January 2004 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 0.6 percent in January, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.2-percent gain in December and a 0.2-percent decline in November. Rising prices for gasoline led the increase in the finished goods index in January. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 0.8 percent in January, after rising 0.4 percent in the prior month. The crude goods index increased 2.8 percent, compared with a 2.2-percent rise in December. (See table A.)

2004 Jan. .6 -1.4 4.7 .3 3.3 .8 2.8 NOTE: Some of the percent changes shown here and elsewhere in this release may differ from those previously reported because seasonal adjustment factors have been recalculated to reflect developments during 2003. In addition, indexes for September 2003 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.

Among finished goods, the index for finished energy goods jumped 4.7 percent in January, following a 1.6-percent advance in the previous month. Excluding prices for gasoline, the finished goods index rose 0.2 percent in January. Prices for finished goods other than foods and energy increased 0.3 percent, after edging down 0.1 percent in the preceding month. By contrast, the finished consumer foods index dropped 1.4 percent in January, after inching up 0.1 percent a month earlier.

Before seasonal adjustment, the Producer Price Index for Finished Goods advanced 0.6 percent to 145.4 (1982=100). From January 2003 to January 2004, finished goods prices rose 3.3 percent. During the same period, the indexes for finished energy goods, finished consumer foods, and finished goods other than foods and energy moved up 11.4, 4.2, and 0.9 percent, respectively. At the earlier stages of processing, prices for intermediate goods increased 3.8 percent for the 12 months ended in January 2004, while the index for crude goods jumped 13.7 percent.

Finished goods

Prices for finished energy goods increased 4.7 percent in January, after registering a 1.6-percent gain in the prior month. Leading this acceleration, the gasoline index surged 14.1 percent, following a 3.4- percent rise in December. Prices for home heating oil and liquefied petroleum gas also advanced at a faster rate in January than they did a month earlier. The index for residential natural gas turned up, following a decline in the previous month. On the other hand, the rate of increase for residential electric power prices slowed from 0.5 percent in December to 0.1 percent in January.

2004 Jan. -1.0 2.7 .6 3.8 -6.9 12.5 3.3 13.7 NOTE: Some of the percent changes shown here and elsewhere in this release may differ from those previously reported because seasonal adjustment factors have been recalculated to reflect developments during 2003. In addition, indexes for September 2003 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.

The index for finished consumer goods other than foods and energy turned up 0.3 percent in January, compared with a 0.1-percent decrease in the preceding month. Light motor truck prices increased 1.1 percent, following a 1.7-percent decline in December. The indexes for passenger cars, periodical circulation, and for sporting and athletic goods also advanced in January, after decreasing a month earlier. Prices for pharmaceutical preparations and book publishing rose more in January than they did in the previous month, while the cigarettes index increased, after showing no change in December. Alternatively, household furniture prices inched down 0.1 percent in January, following a rise of the same magnitude in the prior month.

Subsequent to a 0.1-percent decrease in December, the capital equipment index advanced 0.3 percent in January. The indexes for light motor trucks and passenger cars turned up, following declines in December. Prices for heavy motor trucks, construction machinery and equipment, and civilian aircraft rose at a faster pace in January than they did a month earlier, while the truck trailers index moved up after showing no change in the preceding month. By contrast, commercial furniture prices fell 0.4 percent in January, compared with a 0.1-percent gain in the prior month. The integrating and measuring instruments index also turned down, following an increase in December. Prices for x-ray and electromedical equipment fell more than they did in the previous month.

Prices for finished consumer foods decreased 1.4 percent in January, following a 0.1 percent increase a month earlier. Leading this downturn, the index for fresh and dry vegetables dropped 20.9 percent, following a 20.7-percent upsurge in December. Prices for eggs for fresh use also fell, after rising in the prior month. The beef and veal index declined at a faster rate than it did in the previous month. Prices for citrus fruits rose less in January than they did in December. By contrast, the index for soft drinks advanced 1.9 percent, compared with a 0.7-percent decrease in the preceding month. Prices for pork and bakery products also turned up in January, following declines a month earlier. The indexes for processed young chickens, finfish and shellfish, and shortening and cooking oils rose at a quicker pace than they did in December.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components climbed 0.8 percent in January, compared with a 0.4-percent advance in December. Prices for intermediate energy goods, materials for nondurable manufacturing, and materials for durable manufacturing increased at a faster rate in January than they did in December. The index for materials and components for construction turned up, after edging down in the preceding month. On the other hand, the index for intermediate foods and feeds fell at a quicker pace in January than it did a month earlier. Excluding foods and energy, prices for intermediate materials advanced 0.6 percent, after inching up at a 0.1-percent rate in December. (See table B.)

