March 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 0.5 percent in March, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.1-percent gain in February and a 0.6-percent rise in January. At the earlier stages of processing, prices for both intermediate goods and crude goods moved up 0.7 percent in March, after increasing 0.9 and 2.5 percent, respectively, in the prior month. (See table A.)

More than half of the acceleration in finished goods prices was due to the finished consumer foods index, which advanced 1.5 percent after edging up 0.2 percent in February. The index for finished goods other than foods and energy increased 0.2 percent, following a 0.1-percent gain in February. Prices for finished energy goods climbed 0.6 percent in March, after rising 0.2 percent in February.

During the first quarter of 2004, prices for finished goods advanced at a seasonally adjusted annual rate of 5.1 percent, after rising at a 2.8- percent rate during the final three months of 2003. Excluding prices for foods and energy, the finished goods index increased at a 2.1-percent seasonally adjusted annual rate for the three months ended March 2004, following a 1.3-percent rate of increase in the last quarter of 2003. Among prices for raw and partially processed goods, the seasonally adjusted annual rate of increase for intermediate goods prices accelerated from 2.7 percent to 10.1 percent from the final quarter of 2003 to the first quarter of 2004. The crude goods index moved up at a 26.3-percent seasonally adjusted annual rate during the first quarter of 2004, after advancing at a 23.6-percent rate in the last three months of 2003. (See summary below.)

Before seasonal adjustment, the finished goods index increased 0.6 percent to 146.2 (1982=100). From March 2003 to March 2004, prices for finished goods climbed 1.4 percent. During the same period, the finished consumer foods index jumped 5.3 percent and prices for finished goods other than foods and energy rose 0.7 percent. By contrast, the index for finished energy goods declined 0.4 percent for the 12 months ended March 2004. At the earlier stages of processing, intermediate goods prices advanced 1.2 percent and the crude goods index fell 1.6 percent.

Crude materials for further processing -32.5 24.7 18.5 -37.0 -4.6 23.6 26.3 Foodstuffs and feedstuffs -7.6 4.5 24.0 10.2 37.0 36.4 13.9 Crude energy materials -52.9 61.5 12.3 -62.9 -38.7 3.2 24.3 Crude nonfood materials less energy -9.9 12.6 20.8 -4.5 29.4 46.2 57.2 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.

Finished goods

The finished consumer foods index rose 1.5 percent in March, following a 0.2-percent increase in the previous month. Fresh and dry vegetable prices advanced 13.0 percent, subsequent to a 7.8-percent decline in February. The indexes for beef and veal, finfish and shellfish, and shortening and cooking oils also turned up, after falling a month earlier. Prices for dairy products rose more rapidly in March than they did in February, while the index for fresh fruits and melons fell at a slower rate over the same period. Conversely, processed young chicken prices climbed 1.5 percent in March, following a 7.3-percent gain in the prior month. The indexes for pork, eggs for fresh use, and processed turkeys also rose less quickly from February to March. Soft drink prices decreased at a faster rate during the same period. The index for finished consumer foods increased at a 1.1-percent seasonally adjusted annual rate in the first quarter of 2004, after advancing at an 8.1-percent rate in the last three months of 2003.

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 Mar. 2.9 .5 .6 1.2 7.1 -6.1 2.7 -1.6 r=revised. Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for November 2003 have been revised to reflect the availability of late reports and corrections by respondents.

Prices for finished consumer goods other than foods and energy moved up 0.3 percent in March, after showing no change in the previous month. The light motor trucks index rose 0.8 percent, compared with a 1.9-percent decrease in February. Prices for pharmaceutical preparations and men's and boys' apparel also turned up in March, while the indexes for pet food and passenger cars increased more quickly than they did in February. On the other hand, prices for sanitary paper products decreased 2.6 percent in March, after inching up 0.1 percent a month earlier. The index for tires, tubes, and tread showed no change, following a rise in February. Cigarette prices fell, after showing no change in the previous month. The indexes for alcoholic beverages and household furniture rose less in March than they did in the prior month. Prices for finished consumer goods excluding foods and energy advanced at a 2.3-percent seasonally adjusted annual rate in the first quarter of 2004, after increasing at a 1.3-percent rate in the last quarter of 2003.

