November 2004 Producer Price Index

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The Producer Price Index for Finished Goods advanced 0.5 percent in November, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 1.7-percent gain in October and a 0.1-percent rise in September. At the earlier stages of processing, the index for intermediate goods went up 0.8 percent, compared with a 0.9-percent rise in October, while prices for crude goods jumped 8.7 percent in November, after moving up 4.3 percent in the previous month. (See table A.)

Among finished goods, the rate of increase in the index for finished energy goods slowed from 6.8 percent in October to 1.8 percent in November. Prices for finished consumer foods moved up 0.4 percent, following a 1.6- percent gain in the preceding month. The index for finished goods other than foods and energy increased 0.2 percent in November, following a 0.3- percent rise in the prior month.

Before seasonal adjustment, the Producer Price Index for Finished Goods inched down 0.1 percent in November to 151.7 (1982=100). From November 2003 to November 2004, prices for finished goods increased 5.0 percent. Over the same period, the finished energy goods index rose 19.8 percent, prices for finished goods other than foods and energy went up 1.9 percent, and the index for finished consumer foods advanced 2.9 percent. Prices for intermediate goods rose 9.8 percent for the 12 months ended November 2004, while the crude goods index jumped 25.5 percent.

Finished goods

Prices for finished energy goods rose at a 1.8-percent rate in November, compared with a 6.8-percent rate of increase in the prior month. The majority of this deceleration was due to a downturn in the gasoline index, which fell 0.7 percent after jumping 17.3 percent in October. Prices for home heating oil and diesel fuel also decreased, following gains a month earlier. The indexes for residential electric power and liquefied petroleum gas advanced less than they did in the prior month. By contrast, residential natural gas prices moved up 6.2 percent in November, after climbing 1.0 percent in the previous month. The index for lubricating and similar oils also rose more than it did in October.

Price increases for finished consumer foods slowed to 0.4 percent in November from 1.6 percent in October. The index for fresh and dry vegetables increased 4.4 percent in November, following a 34.2-percent upsurge in the preceding month. Prices for processed fruits and vegetables and pork also rose more slowly than they did in the previous month, while the indexes for fresh fruits and melons, beef and veal, and soft drinks turned down in November. By contrast, prices for processed young chickens rose 1.7 percent, following a 2.8-percent decline in October. The indexes for finfish and shellfish and bakery products also turned up, compared with decreases in the prior month. Prices for dairy products increased more rapidly in November than they did a month earlier, while the index for eggs for fresh use fell less than it did in October.

The capital equipment index advanced 0.2 percent in November, after moving up 0.4 percent in the preceding month. In November, rising prices for civilian aircraft; passenger cars; commercial furniture; truck trailers; and pumps, compressors, and equipment outweighed falling prices for light motor trucks, electronic computers, off-highway trucks, tractor shovel loaders, and heavy motor trucks.

The index for finished consumer goods other than foods and energy increased 0.2 percent in November, the same as in October. Rising prices were registered in November for passenger cars, household furniture, cigarettes, book publishing, and pharmaceutical preparations. These increases outweighed falling prices for light motor trucks; women's, girls', and infants' apparel; and sporting and athletic goods.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 0.8 percent in November, after advancing 0.9 percent in October. Prices rose in November for intermediate energy goods, materials for nondurable manufacturing, and durable manufacturing materials, while the indexes for construction materials and intermediate foods and feeds showed no change. Excluding foods and energy prices, the intermediate goods index moved up 0.4 percent in November, after rising 0.3 percent in October. (See table B.)

Price increases for intermediate energy goods slowed from October to November -- climbing 4.3 and 2.3 percent, respectively. In November, the jet fuels index rose 4.4 percent, following a 17.2-percent increase in October. The liquefied petroleum gas index also increased less rapidly than it did in October. Prices for gasoline, diesel fuel, and home heating oil turned down, after advancing in the previous month. By contrast, industrial electric power prices rose 3.5 percent in November, following a 2.4-percent decline in the preceding month. The indexes for industrial natural gas, commercial electric power, and natural gas to electric utilities also turned up in November. Prices for commercial natural gas and residual fuel rose more quickly in November than they did a month earlier.

The index for materials for nondurable manufacturing moved up 1.0 percent in November, compared with a 0.9-percent increase in October. Rising prices for liquid refinery gases, plastic resins and materials, fertilizer materials, alkalies and chlorine, and finished fabrics more than offset falling prices for inedible fats and oils, woodpulp, gray fabrics, cyclic intermediate chemicals, and processed yarns and threads.

Prices for materials for durable manufacturing increased 0.5 percent in November, following a 0.3-percent decline in October. Leading this upturn, the index for aluminum mill shapes rose 0.2 percent, after slipping 6.6 percent in the prior month. Prices for titanium mill shapes also turned up, after decreasing in October. The indexes for cold rolled steel sheet and strip, building paper and board, and plywood fell less in November than they did a month earlier. Alternatively, prices for copper cathode and refined copper declined 2.5 percent, compared with an 11.5- percent jump in the prior month. Prices for copper and brass mill shapes also turned down, after rising in the previous month. The rate of increase in the indexes for semifinished steel mill products and hot rolled steel bars, plates, and structural shapes slowed from October to November.