The index for intermediate energy goods jumped 2.7 percent in January, following a 1.8-percent increase in December. A surge in gasoline prices of 14.1 percent followed a 3.4-percent increase in December. The indexes for home heating oil, jet fuel, liquefied petroleum gas, and diesel fuel also advanced at a faster pace than they did in the prior month. Prices for industrial natural gas turned up in January, while the index for industrial electric power fell less than it did in December. By contrast, prices for natural gas to electric utilities declined 6.2 percent in January, compared with a 4.8-percent gain in the previous month. The indexes for commercial electric power and commercial natural gas also turned down in January.

Prices for materials for nondurable manufacturing climbed 1.3 percent in January, following a 0.4-percent increase in December. The index for liquid refinery gases surged 16.2 percent, after rising 7.4 percent in the previous month. The indexes for plastic resins and materials, inedible fats and oils, medicinal and botanical chemicals, and gray fabrics moved up in January, following declines in December. On the other hand, paperboard prices decreased 1.2 percent in January, after inching up at a 0.1-percent rate a month earlier. The index for nitrogenates also turned down, while prices for paper fell more than they did in the preceding month.

The index for materials and components for construction increased 0.3 percent in January, compared with a 0.1-percent decline in December. Softwood lumber prices jumped 1.5 percent in January, following a 0.3- percent decrease in the prior month. The indexes for wiring devices, hardwood lumber, and prefabricated wood buildings and components also rose, after falling in December. Prices for fabricated structural metal products, steel mill products, plastic construction products, and millwork advanced at a quicker rate than they did in the preceding month. Alternatively, the index for concrete products edged up 0.1 percent in January, following a 0.5-percent gain in December. Plywood prices fell more than they did a month earlier, while the indexes for gypsum products and for air conditioning and refrigeration equipment turned down in January.

Prices for materials for durable manufacturing climbed 1.0 percent in January, after posting a 0.5-percent gain in December. The index for primary nonferrous metals jumped 4.3 percent, following a 2.4-percent rise in the previous month. Prices for copper and brass mill shapes; semifinished steel mill products; cold finished steel bars; and hot rolled steel bars, plates, and structural shapes also increased more than in December. The indexes for hardwood lumber and industrial textile products advanced, following December declines. Conversely, prices for aluminum mill shapes turned down 0.4 percent in January, after inching up at a 0.1- percent rate a month earlier. The index for plywood fell more quickly in January, while prices for cold rolled steel sheet and strip rose more slowly than they did in the prior month.

The index for intermediate foods and feeds fell 1.0 percent in January, compared with a 0.5-percent decrease in December. This faster rate of decline can be attributed mainly to prices for beef and veal products, which dropped 11.0 percent in January after a 5.6-percent decrease in December. In addition, the indexes for fluid milk products and for portion control meat and meat-type products also fell at a quicker pace, while prices for confectionery materials and liquid milk products rose at a slower rate in January than they did a month earlier. The indexes for flour and for refined sugar and sugar byproducts turned down, after rising in December. By contrast, prepared animal feed prices advanced 0.2 percent, after declining 0.4 percent in the previous month. The pork index also turned up in January. Prices for shortening and cooking oils and processed young chickens increased more in January than they did in December.

Crude goods

The Producer Price Index for Crude Materials for Further Processing advanced at a 2.8-percent rate in January, after posting a 2.2-percent gain in December. Price increases for crude energy materials were larger in January than in December and outweighed larger price decreases for crude foodstuffs and feedstuffs. In addition, the index for basic industrial materials rose at a slightly faster pace than it did in December. (See table B.)

