June 2005 Producer Price Index

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The Producer Price Index for Finished Goods showed no change in June, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This index had fallen 0.6 percent in May and risen 0.6 percent in April. At the earlier stages of processing, prices received by manufacturers of intermediate goods advanced 0.1 percent in June, following a 0.7-percent decline in the preceding month, while the crude goods index decreased 3.3 percent, after moving down 2.0 percent in May. (See table A.)

Among finished goods, the index for energy goods increased 2.0 percent in June, following a 3.5-percent drop in the previous month. By contrast, prices for finished consumer foods fell 1.1 percent, compared with a 0.3-percent decline in May, and the index for finished goods other than foods and energy decreased 0.1 percent in June, following a 0.1- percent rise a month earlier.

During the first 6 months of 2005, prices for finished goods advanced at a seasonally adjusted annual rate (SAAR) of 2.4 percent, after moving up at a 4.8-percent SAAR during the latter half of 2004. Within the finished goods category, the index for finished energy goods increased at an 8.5- percent SAAR from December 2004 to June 2005 after rising at an 18.0- percent SAAR from June 2004 to December 2004, and prices for finished consumer foods went down at a 1.3-percent SAAR during the first half of 2005 after advancing at a 1.6-percent SAAR during the second half of 2004. The index for finished goods other than foods and energy climbed at a 2.2 percent SAAR in June 2005, the same rate of increase as in the prior 6- month period. At the earlier stages of processing, prices for intermediate goods increased at a 4.2-percent SAAR from December 2004 to June 2005, after rising at an 8.0-percent SAAR from June 2004 to December 2004. The crude goods index declined at a 3.4-percent SAAR during the first 6 months of 2005, after moving up at a 7.2-percent SAAR during the last 6 months of 2004. (See summary table below.)

Crude materials for further processing 24.7 19.5 17.4 -3.4 39.6 4.1 -10.4 Foodstuffs and feedstuffs 4.5 24.1 -2.6 -6.0 7.4 14.6 -23.0 Crude energy materials 61.5 14.4 35.9 7.9 79.0 8.1 7.7 Crude nonfood materials less energy 12.6 21.6 20.5 -21.8 26.6 -17.9 -25.4 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.

Before seasonal adjustment, the Producer Price Index for Finished Goods declined 0.1 percent in June to 154.0 (1982=100). From June 2004 to June 2005, prices for finished goods advanced 3.6 percent. Over the same period, the index for finished energy goods jumped 13.2 percent, prices for finished goods other than foods and energy rose 2.2 percent, and the index for finished consumer foods inched up 0.1 percent. For the 12 months ended June 2005, prices for intermediate goods increased 6.2 percent and the crude goods index moved up 1.7 percent.

Finished goods

The index for finished energy goods climbed 2.0 percent in June, following a 3.5-percent decrease in May. Over two-thirds of this upturn can be traced to gasoline prices, which went up 8.7 percent in June compared with a 9.9-percent drop a month earlier. The indexes for home heating oil, liquefied petroleum gas, diesel fuel, and kerosene also advanced, after falling in May. Alternatively, prices for residential natural gas declined 3.2 percent in June, following a 0.9-percent decrease in the preceding month. The index for residential electric power also fell at a faster rate than it did in the previous month. (See table 2.)

The index for finished consumer foods declined 1.1 percent in June, compared with a 0.3-percent decrease in May. Prices for beef and veal dropped 8.0 percent in June, after rising 1.9 percent a month earlier. The indexes for fresh fruits and melons, eggs for fresh use, and for finfish and shellfish also moved down, following increases in May. Pork prices decreased in June, after remaining unchanged in the prior month. The index for processed turkeys fell at a faster rate than it did in May. By contrast, prices for fresh and dry vegetables advanced 7.4 percent in June, subsequent to a 15.0-percent decline in the preceding month. The dairy products index decreased less in June than it did in the previous month, while prices for roasted coffee and for processed fruits and vegetables rose more than they did in May.

The capital equipment index fell 0.2 percent in June, after inching up 0.1 percent in May. Prices for construction machinery and equipment moved down 0.4 percent in June, following a 2.2-percent jump a month earlier. The indexes for civilian aircraft and industrial material handling equipment also turned down, after rising in May. Prices for light motor trucks and passenger cars declined more in June than they did in the previous month, while the index for heavy motor trucks increased at a slower pace than it did in May. Conversely, prices for electronic computers decreased 0.8 percent in June, compared with a 4.8-percent drop in the preceding month. The indexes for railroad equipment and metal cutting machine tools advanced more than they did in May. From December 2004 to June 2005, capital equipment prices moved up at a 1.5-percent SAAR, after climbing at a 2.6-percent SAAR from June 2004 to December 2004.