The capital equipment index rose 0.3 percent in March, after showing no change in the prior month. Prices for light motor trucks advanced 0.8 percent, following a 1.9-percent drop in the previous month. The commercial furniture index increased in March, compared with no change a month earlier. Prices rose faster for truck trailers, agricultural machinery and equipment, and civilian aircraft in March than in February. The index for communication and related equipment was unchanged, following a 0.2-percent decrease in the prior month. Alternatively, the index for integrating and measuring instruments declined 1.1 percent in March, after rising 1.2 percent in February. Prices for x-ray and electromedical equipment and for plasticworking machinery also turned down. The index for tools, dies, jigs, fixtures, and industrial molds fell more in March than it did in the previous month. During the first three months of 2004, the capital equipment index rose at a 2.3-percent seasonally adjusted annual rate, compared with a 1.4-percent rate of increase in the fourth quarter of 2003.

Prices for finished energy goods climbed 0.6 percent in March, following a 0.2-percent increase in February. The index for liquefied petroleum gas moved up 0.4 percent, after tumbling 17.2 percent in the prior month. Prices for home heating oil, diesel fuel, and asphalt also turned up in March. By contrast, residential natural gas prices slipped 0.5 percent in March, after advancing 2.6 percent in the previous month. The indexes for residential electric power and kerosene also turned down, while prices for gasoline rose less in March than they did in February. The seasonally adjusted annual rate of increase in the index for finished energy goods accelerated from 1.6 percent to 23.5 percent from the final quarter of 2003 to the first quarter of 2004.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 0.7 percent in March, after rising 0.9 percent in February. The indexes for durable manufacturing materials, nondurable manufacturing materials, and intermediate energy goods rose less in March than they did in February. Conversely, prices for intermediate foodstuffs and feedstuffs advanced more quickly than they did in the preceding month. The index for materials and components for construction increased at the same rate in March as it did in February. The index for intermediate goods other than foods and energy moved up 0.6 percent, after gaining 0.9 percent in February. (See table B.)

Subsequent to a 3.5-percent climb in February, the index for materials for durable manufacturing rose 2.0 percent. Prices for cold rolled steel sheet and strip increased 3.0 percent, after a 12.4-percent advance in February. Likewise, the indexes for building paper and board, primary aluminum (except extrusion billet), plywood, and semifinished steel mill products rose more slowly in March than they did in the previous month. Aluminum mill shape prices fell, after rising in February. By contrast, prices for prepared paint increased 0.4 percent, after a 0.3-percent decline in the preceding month. The indexes for unprocessed filament yarns and textile bags turned up in March, while the index for copper cathode and refined copper rose at a quicker pace than it did in the prior month. Prices for materials for durable manufacturing advanced at a 29.7-percent seasonally adjusted annual rate from December 2003 to March 2004, after registering an 8.7-percent rate of increase during the previous three months.

The index for materials for nondurable manufacturing increased 0.4 percent in March, after rising 0.7 percent in the preceding month. Higher prices for plastic resins and materials, inedible fats and oils, potassium and sodium compounds, phosphates, and intermediate basic organic chemicals outweighed falling prices for primary basic organic chemicals, nitrogenates, alkalies and chlorine, gray fabrics, and finished fabrics. From December 2003 to March 2004, the index for materials for nondurable manufacturing advanced at a 9.9-percent seasonally adjusted annual rate, following a 5.4-percent rate of increase during the final quarter of 2003.

