February 2005 Producer Price Index

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The Producer Price Index for Finished Goods rose 0.4 percent in February, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.3-percent gain in January and a 0.3-percent decline in December. At the earlier stages of processing, the intermediate goods index advanced 0.7 percent, after moving up 0.4 percent in the previous month, and prices for crude goods fell 1.6 percent, following a 2.0-percent decrease in January. (See table A.)

2005 Jan. .3 -.2 -1.0 .8 4.2 .4 -2.0 Feb. .4 .8 1.4 .1 4.7 .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 October 2004 have been revised to reflect the availability of late reports and corrections by respondents.

Among finished goods in February, the indexes for energy goods, consumer foods, and consumer goods other than foods and energy rose 1.4, 0.8, and 0.2 percent, respectively. By contrast, capital equipment prices fell 0.2 percent. Excluding prices for foods and energy, the finished goods index edged up 0.1 percent in February, compared with a 0.8-percent increase in January.

Before seasonal adjustment, the Producer Price Index for Finished Goods advanced 0.5 percent in February to 152.2 (December 1982=100). From February 2004 to February 2005, prices for finished goods rose 4.7 percent. Over the same period, the index for finished energy goods increased 11.8 percent, prices for finished goods other than foods and energy moved up 2.8 percent, and the finished consumer foods index climbed 4.9 percent. For the 12 months ended February 2005, prices for intermediate goods increased 8.4 percent, and the crude goods index rose 8.1 percent.

Finished goods

The finished energy goods index rose 1.4 percent in February, after falling 1.0 percent in the preceding month. Leading this upturn, gasoline prices increased 5.2 percent, following a 4.2-percent decline in January. The liquefied petroleum gas index also turned up, after decreasing in the prior month, while prices for residential natural gas fell less in February than they did in the previous month. Alternatively, the residential electric power index moved down 0.3 percent in February, compared with a 1.2-percent gain a month earlier. Home heating oil prices rose less than they did in January. (See table 2.)

2005 Jan. .9 -1.3 .8 8.7 1.9 -4.5 -2.5 10.8 Feb. -.6 1.5 .5 8.4 -3.2 .2 -3.0 8.1 r=revised. Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for October 2004 have been revised to reflect the availability of late reports and corrections by respondents.

The index for finished consumer foods advanced 0.8 percent in February, following a 0.2-percent decline in the previous month. Prices for fresh and dry vegetables jumped 18.7 percent, after dropping 12.0 percent in January. The indexes for eggs for fresh use, finfish and shellfish, soft drinks, and processed young chickens also turned up in February, following decreases a month earlier. Prices for beef and veal and for bakery products rose more than they did in the preceding month. By contrast, the dairy products index fell 2.5 percent in February, after advancing 0.9 percent in the prior month. Prices for roasted coffee and processed turkeys also turned down, following gains in January, while the index for confectionery end products showed no change in February, after rising in the previous month. The indexes for pork and fresh fruits and melons posted greater declines in February that they did a month earlier.

The rate of increase in the index for finished consumer goods excluding foods and energy slowed from 0.9 percent in January to 0.2 percent in February. Prices for cigarettes moved up 0.6 percent in February, following a 3.4-percent gain in the preceding month. The indexes for alcoholic beverages, newspaper circulation, and household furniture also rose less in February than they did in January. Prices for light motor trucks; passenger cars; pharmaceutical preparations; women's, girls', and infants' apparel; and sporting and athletic goods turned down in February. Conversely, the index for cosmetics and other toilet preparations rose 1.1 percent, after falling 0.2 percent in January. Prices for pet food and floor coverings also increased, following decreases in January, while the household appliance index rose more than it did in the prior month.