The index for materials and components for construction showed no change in November, after edging down 0.1 percent in October. Price increases for fabricated structural metal products, concrete products, asphalt felts and coatings, steel mill products, plastic construction products, and nonferrous wire and cable offset falling prices for softwood lumber, plywood, building paper and board, wiring devices, mineral wool for structural insulation, and switchgear and switchboard equipment.

Subsequent to a 1.9-percent decline in October, the intermediate foods and feeds index showed no change in November. Prepared animal feed prices fell 1.0 percent in November, following a 5.7-percent drop in the previous month. The indexes for natural, processed, and imitation cheese; flour; and processed young chickens turned up in November, after declining a month earlier. Prices for shortening and cooking oils decreased at a slower pace than they did in the prior month. By contrast, the beef and veal index moved down 1.6 percent in November, after climbing 3.2 percent in October. Prices for fluid milk products; refined sugar and byproducts; and dry, condensed, and evaporated milk products also turned down, following increases in October. The pork index rose less rapidly in November that it did in the preceding month.

Crude goods

The Producer Price Index for Crude Materials for Further Processing gained 8.7 percent in November, after rising 4.3 percent in October. Prices for crude energy materials rose at a higher rate in November than they did in the preceding month, while the crude foodstuffs and feedstuffs index advanced, after posting a decline in October. By contrast, the rate of increase in prices for basic industrial materials slowed from October to November. (See table B.)

The crude energy materials index rose 17.0 percent in November, after increasing 7.9 percent in October. The natural gas index jumped 43.7 percent in November, compared with a 2.7-percent increase in the prior month. Coal prices were unchanged in November, following a 1.9-percent decrease in October. By contrast, crude petroleum prices fell 11.1 percent, after climbing 18.4 percent in the previous month.

Prices for crude foodstuffs and feedstuffs rose 1.8 percent in November, following a 0.8-percent decline in October. A 12.3-percent decrease in the soybean index in October was followed by a 1.8-percent rise in November. The wheat, unprocessed shellfish, and unprocessed finfish indexes also turned up in November. Corn prices fell less in November than they did in October. The indexes for slaughter hogs and fluid milk increased more in November than they did in the previous month. By contrast, prices for slaughter cattle fell 2.8 percent in November, after decreasing 1.2 percent in October. The fresh and dry vegetables index increased less in November than it did a month earlier. Prices for fresh fruits and melons and slaughter broilers and fryers fell, after increasing in the preceding month.

Prices for basic industrial materials increased 2.5 percent in November, after rising 5.4 percent in October. The iron and steel scrap index went up 8.0 percent, following a 15.4-percent advance in October. Prices for copper base scrap, aluminum base scrap, and gold ores also rose less in November than they did in the previous month. The wastepaper index fell in November, after registering a gain in October. By contrast, the raw cotton index increased 0.1 percent, compared with a 12.3-percent drop in October. The indexes for leaf tobacco and phosphates increased at a faster rate in November than they did in October.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries climbed 13.6 percent in November, after posting a 6.8-percent rise in October. (Net output price indexes are not seasonally adjusted.) Much of this acceleration can be attributed to the index for the natural gas liquid extraction industry, which surged 34.1 percent in November, following a 4.9-percent gain a month earlier. Prices received by the industries for oil and gas operations support activities, coal mining support activities, and industrial sand mining also advanced at a faster pace than they did in October. The index for the bituminous coal and lignite surface mining industry fell less in November than it did in the prior month. By contrast, price increases received by the oil and gas well drilling industry slowed from 5.8 percent in October to 1.2 percent in November. The industry indexes for the crude petroleum and natural gas extraction and gold ore mining also rose at a slower rate than they did in the preceding month. Prices received by the bituminous coal underground mining industry were unchanged in November, after moving up a month earlier. In November, the Producer Price Index for the Net Output of Total Mining Industries was 180.5 (December 1984=100), 48.6 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries turned down 0.3 percent in November, following a 1.7-percent advance in October. Prices received by petroleum and coal product manufacturers fell 3.5 percent in November, compared with an 11.2- percent gain in the preceding month. The index for the transportation equipment industry group also moved down, after rising in October. Prices received by the producers of plastics and rubber products, machinery, and chemicals increased at a slower rate in November than they did in the prior month. The industry group indexes for electrical equipment and appliance manufacturers, beverage and tobacco producers, and paper manufacturers were unchanged in November, following advances in October, while prices received by the computer and electronic products industry group declined, after showing no change in the previous month. Conversely, the industry group index for food manufacturing was unchanged in November, following a 0.3- percent decrease a month earlier. Prices received by producers of furniture and related products, primary metals, and textile mill products climbed more than they did in October. The index for the printing and related support activities industry group turned up in November. In November, the Producer Price Index for the Net Output of Total Manufacturing Industries was 146.0 (December 1984=100), 6.0 percent above its year-ago level.

Services. Among services industries in November, the indexes increased for investment bankers and securities dealers, general medical and surgical hospitals, direct property and casualty insurance carriers, direct life insurance carriers, long-distance general freight trucking companies (both truckload and less-than-truckload haulers), securities brokerages, television broadcasters, nonresidential property managers, and periodical publishers. By contrast, the indexes decreased in November for scheduled passenger air transportation, casino hotels, offices of lawyers, and wired telecommunications.