The index for crude energy materials climbed 12.5 percent in January, following a 4.3-percent increase in December. Natural gas prices led the acceleration by surging 17.8 percent, after advancing 6.1 percent in the previous month. The index for crude petroleum rose 8.1 percent in January, compared with a 2.6-percent gain a month earlier. On the other hand, coal prices dropped 1.6 percent, subsequent to a 0.4-percent rise in December.

The index for crude nonfood materials less energy gained 3.3 percent in January, its eighth consecutive increase, after rising 3.0 percent in December. The index for raw cotton increased 6.8 percent, following a 10.1- percent decline in the prior month. Prices for wastepaper also turned up, while indexes for aluminum base scrap and construction sand, gravel, and crushed stone rose more in January than they did in December. Conversely, the rate of increase for iron and steel scrap prices slowed from 8.8 percent in December to 5.7 percent in January. Prices for copper ores, gold ores, and copper base scrap also rose less in January than they did in the prior month.

The index for crude foodstuffs and feedstuffs fell 6.9 percent in January, following a 0.2-percent drop in December. January prices for slaughter cattle declined 17.4 percent, after slipping 3.5 percent the preceding month. Indexes for fresh vegetables (except potatoes), slaughter broilers and fryers, and wheat turned down in January. By contrast, prices for fluid milk fell 1.4 percent in January, after dropping 7.7 percent in December. The January index for slaughter turkeys rose more than in December, as did the indexes for corn, soybeans, and Irish potatoes for further processing. Unprocessed shellfish prices rose after falling.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries rose 11.3 percent in January, following a 4.2-percent increase in December. (Net output price indexes are not seasonally adjusted.) Prices received by the oil and gas extraction industry group jumped 16.0 percent, after advancing 5.2 percent in the prior month. The industry group indexes for metal ore mining and coal mining also increased at a quicker rate than they did a month earlier. Prices received by the mining support activities industry group rose in January. In January, the Producer Price Index for the Net Output of Total Mining Industries was 141.6 (December 1984=100), 12.4 percent above its year ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries increased 0.9 percent in January, after showing no change in the previous month. Prices received by the petroleum and coal products industry group rose 11.8 percent, compared with a 1.4-percent gain in the preceding month. The industry group indexes for chemicals, fabricated metal products, aerospace products and parts, and primary metals also advanced at a quicker rate than they did in December. Prices received by the automobile and light duty motor vehicle industry turned up, after falling in the prior month. By contrast, the industry group index for food manufacturing dropped 1.0 percent in January, after registering a 0.5- percent decline a month earlier. The industry group index for semiconductors and other electronic components also fell more than it did in the preceding month. Prices received by the industry group for communications equipment turned down in January, following gains in the previous month. The plastics and rubber products industry group index showed no change, after rising in December. In January, the Producer Price Index for the Net Output of Total Manufacturing Industries was 138.9 (December 1984=100), 2.4 percent above its year ago level.

Services. Among service industries in January, prices received by the industries for general medical and surgical hospitals, portfolio management, offices of physicians (except mental health), direct property and casualty insurance carriers, nursing care facilities, couriers, and newspaper publishers increased. Conversely, prices received by the industries for scheduled passenger air transportation, television broadcasting, lessors of nonresidential buildings (except miniwarehouse), software publishers, radio stations, passenger car rental, and long distance general freight trucking (truckload) fell in January.

The Producer Price Index data for January 2004 in this release were originally scheduled for release on Feb. 19, 2004.

The date of release for the February 2004 Producer Price Index data, originally scheduled for March 12, 2004, will be announced as soon as possible.

* Footnotes were added to tables 3 and 4 on March 26, 2004. For more information, see http://www.bls.gov/ppi/notice03262004.htm.

NAICS Conversion

The net output price indexes have been converted from the 1987 Standard Industrial Classification (SIC) basis to the 2002 North American Industry Classification System (NAICS) basis with the release of January 2004 indexes. The NAICS conversion involves major definitional changes to many of the currently published SIC-based indexes. SIC-based indexes are no longer produced or published. Historical index data based on the NAICS publication structure are 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/ppinaics.htm through a World Wide Web site.

Recalculation of Seasonal Adjustment Factors

Effective with this release, seasonal adjustment factors have been recalculated to reflect price-movement patterns during 2003 for stage-of- processing (SOP) and commodity-grouping indexes. This routine annual recalculation may affect previously published seasonally adjusted indexes and percent changes for January 1999 through December 2003. To request this information, 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.

