January 2005 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 0.3 percent in January, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.3-percent decline in December and a 0.7-percent rise in November. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 0.4 percent in January, after inching down 0.1 percent in December. The crude goods index fell 2.0 percent, following a 3.0-percent drop in December. (See table A.)

2005 Jan. .3 -.2 -1.0 .8 4.2 .4 -2.0 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 2004. In addition, indexes for September 2004 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 in January, prices for finished goods other than foods and energy climbed 0.8 percent, compared with a 0.2-percent gain in December. The index for finished energy goods decreased at a slower rate in January than it did in December. By contrast, prices for finished consumer foods turned down in January, after edging up in December.

Before seasonal adjustment, the Producer Price Index for Finished Goods advanced 0.7 percent in January to 151.5 (1982=100). From January 2004 to January 2005, finished goods prices increased 4.2 percent. During the same period, the finished energy goods index jumped 9.8 percent, prices for finished goods other than foods and energy rose 2.7 percent, and the index for finished consumer foods went up 4.1 percent. At the earlier stages of processing, prices for intermediate goods moved up 8.7 percent during the 12 months ended January 2005, while the crude goods index gained 10.8 percent.

2005 Jan. .9 -1.3 .8 8.7 1.9 -4.5 -2.5 10.8 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 2004. In addition, indexes for September 2004 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.

Finished goods

Prices for finished consumer goods other than foods and energy climbed 0.9 percent in January, after inching up 0.1 percent in December. The cigarettes index rose 3.4 percent in January, compared with a 0.1-percent increase a month earlier. Prices for light motor trucks and pharmaceutical preparations also went up faster than they did in December. The indexes for alcoholic beverages, passenger cars, and sporting and athletic goods turned up in January, following declines in the preceding month. Prices for women's, girls', and infants' apparel, as well as household furniture, advanced after showing no change in the previous month. Alternatively, the index for cosmetics and other toilet preparations decreased 0.2 percent in January, following a 0.5-percent gain in December. Prices for platinum and karat gold jewelry also turned down, while the pet food index fell, after remaining unchanged in December. (See table 2.)

The finished energy goods index moved down 1.0 percent in January, following a 2.5-percent decline in December. In January, falling prices for gasoline, residential natural gas, and liquefied petroleum gas outweighed increasing prices for residential electric power and home heating oil.

The capital equipment index advanced 0.6 percent in January, after posting a 0.2-percent gain in the preceding month. Prices for communication and related equipment turned up 0.5 percent, following a 0.9- percent decrease in December. The indexes for passenger cars and truck trailers also increased, after falling a month earlier. Prices for heavy motor trucks, light motor trucks, and printed circuit board manufacturing machinery moved up more in January than they did in December. The index for construction machinery and equipment rose 0.9 percent, following no change in December, while prices for integrating and measuring instruments were unchanged in January, after declining in the prior month. By contrast, the index for electronic computers dropped 6.1 percent, compared with a 0.4-percent dip in December. Price increases slowed from December to January for railroad equipment, while the indexes for transformers and power regulators, x-ray and electromedical equipment, and metal cutting machine tools turned down.

Prices for finished consumer foods went down 0.2 percent in January, after edging up 0.1 percent in the previous month. The eggs for fresh use index fell 23.5 percent, following a 22.9-percent upsurge in December. Prices for fresh fruits and melons, soft drinks, and processed young chickens also moved down, after rising a month earlier. The indexes for beef and veal and dairy products advanced less in January than they did in December. By contrast, price decreases for fresh and dry vegetables slowed from 26.4 percent in December to 12.0 percent in January. The roasted coffee index jumped 10.8 percent, following no change in the prior month. Prices for confectionery end products and processed turkeys increased more in January than they did in December.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 0.4 percent in January, after inching down 0.1 percent in the previous month. Prices for materials for durable manufacturing, materials and components for construction, materials for nondurable manufacturing, and intermediate foods and feeds rose in January, while the intermediate energy goods index declined in January. Excluding foods and energy prices, the index for intermediate goods advanced 0.8 percent, following a 0.5-percent gain in December. (See table B.)

Prices for materials for durable manufacturing increased 1.8 percent in January, compared with a 1.1-percent rise in the preceding month. The aluminum mill shapes index advanced 4.0 percent, following a 2.1-percent gain in the previous month. The indexes for cold rolled steel sheet and strip, cement, and prepared paint also increased more than they did in December. Prices for adhesives and sealants and hardwood lumber turned up, after falling a month earlier. Alternatively, the hot rolled steel bars, plates, and structural shapes index declined 0.5 percent in January, after moving up 2.1 percent in the previous month. Prices for plywood, copper cathode and refined copper, copper and brass mill shapes, and cold finished steel bars rose less than they did in December, while the semifinished steel mill products index decreased in January, after showing no change in the prior month. (See table 2.)