Prices for intermediate energy goods rose 0.5 percent in March, after gaining 0.6 percent in the preceding month. This March increase was led by diesel fuel prices, which advanced 8.5 percent. Rising prices for home heating oil, natural gas to electric utilities, gasoline, and jet fuels also pushed the intermediate energy goods index higher. On the other hand, the commercial natural gas index fell 2.1 percent in March. Price declines also were posted by the indexes for industrial electric power, residual fuel, industrial natural gas, and commercial electric power. From December 2003 to March 2004, prices for intermediate energy goods rose at a 16.3- percent seasonally adjusted annual rate, after falling at a 0.7-percent annual rate for the previous quarter.

Prices for intermediate foods and feeds posted a 2.9-percent gain in March, following a 0.2-percent rise in February. The index for prepared animal feeds jumped 5.6 percent, after a 0.5-percent dip in the preceding month. Prices for beef and veal, shortening and cooking oils, fluid milk products, and refined sugar and byproducts turned up in March, while the index for natural, processed, and imitation cheese advanced at a quicker rate than it did in the prior month. Alternatively, price increases for processed young chickens slowed, advancing 1.5 percent after a February gain of 7.3-percent. The indexes for pork and butter rose more slowly in March than in February, and flour prices turned down. The index for intermediate foods and feeds increased at a seasonally adjusted annual rate of 8.6 percent during the first quarter of 2004, after rising at a 20.9- percent annual rate for the previous quarter.

The index for materials and components for construction climbed 1.4 percent in March, after posting a 1.4-percent rise in the preceding month. Price gains in fabricated structural metal products, softwood lumber, plywood, steel mill products, nonferrous wire and cable, and wiring devices outweighed falling prices for asphalt felts and coatings, mineral wool for structural insulation, concrete products, and plumbing fixtures and brass fittings. During the first quarter of 2004, prices for materials and components for construction advanced at a 12.9-percent seasonally adjusted annual rate, following a 2.6-percent annual rate of increase during the prior quarter.

Crude goods

The rate of increase in the Producer Price Index for Crude Materials for Further Processing slowed from 2.5 percent in February to 0.7 percent in March. Prices for crude energy materials fell, after showing no change in the previous month. The basic industrial materials index rose at a slower pace than it did in the prior month. By contrast, prices for crude foodstuffs and feedstuffs advanced more in March than they did in the preceding month. (See table B.)

The crude energy materials index decreased 6.1 percent in March, after showing no change in the prior month. Prices for natural gas dropped 14.1 percent, compared with a 0.6-percent decline in February. The coal index inched down 0.2 percent, after increasing 8.7 percent a month earlier. On the other hand, crude petroleum prices went up 8.1 percent in March, following a 1.9-percent fall in the previous month. During the first quarter of 2004, the index for crude energy materials advanced at a 24.3- percent seasonally adjusted annual rate, after rising at a 3.2-percent rate in the preceding calendar quarter.

Prices for crude nonfood materials less energy moved up 2.7 percent in March, following a 5.5-percent gain in the previous month. Much of this deceleration was due to the index for iron and steel scrap, which rose 6.7 percent in March after jumping 21.1 percent in February. Prices for copper base scrap, waste paper, and aluminum base scrap also rose less than they did in the prior month, while the indexes for leaf tobacco and pulpwood fell at a faster pace than they did a month earlier. Alternatively, raw cotton prices decreased 2.2 percent in March, compared with a 12.0-percent decline in the preceding month. The index for gold ores also fell less than it did in February, while prices for construction sand, gravel, and crushed stone turned up, after edging down in the previous month. For the quarter ended March 2004, the index for crude nonfood materials less energy advanced at a 57.2-percent seasonally adjusted annual rate, following a 46.2-percent rate of increase in the prior quarter.