The table below provides monthly seasonally adjusted percent changes for the three major SOP categories during 2003, based on former and recalculated seasonal factors. These percent changes include final price data through August 2003 and may differ from values shown elsewhere in this release.

Resampling of Industries

Effective with this release, the Producer Price Index (PPI) includes data for 65 resampled and 21 newly introduced industries classified according to the North American Industry Classification System (NAICS). 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 January 2004 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.

NAICS Code Industry

213111 Drilling oil and gas wells 221110 Electric power generation* 221121 Electric bulk power transmission and control* 221122 Electric power distribution 221210 Natural gas distribution 311222 Soybean processing 311225 Fats and oils refining and blending 311813 Frozen cakes, pies, and other pastries 312113 Ice manufacturing 313311 Broadwoven fabric finishing mills 314991 Rope, cordage, and twine mills 314992 Tire cord and tire fabric mills 315119 Other hosiery and sock mills 315192 Underwear and nightwear knitting mills 315221 Men's and boys' cut and sew underwear and nightwear 315231 Women's and girls' cut and sew lingerie 315291 Infants' cut and sew apparel 315992 Gloves and mittens 321113 Sawmills 321213 Engineered wood member (except truss) manufacturing 321214 Truss manufacturing 321911 Wood windows and doors 321912 Cut stock, resawing lumber, and planing 321918 Other millwork (including flooring) 321920 Wood containers and pallets 321991 Manufactured homes (mobile homes) 322215 Sanitary food containers (except folding) 326211 Tire manufacturing (except retreading) 327111 Vitreous plumbing fixtures and fittings 327113 Porcelain electrical supply manufacturing 327211 Flat glass manufacturing 327213 Glass container manufacturing 331319 Other aluminum rolling and drawing 331421 Copper rolling, drawing, and extruding 331422 Copper wire (except mechanical) drawing 331491 Other nonferrous metal rolling, drawing, and extruding 331511 Iron foundries 331512 Steel investment foundries 331513 Steel foundries (except investment) 332322 Sheet metal work

Resampling of Industries--Continued

332995 Other ordnance and accessories 333131 Mining machinery and equipment 333516 Rolling mill machinery and equipment 333611 Turbine and turbine generator set units 334310 Audio and video equipment 334517 Irradiation apparatus 334612 Prerecorded compact disc, tape, and record reproducing 334613 Magnetic and optical recording media manufacturing 335921 Fiber optic cable 335929 Other communication and energy wire 336612 Boat building 337910 Mattress manufacturing 339113 Surgical appliance and supplies 442110 Furniture stores* 442210 Floor covering stores* 443111 Household appliance stores* 443112 Radio, television, and other electronics stores* 443120 Computer and software stores* 444110 Home centers* 444120 Paint and wallpaper stores* 444130 Hardware stores* 444190 Other building material dealers* 444220 Nursery, garden center, and farm supply stores* 448110 Men's clothing stores* 448120 Women's clothing stores* 448140 Family clothing stores* 448210 Shoe stores* 451220 Prerecorded tape, compact disc, and record stores* 452111 Department stores (except discount department stores)* 452112 Discount department stores* 452900 Other general merchandise stores* 453930 Manufactured (mobile) home dealers* 483111 Deep sea freight transportation 483113 Coastal and Great Lakes freight transportation 483211 Inland water freight transportation 511140 Directory and mailing list publishers 511199 All other publishers 515111 Radio networks 515112 Radio stations 531210 Offices of real estate agents and brokers 531311 Residential property managers 531312 Nonresidential property managers 531320 Offices of real estate appraisers 531390 Other activities related to real estate 541330 Engineering services 621610 Home health care services

* For further discussion of these newly introduced PPIs, see "New Producer Price Indexes for Electric Power Generation, NAICS 221110, and Electric Bulk Power Transmission and Control, NAICS 221121" and "PPI Introduces Industries to Complete Coverage of the Retail Trade Sector" in the January 2004 issue of the PPI Detailed Report, or call the Section of Index Analysis and Public Information at (202) 691-7705.