Subsequent to a 0.6-percent gain in January, the index for capital equipment decreased 0.2 percent in February. The index for light motor trucks fell 2.8 percent, after posting a 0.9-percent rise in January. Prices for passenger cars and for communication and related equipment also turned down in February. The indexes for heavy motor trucks, civilian aircraft, construction machinery and equipment, and commercial furniture advanced less than they did in the prior month. By contrast, prices for electronic computers turned up 0.4 percent in February, following a 6.1- percent decrease in the preceding month. The indexes for office and store machines and equipment and for welding machines and equipment also went up, after declining a month earlier. Prices for pumps, compressors, and equipment increased at a faster pace than they did in January, and the metal forming machine tools index rose in February, following no change in the previous month.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 0.7 percent in February, after registering a 0.4- percent gain in the previous month. This faster rate of increase was due to prices for intermediate energy goods, which turned up after falling in January. By contrast, the indexes for durable manufacturing materials, nondurable manufacturing materials, and construction materials increased less in February than they did in the prior month. Intermediate foods and feeds prices turned down, after rising a month earlier. Excluding food and energy prices, the index for intermediate goods went up 0.5 percent, following a 0.8-percent gain in January. (See table B.)

Prices for intermediate energy goods advanced 1.5 percent in February, after declining 1.3 percent in January. Prices for jet fuel, gasoline, liquefied petroleum gas, and residual fuel turned up in February, following declines a month earlier. (Reporting errors were identified in the jet fuel index for November, December, and January, and will be corrected in accordance with normal revision procedures. The index level for February is believed to be correct, and should be comparable to figures prior to November.) The indexes for industrial natural gas, commercial natural gas, and natural gas to electric utilities decreased less in February than they did in January. Alternatively, prices for industrial electric power declined 1.5 percent in February, compared with a 1.9-percent gain in the prior month. The index for commercial electric power also turned down, after rising in January, while home heating oil prices increased less in February than they did in the preceding month. (See table 2.)

Prices for materials for durable manufacturing moved up 0.9 percent in February, compared with a 1.8-percent gain in the preceding month. In February, rising prices for primary nonferrous metals, cold rolled steel sheet and strip, building paper and board, prepared paint, and cement outweighed price declines for cold finished steel bars, aluminum mill shapes, hardwood lumber, and adhesives and sealants.

The index for materials for nondurable manufacturing rose 0.2 percent in February, after climbing 0.6 percent in the prior month. Prices for plastic resins and materials went up 0.3 percent in February, after posting a 2.3-percent advance in January. The indexes for inedible fats and oils and paperboard turned down, following increases in January. Prices for gray fabrics and synthetic rubber advanced less in February than they did in January. By contrast, the index for liquid refinery gases rose 7.4 percent, after falling 5.1 percent in the previous month. Prices for intermediate basic organic chemicals, paper, and paint materials also turned up in February, following declines a month earlier. The rate of increase in the index for alkalies and chlorine quickened from January to February.

Prices for intermediate foods and feeds fell 0.6 percent in February, after advancing 0.9 percent in the prior month. The index for fluid milk products declined 4.5 percent, following a 4.2-percent gain in January. Prices for prepared animal feeds, dry milk products, and refined sugar and byproducts also turned down, after rising in the previous month. The indexes for pork and for shortening and cooking oils fell more in February than they did a month earlier. Conversely, beef and veal prices advanced 3.0 percent in February, following a 1.8-percent rise in the preceding month. The index for confectionery materials also increased more than it did in January. The indexes for natural, processed, and imitation cheese and liquid milk products fell less than they did in January. Processed young chicken prices turned up in February.

Prices for materials and components for construction moved up 0.9 percent in February, following a 1.0-percent advance in the prior month. Price increases were registered in February for softwood lumber, concrete products, plastic construction products, air conditioning and refrigeration equipment, and asphalt felts and coatings. These increases were partially offset by declining prices for steel mill products, hardwood lumber, millwork, and paving mixtures and blocks.

Crude goods

The Producer Price Index for Crude Materials for Further Processing declined 1.6 percent in February, following a 2.0-percent fall in January. Prices for crude foodstuffs and feedstuffs turned down in February, while the index for crude materials other than food and energy fell more than it did in the prior month. By contrast, the crude energy materials index posted a gain in February, after declining in January. (See table B.)

