February 2004 Producer Price Index

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The Bureau of Labor Statistics of the U.S. Department of Labor reported today that the Producer Price Index for Finished Goods edged up 0.1 percent in February, seasonally adjusted. This increase followed a 0.6- percent jump in January and a 0.2-percent increase in December. At the earlier stages of processing, prices received by manufacturers of intermediate goods rose 0.9 percent in February, after advancing 0.8 percent in January. The crude goods index increased 2.5 percent, compared with a 2.8-percent rise in the prior month. (See table A.)

2004 Jan. .6 -1.4 4.7 .3 3.3 .8 2.8 Feb. .1 .2 .2 .1 2.1 .9 2.5 r=revised. Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for October 2003 have been revised to reflect the availability of late reports and corrections by respondents.

Among finished goods, the rate of increase in the index for finished energy goods slowed to 0.2 percent in February from 4.7 percent in January. Prices for finished goods other than foods and energy edged up 0.1 percent in February, after rising 0.3 percent in the preceding month. By contrast, the finished consumer foods index turned up 0.2 percent, following a 1.4- percent drop in January.

Before seasonal adjustment, the Producer Price Index for Finished Goods decreased 0.1 percent to 145.3 (1982=100). From February 2003 to February 2004, finished goods prices rose 2.1 percent. During the same period, the indexes for finished energy goods, finished consumer foods, and finished goods other than foods and energy moved up 3.9, 4.0, and 1.0 percent, respectively. At the earlier stages of processing, prices for intermediate goods increased 2.7 percent for the 12 months ended in February 2004, while the index for crude goods rose 10.7 percent.

Finished goods

Prices for finished energy goods increased 0.2 percent in February, after advancing 4.7 percent in the prior month. The rate of increase in the gasoline index slowed to 2.0 percent in February from 14.1 percent in January. Prices for home heating oil, liquefied petroleum gas, and diesel fuel turned down, compared with increases in the previous month. On the other hand, the index for residential natural gas rose 2.6 percent in February, after posting a 1.4-percent increase in January. The rate of increase for residential electric power prices picked up in February, advancing 0.4 percent compared with a 0.1-percent rise in the prior month.

2004 Jan. -1.0 2.7 .6 3.8 -6.9 12.5 3.3 13.7 Feb. .2 .6 .9 2.7 3.6 0 5.5 10.7 r=revised. Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for October 2003 have been revised to reflect the availability of late reports and corrections by respondents.

The index for finished goods other than foods and energy increased 0.1 percent, following a 0.3-percent increase in January. In February, rising prices for passenger car pneumatic tires, alcoholic beverages, passenger cars, surgical appliances, railroad cars, and industrial material handling equipment slightly outweighed falling prices for light motor trucks, communication and related equipment, pharmaceutical preparations, and household appliances.

Prices for finished consumer foods turned up 0.2 percent in February, after declining 1.4 percent in the prior month. In February, increasing prices for processed young chickens, eggs for fresh use, dairy products, and pork outweighed falling prices for fresh and dry vegetables, beef and veal, fresh fruits and melons, and finfish and shellfish.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 0.9 percent in February, after registering a 0.8- percent increase in the previous month. Prices for materials for durable manufacturing, materials and components for construction, intermediate energy goods, materials for nondurable manufacturing, and intermediate foods and feeds rose. Excluding food and energy prices, the index for intermediate materials went up 0.9 percent, following a 0.6-percent gain in January. (See table B.)

Prices for materials for durable manufacturing climbed 3.5 percent in February, compared with a 1.0-percent gain in the preceding month. The cold rolled steel sheet and strip index jumped 12.4 percent, after moving up 0.4 percent a month earlier. Prices for primary nonferrous metals; hot rolled steel bars, plates, and structural shapes; and semifinished steel mill products also increased at a quicker rate than they did in January. The indexes for building paper and board, aluminum mill shapes, and plywood turned up, following declines in the prior month. On the other hand, prepared paint prices fell 0.3 percent in February, after rising 0.4 percent in the previous month. The indexes for hardwood lumber, cold finished steel bars, and copper and brass mill shapes rose less than they did in January, while prices for industrial textile products showed no change in February, after advancing a month earlier.

The index for materials and components for construction moved up 1.4 percent in February, following a 0.3-percent increase in the prior month. Plywood prices surged 15.2 percent, after falling 9.1 percent a month earlier. The indexes for mineral wool for structural insulation and gypsum products also turned up in February, following declines in the previous month. Prices for fabricated structural metal products, concrete products, softwood lumber, and steel mill products rose more than they did in January. By contrast, the plastic construction products index moved down 1.4 percent in February, compared with a 1.0-percent gain in the preceding month. Prices for architectural coatings and molded case circuit breakers also turned down, after advancing in January. The indexes for millwork and hardwood lumber rose less than they did in the previous month.

Price increases for intermediate energy goods slowed from 2.7 percent in January to 0.6 percent in February. Half of this deceleration was due to the index for gasoline, which rose 2.0 percent after jumping 14.1 percent in the previous month. Prices for jet fuels also rose more slowly in February. The indexes for diesel fuel, liquefied petroleum gas, and home heating oil turned down, following gains a month earlier. Alternatively, the natural gas to electric utilities index advanced 4.4 percent in February, compared with a 6.2-percent drop in the prior month. The indexes for commercial electric power, commercial natural gas, and industrial electric power also turned up, after falling in January, while industrial natural gas prices increased more in February than they did in the preceding month.