Subsequent to a 0.5-percent rise in December, prices for materials and components for construction went up 1.0 percent in January. The concrete products index advanced 2.2 percent in January, following a 0.6-percent gain in the preceding month. Prices for fabricated structural metal products, softwood lumber, heating equipment, and paving mixtures and blocks also increased more than they did in December, while the indexes for plastic construction products and treated wood turned up in January. By contrast, prices for asphalt felts and coatings turned down 3.5 percent in January, after posting a 1.5-percent gain in the previous month. The indexes for millwork and metal valves (except fluid power) also declined, following increases a month earlier. Prices for plywood, steel mill products, and nonferrous wire and cable rose less than they did in the December.

The rate of increase in the index for materials for nondurable manufacturing slowed from 1.2 percent in December to 0.6 percent in January. Plastic resins and materials prices rose 2.3 percent, after increasing 4.5 percent in December. The indexes for intermediate basic organic chemicals, paper, fertilizer materials, paint materials, and medicinal and botanical chemicals turned down in January. Alternatively, the fats and oils (inedible) index jumped 12.5 percent in January, following a 1.2-percent decline in the preceding month. Prices for gray fabrics, finished fabrics, and paperboard also turned up, after decreasing a month earlier. The index for primary basic organic chemicals fell less than it did in December, and prices for basic inorganic chemicals rose more in January than they did in the prior month.

The intermediate foods and feeds index advanced 0.9 percent in January, after increasing 0.8 percent in the previous month. In January, rising prices for prepared animal feeds, fluid milk products, beef and veal, dry milk products, refined sugar and byproducts, and liquid beverage bases (used for soft drinks) outweighed falling prices for natural, processed, and imitation cheese; shortening and cooking oils; processed young chickens, and liquid milk products.

The rate of decrease in the intermediate energy goods index slowed from 2.2 percent in December to 1.3 percent in January. Prices for jet fuels fell 1.9 percent in January, compared with a 21.9-percent drop in the preceding month. The indexes for gasoline and liquefied petroleum gas also fell less in January than they did in December. Prices for diesel fuel and home heating oil turned up in January, while the industrial electric power index increased at a quicker pace than it did a month earlier. By contrast, industrial natural gas prices moved down 4.5 percent in January, after posting a 1.9-percent gain in the prior month. The commercial natural gas index declined, following no change in December, and prices for natural gas to electric utilities fell more than they did in the preceding month.

Crude goods

The Producer Price Index for Crude Materials for Further Processing declined 2.0 percent in January, following a 3.0-percent fall in December. Prices for crude energy materials decreased less in January than they did in December. By contrast, the index for basic industrial materials fell at a faster pace in January than it did in the prior month, and the crude foodstuffs and feedstuffs index posted a smaller increase in January than it did in December. (See table B.)

The crude energy materials index decreased 4.5 percent in January, after declining 7.3 percent in December. Natural gas prices dropped 12.3 percent in January, while coal prices inched up 0.2 percent. By contrast, crude petroleum prices climbed 10.4 percent in January. (See table 2.)

Prices for basic industrial materials decreased 2.5 percent in January, after falling 1.3 percent in December. In January, declining prices for iron and steel scrap, gold ores, leaf tobacco, aluminum base scrap, and copper ores outweighed rising prices for construction sand, gravel, and crushed stone; iron ore; raw cotton; and softwood logs, bolts, and timber.

The crude foodstuffs and feedstuffs index gained 1.9 percent in January, following a 2.6-percent advance in December. A 6.5-percent increase in prices for slaughter cattle led the increase in the crude foodstuffs and feedstuffs index in January. Rising prices for slaughter broilers and fryers, corn, wheat, and raw cane sugar and byproducts also were registered in January. By contrast, the indexes for fluid milk, slaughter hogs, fresh and dry vegetables, fresh fruits and melons, and soybeans declined in January.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries declined 3.6 percent in January, following a 5.8-percent drop in the prior month. (Net output price indexes are not seasonally adjusted.) Prices received by the natural gas liquid extraction industry fell 7.4 percent in January, compared with a 12.7-percent decline in December. The crude petroleum and natural gas extraction industry index also decreased less in January, while prices received by the industries for bituminous coal underground mining and for crushed and broken limestone mining and quarrying rose more than they did in the preceding month. Alternatively, the industry index for copper ore and nickel ore mining slipped 0.6 percent, compared with a 15.6-percent increase in December. Prices received by the industries for gold ore mining, bituminous coal and lignite surface mining, and for potash, soda, and borate mineral mining also turned down, after rising a month earlier. The index for the oil and gas well drilling industry increased less than it did in December. In January, the Producer Price Index for the Net Output of Total Mining Industries was 163.8 (December 1984=100), 13.3 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries increased 1.0 percent in January, following a 0.9- percent decrease in the previous month. Prices received by manufacturers of petroleum and coal products turned up 3.4 percent, after falling 13.0 percent in December. The industry group indexes for transportation equipment, beverages and tobacco, chemicals, machinery, fabricated metal products, nonmetallic mineral products, and primary metals rose more in January than they did in the preceding month. By contrast, prices received by food manufacturers increased 0.6 percent in January, following a 0.8- percent gain in December. The industry group indexes for wood product manufacturing and paper manufacturing also rose less than they did in the prior month. In January, the Producer Price Index for the Net Output of Total Manufacturing Industries was 146.2 (December 1984=100), 5.3 percent above its year-ago level.