The crude foodstuffs and feedstuffs index declined 3.2 percent in February, after advancing 1.9-percent in January. February prices for slaughter cattle fell 1.9 percent, following a 6.5-percent rise in January. Similarly, prices for slaughter broilers and fryers, corn, wheat, and raw cane sugar and byproducts decreased, following increases in the previous month. The indexes for rough rice and slaughter hogs fell more in February than they did in January. Conversely, prices for fresh vegetables, except potatoes, jumped 25.3 percent in February, after decreasing 15.1 percent in the prior month. The unprocessed finfish index also increased, compared with a decline in January. (See table 2.)

Prices for basic industrial materials dropped 3.0 percent in February, after falling 2.5 percent in January. The copper ore index decreased 9.9 percent in February, following a 0.6-percent decrease in the prior month. The indexes for iron ore; softwood logs, bolts, and timber; and raw cotton declined, after registering gains in January. Prices for wastepaper remained unchanged, following increases in January. Iron and steel scrap prices declined more than they did in the preceding month. By contrast, the copper base scrap index moved up 4.8 percent in February, after declining 0.2 percent in January. Prices for gold ores, leaf tobacco, and aluminum base scrap fell less than they did in the previous month.

The crude energy materials index rose 0.2 percent in February, subsequent to a 4.5-percent decline in January. In February, the crude petroleum and coal indexes gained 3.3 and 1.4 percent, respectively. Conversely, the natural gas index fell 1.9 percent.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries advanced 1.3 percent in February, following a 3.6-percent decline in January. (Net output price indexes are not seasonally adjusted.) Leading this upturn, prices received by the crude petroleum and natural gas extraction industry rose 1.5 percent, compared with a 4.7- percent decrease in the prior month. The industry indexes for potash, soda, and borate minerals mining and bituminous coal and lignite surface mining also went up in February, after falling a month earlier. Prices received by the industries for natural gas liquid extraction and gold ore mining declined less than they did in January, while the industry indexes for oil and gas well drilling and for oil and gas operations support activities increased more in February than they did in the previous month. By contrast, prices received by the copper and nickel ore mining industry fell 9.7 percent, following a 0.6-percent decline in January. The index for the iron ore mining industry edged down, after moving up in the preceding month, while prices received by the crushed and broken granite mining and quarrying industry rose less in February than they did a month earlier. In February, the Producer Price Index for Total Mining Industries was 165.9 (December 1984=100), 18.2 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries advanced 0.7 percent in February, following a 1.0- percent gain in January. Prices received by the chemical manufacturing industry group increased 0.5 percent, compared with a 1.6-percent rise in the prior month. The industry group indexes for beverages and tobacco, machinery, primary metals, electrical equipment and appliances, nonmetallic mineral products, and foods manufacturing also rose less in February than they did in the prior month. Prices received by transportation equipment manufacturers, as well as producers of medical equipment and supplies, moved down, after advancing in January. Alternatively, the industry group index for petroleum and coal products manufacturing jumped 6.5 percent in February, following a 3.4-percent increase a month earlier. Prices received by producers of wood products also rose more than they did in the previous month. In February, the Producer Price Index for Total Manufacturing Industries was 147.2 (December 1984=100), 5.7 percent above its year-ago level.

Services. Among services industries in February, prices received by commercial bankers fell 3.3 percent, after rising 4.9 percent in January. The industry indexes for lawyers, savings institutions, cellular and other wireless carriers, and courier services also turned down, following increases in the preceding month. Prices received by real estate agents and brokers were unchanged, after advancing in January. The industry indexes for direct health and medical insurance carriers, scheduled passenger air transportation, portfolio managers, and hotels (except casino hotels) and motels went up less in February than they did a month earlier. By contrast, prices received by the investment banking and securities dealing industry climbed 6.5 percent, following a 2.9-percent gain in January. The industry indexes for passenger car rental and radio stations turned up in February, after decreasing in the prior month, while prices received by the scheduled freight air transportation industry declined less than they did in January.