was 123.2 (December 1984=100), 17.9 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries climbed 0.9 percent in October, after increasing 0.1 percent in September. The industry group index for transportation equipment advanced 3.6 percent, following a 0.4-percent drop in the previous month. Prices received by the food and kindred products industry group rose more in October than they did a month earlier. The index for the petroleum refining and related products industry group fell at a slower pace in October than it did in September. Prices for the chemicals and allied products industry group edged up, after showing no change in the preceding month. On the other hand, the industry group index for lumber and wood products (except furniture) increased 0.4 percent in October, following a 3.7-percent gain in September. Prices received by the industry group for fabricated metal products (except machinery and transportation equipment) rose slightly less than they did in the prior month. The index for the stone, clay, glass, and concrete products industry group inched down in October, after increasing in September. In October, the Producer Price Index for Total Manufacturing Industries was 138.3 (December 1984=100), 2.0 percent above its year-ago level.

Services. Among service industries, prices received by the industries for general medical and surgical hospitals, hotels and motels, television broadcasting, investment advice, scheduled air transportation, property and casualty insurance, and for skilled and intermediate care facilities increased in October. By contrast, the industry indexes for security brokers, dealers, and investment banking companies; prepackaged software; telephone communications (except radiotelephone); life insurance carriers; legal services; and wireless communications declined during the same period.

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. A concordance between the two structures is available at http://www.bls.gov/ppi/ppinaicstosic.htm through a World Wide Web site.