The index for finished consumer goods other than foods and energy edged down 0.1 percent in June, following a 0.1-percent increase in May. Passenger car prices declined 1.0 percent in June after decreasing 0.2 percent a month earlier, while the index for light motor trucks fell 1.7 percent after moving down 0.9 percent in May. Prices for cigarettes and household furniture were unchanged in June, following advances in the preceding month. The indexes for periodical circulation and textile housefurnishings turned down, after rising in May. Prices for mobile homes and pharmaceutical preparations increased less in June than they did in the prior month. By contrast, newspaper circulation prices, which were unchanged in May, went up 1.7 percent in June. The book publishing index also rose after showing no change in the previous month, while tire prices advanced at a quicker pace than they did in May. During the first half of 2005, the index for finished consumer goods other than foods and energy climbed at a 2.6-percent SAAR, after moving up at a 2.1-percent SAAR during the second half of 2004.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components edged up 0.1 percent in June, following a 0.7-percent decline in the prior month. Prices for intermediate energy goods rose, after decreasing in May, accounting for most of this upturn. Prices for materials and components for construction also turned up in June, while the index for materials for durable manufacturing fell less than it did in the preceding month. By contrast, the indexes for materials for nondurable manufacturing and for intermediate foods and feeds decreased, following increases in the previous month. Prices for intermediate goods other than foods and energy moved down 0.2 percent in June, compared with a 0.3- percent decline in May. (See table B.)

The intermediate energy goods index turned up 1.9 percent in June, after falling 2.6 percent in the preceding month. Gasoline prices jumped 8.7 percent, following a 9.9-percent drop in May. The indexes for jet fuels, diesel fuel, home heating oil, and liquefied petroleum gas also went up, after falling a month earlier. Prices for industrial electric power rose at a quicker pace than they did in May. Alternatively, the industrial natural gas index declined 5.1 percent in June, following a 1.5-percent decrease in the prior month. Prices for commercial natural gas also fell more than they did in May, and the index for commercial electric power turned down in June. Prices for intermediate energy goods advanced at an 11.9-percent SAAR during the first half of 2005, after rising at an 18.3- percent SAAR in the second half of 2004. (See table 2.)

The index for materials for durable manufacturing declined 0.5 percent in June, after falling 1.4 percent in May. Hot rolled steel sheet and strip prices fell 7.6 percent in June, after posting an 8.4-percent decline a month earlier. The indexes for building paper and board and for plywood turned up in June, while prices for copper cathode and refined copper, copper and brass mill shapes, and cement increased more than they did in May. By contrast, the aluminum mill shapes index turned down 1.6 percent in June, compared with a 0.3-percent advance in the preceding month. Prices for hot rolled steel bars plates and structural shapes; cold finished steel bars; and prepared paint also decreased, following gains in May. From December 2004 to June 2005, the index for materials for durable manufacturing fell at a 0.1-percent SAAR, after moving up at a 14.4-percent SAAR in the previous 6-month period.

Subsequent to a 0.2-percent decline in May, prices for materials and components for construction climbed 0.3 percent in June. Accounting for more than half of this upturn, the index for softwood lumber increased 3.9 percent, after falling 5.7 percent in the previous month. Prices for plywood, building paper and board, nonferrous wire and cable, and wiring devices also rose in June, following decreases in the prior month. The treated wood index went up more than it did in May. By contrast, prices for plastic construction products declined 0.7 percent in June, after increasing 0.6 percent in the preceding month. The indexes for paving mixtures and blocks, concrete products, and hardwood lumber also turned down in June, while prices for steel mill products fell more than they did in May. During the first half of 2005, the index for materials and components for construction advanced at a 4.5-percent SAAR, after increasing at a 5.7-percent SAAR in the second half of 2004.

Prices for materials for nondurable manufacturing turned down 0.4 percent in June, after inching up 0.1 percent a month earlier. Much of this downturn can be attributed to the index for plastic resins and materials, which fell 2.8 percent following a 0.4-percent rise in May. Prices for inedible fats and oils, finished fabrics, and paint materials also declined in June, after moving up in the prior month. The paperboard index decreased, following no change in May. Prices for intermediate basic organic chemicals fell more in June than they did in the previous month, and the index for basic inorganic chemicals rose less than in May. Alternatively, prices for primary basic organic chemicals showed no change in June, following a 3.1-percent drop in the preceding month. The indexes for paper, medicinal and botanical chemicals, and synthetic rubber increased more than they did in the preceding month. From December 2004 to June 2005, prices for materials for nondurable manufacturing climbed at a 3.9-percent SAAR, after rising at a 15.5-percent SAAR from June to December 2004.

The intermediate foods and feeds index declined 0.8 percent in June, following a 0.4-percent rise in the prior month. Leading this downturn, beef and veal prices dropped 8.0 percent, after moving up 1.9 percent in May. The index for fluid milk products also turned down in June. Prices for pork fell, following no change in May, while the flour index rose less than it did in the previous month. Conversely, the index for prepared animal feeds increased 2.0 percent in June, after rising 0.7 percent a month earlier. The natural, processed, and imitation cheese index fell less than it did in the preceding month, while prices for refined sugar and byproducts, shortening and cooking oils, and confectionary materials turned up in June. The index for intermediate foods and feeds advanced at a 2.9- percent SAAR in the first half of 2005, after falling at a 16.6-percent SAAR in the prior 6-month period.