The index for materials for nondurable manufacturing rose 0.7 percent in February, following a 1.3-percent gain in the prior month. This deceleration largely reflects smaller price increases for basic organic chemicals, which rose 0.8 percent in February after posting a 6.0-percent increase in January. The leather index also advanced at a slower rate than it did in the preceding month. Prices for processed yarns and threads showed no change, following a gain in the previous month. The finished fabrics index fell, after inching up in January. On the other hand, paper prices turned up 0.6 percent in February, after decreasing 0.8 percent a month earlier. The indexes for paint materials and fertilizer materials also advanced, following declines in the preceding month, while prices for paperboard fell less than they did in January.

The intermediate foods and feeds index turned up 0.2 percent in February, after falling 1.0 percent in the prior month. In February, rising prices for processed young chickens; flour; pork; natural, processed, and imitation cheese; butter, and liquid milk products outweighed falling prices for beef and veal, prepared animal feeds, shortening and cooking oils, confectionery materials, and fluid milk products.

Crude goods

The Producer Price Index for Crude Materials for Further Processing advanced at a 2.5-percent rate in February, after posting a 2.8-percent gain in January. Prices for crude energy materials showed no change in February, after rising in the prior month. By contrast, the index for crude foodstuffs and feedstuffs turned up, after falling in January, while prices for basic industrial materials increased at a faster pace in February than they did in the prior month. (See table B.)

The index for crude energy materials showed no change in February, following a 12.5-percent rise in the preceding month. Natural gas prices moved down 0.6 percent, after jumping 17.8 percent a month earlier. The index for crude petroleum declined 1.9 percent, compared with an 8.1- percent gain in January. On the other hand, coal prices went up 8.7 percent in February, after registering a 1.6-percent drop in the prior month.

The index for crude foodstuffs and feedstuffs advanced 3.6 percent in February, following a 6.9-percent decrease in the previous month. Prices for slaughter broilers and fryers rose 19.8 percent, compared with a 2.6- percent decline in January. The indexes for slaughter hogs and fluid milk also turned up, after declining a month earlier. The indexes for slaughter cattle, fresh vegetables (except potatoes), and alfalfa hay decreased at a slower rate than they did in the prior month. Alternatively, slaughter turkey prices fell 2.0 percent in February, following a 9.5-percent gain in the preceding month. The unprocessed finfish index also turned down, following increases in January, while prices for wheat and fresh fruits and melons declined more in February than they did in the prior month.

The index for crude nonfood materials less energy increased 5.5 percent in February, after moving up 3.3 percent a month earlier. Accounting for the majority of this acceleration, iron and steel scrap prices grew 21.1 percent, following a 5.7-percent gain in the preceding month. The indexes for copper base scrap, wastepaper, and phosphates also advanced at a faster rate than they did in January. By contrast, raw cotton prices dropped 12.0 percent in February, after registering a 6.8- percent increase in the previous month. The indexes for gold ores; hides and skins; and construction, sand, gravel, and crushed stone also turned down, following gains in the prior month. Aluminum base scrap prices rose less than they did in January, while the index for leaf tobacco fell more in February than it did a month earlier.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries fell 1.5 percent in February, following an 11.3-percent jump in January. (Net output price indexes are not seasonally adjusted.) Prices received by the crude petroleum and natural gas extraction industry declined 3.0 percent, after advancing 16.0 percent in the prior month. The industry indexes for natural gas liquid extraction, oil and gas operations support activities, gold ore mining, and oil and gas well drilling also turned down in February, compared with increases a month earlier. Conversely, prices received by the industry for bituminous coal and lignite surface mining turned up 3.5 percent, following a 2.4-percent drop in January. In February, the Producer Price Index for the Net Output of Total Mining Industries was 139.5 (December 1984=100), 1.5 percent above its year ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries increased 0.3 percent in February, after rising 0.9 percent in the previous month. Prices received by the chemical manufacturing industry group moved up 0.4 percent, compared with a 1.0- percent gain in the preceding month. The industry group indexes for petroleum and coal products, textile mills, leather and allied products, and transportation equipment fell, after rising in January. Prices received by the beverage and tobacco industry group advanced at slower rate from January to February. By contrast, the industry group index for food manufacturing edged up 0.3 percent in February, after registering a 1.0- percent decline a month earlier. The industry group index for furniture and related products also turned up, following a decline in January. Prices received by the industry groups for plastics and rubber products and for nonmetallic mineral products rose, after showing no change a month earlier. In February, the Producer Price Index for the Net Output of Total Manufacturing Industries was 139.3 (December 1984=100), 1.2 percent above its year ago level.

Services. Among service industries in February, prices received by offices of lawyers, long-distance general freight trucking (truckload), direct property and casualty insurance carriers, offices of physicians (except mental health), passenger car rental, and scheduled passenger air transportation increased. On the other hand, the indexes for lessors of nonresidential buildings (except miniwarehouse), wired telecommunications carriers, general medical and surgical hospitals, cellular and other wireless carriers, deep sea freight transportation, and couriers declined in February.

The Producer Price Index data for February 2004 in this release were originally scheduled for release on March 12, 2004.

The date of release for the March 2004 Producer Price Index data, originally scheduled for April 8, 2004, will be announced as soon as possible.