Services. Among services industries in January, prices received by commercial bankers advanced 4.9 percent, after edging down 0.2 percent in the preceding month. The industry indexes for offices of lawyers, hotels (except casino hotels) and motels, investment banking and securities dealing, and saving institutions also turned up, following declines in December. Prices for direct health and medical insurance carriers, offices of real estate agents and brokers, and general medical and surgical hospitals rose more quickly than they did in the previous month. By contrast, the industry index for scheduled freight air transportation declined 3.2 percent in January, following a 3.4-percent increase a month earlier. Prices received by the industries for passenger car rental, radio stations, cable networks, and residential property managers also turned down, after moving up in December.

Recalculation of Seasonal Adjustment Factors

Effective with this release, seasonal adjustment factors have been recalculated to reflect price-movement patterns during 2004 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 2000 through December 2004. Revised seasonally adjusted data for this period, as well as seasonal factors for commodity indexes to be used through December 2005, were released February 16, 2005. 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 2004, based on former and recalculated seasonal factors. These percent changes include final price data through August 2004 and may differ from values shown in tables A and B of this release, which include final price data through September 2004.

Resampling of Industries

Effective with this release, the Producer Price Index (PPI) includes data for 58 resampled and 3 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 upcoming issue of the PPI Detailed Report for January 2005 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

113310 Logging 212113 Anthracite mining 212392 Phosphate rock 311119 Other animal food manufacturing 311211 Flour milling 311223 Other oilseed processing 311311 Sugarcane mills 311513 Cheese manufacturing 312221 Cigarettes 313210 Broadwoven fabric mills 315993 Men's and boys' neckwear manufacturing 316999 All other leather good manufacturing 322212 Folding paperboard boxes 322224 Uncoated paper and multiwall bag manufacturing 324121 Asphalt paving mixture and block manufacturing 324191 Petroleum lubricating oils and greases 325191 Gum and wood chemical manufacturing 325414 Biological products (except diagnostic) manufacturing 326191 Plastics plumbing fixture manufacturing 326220 Rubber and plastics hose and belting 326291 Rubber product manufacturing for mechanical use 327121 Brick and structural clay tile 327122 Ceramic wall and floor tile 327123 Structural clay products, not elsewhere classified 327124 Clay refractories 327125 Nonclay refractory manufacturing 327212 Other pressed and blown glass and glassware 327215 Glass products made of purchased glass 327410 Lime 327991 Cut stone and stone products 327992 Minerals and earths ground or otherwise treated 331111 Iron and steel mills 331210 Iron and steel pipe and tube manufacturing from purchased steel 331221 Rolled steel shape manufacturing 331222 Steel wire drawing 331315 Aluminum sheet, plate, and foil manufacturing 331316 Aluminum extruded products 332994 Small arms, 30 mm and under 333132 Oil and gas field machinery and equipment manufacturing

Resampling of Industries-Continued

333210 Sawmill and woodworking machinery manufacturing 333291 Paper industries machinery manufacturing 333292 Textile machinery 333991 Power-driven hand tool manufacturing 333994 Industrial process furnace and oven manufacturing 334111 Electronic computer manufacturing 334512 Automatic environmental control manufacturing 335110 Electric lamp bulb and part manufacturing 335122 Commercial electric lighting fixture manufacturing 335314 Relay and industrial control manufacturing 335932 Noncurrent-carrying wiring device manufacturing 336411 Aircraft manufacturing 336412 Aircraft engine and engine parts manufacturing 336611 Ship building and repairing 337122 Wood household furniture, except upholstered 337214 Nonwood office furniture 339995 Burial caskets 488320 Marine cargo handling 522110 Commercial banking* 522120 Savings institutions* 532412 Construction, mining, and forestry machinery and equipment rental and leasing* 541110 Offices of lawyers

* For further discussion of these newly introduced PPIs, see "New Producer Price Indexes for Commercial Banking-NAICS 522110-and Savings Institutions-NAICS 522120" and "New Producer Price Index for the Construction, Mining, and Forestry Machinery and Equipment Rental and Leasing Industry" in the forthcoming January 2005 issue of the PPI Detailed Report, or call the Section of Index Analysis and Public Information at (202) 691-7705.