Crude Goods

The Producer Price Index for Crude Materials for Further Processing declined 3.3 percent in June, following a 2.0-percent fall in May. Prices for crude foodstuffs and feedstuffs, crude energy materials, and basic industrial materials fell more in June than they did in May. (See table B.)

The crude foodstuffs and feedstuffs index declined 3.1 percent in June, after decreasing 1.0 percent in May. In June, prices for slaughter cattle fell 5.9 percent, following a 1.2-percent decline in May. Similarly, prices for slaughter hogs also fell at a faster pace, compared to May. The fresh fruits and melons, wheat, and unprocessed finfish indexes turned down in June after rising a month earlier. Conversely, prices for fresh vegetables (except potatoes) moved up 12.1 percent in June, following an 18.0-percent drop in the prior month. Prices for slaughter broilers and fryers and for corn also increased, after declining in the previous month. The index for crude foodstuffs and feedstuffs decreased at a 6.0-percent SAAR from December 2004 to June 2005, after declining at a 15.9-percent SAAR during the previous 6-month period. (See table 2.)

The crude energy materials index declined 3.1 percent in June, subsequent to a 1.9-percent decline in May. The natural gas index fell 8.9 percent in June, after decreasing 3.6 percent in the prior month. Prices for coal turned down 1.1 percent, after increasing 0.3 percent a month earlier. By contrast, prices for crude petroleum gained 5.5 percent, following a 0.5-percent rise in May. The index for crude energy materials moved up at a 7.9-percent SAAR from December 2004 to June 2005, after advancing at a 14.6-percent SAAR during the second half of 2004.

Prices for basic industrial materials declined 4.3 percent in June, after falling 3.6 percent in May. The iron and steel scrap index fell 19.9 percent in June, following a 12.3-percent drop in the preceding month. Prices for aluminum base scrap and for softwood logs, bolts, and timber also fell at a faster rate in June, compared to May. Prices for wastepaper declined, after remaining unchanged a month earlier, and the raw cotton index turned down after a May increase. Conversely, the copper ore index increased 6.1 percent in June, after declining 7.7 percent in May. Similarly, prices for copper base scrap and for hides and skins turned up in June, following decreases in May. During the first half of 2005, the index for crude nonfood materials less energy declined at a 21.8-percent SAAR, after advancing at a 41.6-percent SAAR for the second half 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 declined 1.8 percent in June, following a 2.1-percent drop in May. (Net output price indexes are not seasonally adjusted.) Prices fell in June for the industries for natural gas liquid extraction, crude petroleum and natural gas extraction, phosphate rock mining, bituminous coal and lignite surface mining, and gold ore mining. These decreases outweighed rising prices received by the industries for oil and gas operations support activities, copper ore and nickel ore mining, oil and gas well drilling, bituminous coal underground mining, and for crushed and broken limestone mining and quarrying. During the first half of 2005, the Producer Price Index for the Net Output of Total Mining Industries advanced at an annual rate of 8.0 percent, compared with an 18.4-percent rate of increase in the second half of 2004. In June 2005, this index was 175.8 (December 1984=100), 13.1 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries edged up 0.1 percent in June, following a 0.3- percent drop a month earlier. This upturn was primarily due to prices received by the petroleum and coal products manufacturing industry group, which increased 3.2 percent after falling a similar amount in the prior month. The industry group indexes for wood products manufacturing, computer and electronic products, and for printing and related support activities also turned up, compared with declines in May. Prices paid to manufacturers of fabricated metal products, nonmetallic mineral products, and beverage and tobacco products advanced more in June than they did a month earlier. Alternatively, prices received by food manufacturers fell 0.9 percent, after rising 0.4 percent in the previous month. The industry group indexes for transportation equipment and chemical manufacturing declined at faster rates in June than they did in the preceding month. Prices for the machinery manufacturing industry group remained unchanged, after increasing in May. From December 2004 to June 2005, the Producer Price Index for the Net Output of Total Manufacturing Industries rose at an annual rate of 6.2 percent, following a 3.0-percent rate of increase from June 2004 to December 2004. In June 2005, this index was 149.4 (December 1984=100), 4.5 percent above its year-ago level.

Services. Among services industries in June, prices received by commercial bankers advanced 5.2 percent, after decreasing 3.0 percent in May. The industry indexes for scheduled passenger air transportation and securities brokerages also turned up, following declines in the prior month. Prices received by hotels and motels (excluding casinos) and offices of lawyers increased more in June than they did a month earlier. The index for savings institutions fell less than it did in May. By contrast, rising prices for investment banking and securities dealing slowed, advancing 0.3 percent compared with a 2.7-percent rise in May. The indexes for line-haul railroads and for direct health and medical insurance carriers also increased less in June than they did in the previous month. Prices received by offices of certified public accountants and casino hotels turned down, after increasing in May, while the index for cellular and other wireless carriers fell more during the same period.