Prices for crude foodstuffs and feedstuffs rose 7.1 percent in March, compared with a 3.6-percent gain in the preceding month. The slaughter cattle index turned up 13.0 percent, after falling 1.6 percent in the prior month. Prices for fresh and dry vegetables and unprocessed finfish also increased, following declines in February. The indexes for fluid milk, soybeans, and corn advanced at a quicker rate than they did a month earlier. By contrast, prices for slaughter broilers and fryers decreased 2.0 percent in March, after jumping 19.8 percent in the preceding month. The indexes for slaughter hogs and unprocessed shellfish also turned down, after rising in the previous month, while wheat prices fell more than they did in February. Subsequent to a 36.4-percent seasonally adjusted annual rate of advance during the fourth quarter of 2003, the crude foodstuffs and feedstuffs index rose at a 13.9-percent rate during the first quarter of 2004.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries fell 4.0 percent in March, following a 1.5-percent decrease in February. (Net output price indexes are not seasonally adjusted.) Most of this faster rate of decline is attributable to prices received by the natural gas liquid extraction industry, which dropped 13.2 percent in March after falling 1.9 percent a month earlier. The index for the bituminous coal underground mining industry turned down, following an increase in the prior month, while prices received by the industry for bituminous coal and lignite surface mining rose at a slower pace in March than they did in February. By contrast, the index for the crude petroleum and natural gas extraction industry declined 2.3 percent, after decreasing 3.0 percent in February. Prices received by the industry for oil and gas operations support activities showed no change in March, following a decline in the previous month. The index for the oil and gas well drilling industry turned up, after falling in the preceding month. In the first quarter of 2004, the Producer Price Index for the Net Output of Total Mining Industries rose at a 22.8-percent annual rate, compared with an 8.3-percent rate of advance in the last quarter of 2003. In March, this index was 133.9 (December 1984=100), 20.8 percent below its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries increased 0.6 percent in March, following a 0.3- percent rise in February. Prices received by the food manufacturing industry group jumped 1.6 percent, after advancing 0.3 percent in the prior month. The indexes for the furniture and related products; electrical equipment, appliance, and components; and machinery manufacturing industry groups also moved up at a quicker rate in March. Prices received by manufacturers of petroleum and coal products, leather and allied products, and transportation equipment turned up, compared with February declines. On the other hand, the index for plastic and rubber product manufacturing fell 0.2 percent in March, after increasing 0.9 percent a month earlier. Prices received by manufacturers of beverage and tobacco products also declined, following February gains. The indexes for nonmetallic mineral product manufacturing and primary metal manufacturing rose at a slower pace in March than they did in the prior month. In the first quarter of 2004, the Producer Price Index for the Net Output of Total Manufacturing Industries advanced at a 7.5-percent annual rate, compared with a 1.8- percent rate of increase in the last quarter of 2003. In March, this index was 140.2 (December 1984=100), 1.1 percent above its year-ago level.

Services. Among services industries in March, prices received by offices of lawyers edged down 0.2 percent, after rising 3.9 percent in the preceding month. The indexes for scheduled passenger air transportation, offices of physicians (except mental health), passenger car rental, local trucking of specialized freight (excluding used goods), and for the truck, utility trailer, and RV rental and leasing industry also turned down in March. Prices received by the industry for long distance general freight trucking by the truckload increased less than they did in February. The index for software publishers showed no change in March, after rising in the prior month. By contrast, prices received by the hotels and motels industry (except casino hotels) jumped 3.3 percent, compared with a 0.1- percent advance in February. The index for the television broadcasting industry also increased at a faster pace in March than it did in the previous month. Prices received by lessors of nonresidential buildings (excluding miniwarehouses), general medical and surgical hospitals, couriers, and residential property managers rose, after falling in February. The index for the cellular and other wireless carriers industry showed no change in March, following a 1.1-percent drop a month earlier.

The Bureau of Labor Statistics has not scheduled a revised release date for the April 2004 PPI, originally scheduled for Thursday, May 13. If a postponement is necessary, it will be announced at least one day ahead of time on the BLS website and through a news advisory.