July 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 1.0 percent in July, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed no change in June and a 0.6-percent decline in May. At the earlier stages of processing, prices received by manufacturers of intermediate goods increased 1.0 percent, compared with a 0.1-percent gain in June, while the crude goods index turned up 6.7 percent, after falling 3.3 percent in the prior month. (See table A.)

The July increase in finished goods prices was led by the index for finished energy goods, which climbed 4.4 percent following a 2.0-percent rise in June. Prices for finished goods other than foods and energy moved up 0.4 percent in July, after decreasing 0.1 percent a month earlier. The index for finished consumer foods fell 0.3 percent in July, following a 1.1- percent drop in the previous month.

Before seasonal adjustment, the Producer Price Index for Finished Goods rose 0.9 percent in July to 155.4 (1982=100). From July 2004 to July 2005, the finished goods index increased 4.6 percent. Over the same period, prices for finished energy goods advanced 15.2 percent, the index for finished goods other than foods and energy increased 2.8 percent, and prices for finished consumer foods rose 1.4 percent. The index for intermediate goods climbed 6.5 percent, and prices received by crude goods producers rose 8.4 percent for the 12-month period ended July 2005.

Finished goods

The finished energy goods index increased 4.4 percent in July, compared with a 2.0-percent gain in June. Leading this acceleration, residential natural gas prices advanced 3.7 percent, following a 3.2- percent decrease in the previous month. The index for residential electric power also turned up, after declining in June. Prices for gasoline and liquefied petroleum gas rose more than they had in the prior month. Conversely, the index for home heating oil increased 5.1 percent in July, following a 13.5-percent advance a month earlier. Diesel fuel prices also rose less than they had in the prior month. (See table 2.)

The index for capital equipment advanced 0.5 percent, subsequent to a 0.2-percent decline in June. Light motor truck prices rose 1.4 percent in July, after falling 1.7 percent in the previous month. The indexes for passenger cars, civilian aircraft, and construction machinery and equipment also turned up, following decreases in June. Commercial furniture prices increased, after showing no change in the preceding month. Alternatively, the index for railroad equipment fell 0.6 percent in July, following a 2.0- percent gain a month earlier. Prices for metal cutting machine tools, agricultural machinery and equipment, and welding machines and equipment also turned down, after rising in June. The electronic computers index decreased more than it had in the prior month.

Prices for finished consumer goods other than foods and energy advanced 0.4 percent in July, after edging down 0.1 percent in June. The index for passenger cars rose 1.5 percent, following a 1.0-percent decline in the prior month. Prices for light motor trucks and periodical circulation also turned up in July, after falling a month earlier. The index for pharmaceutical preparations rose more quickly than it had in June, and household furniture prices increased, following no change in the previous month. By contrast, the index for cosmetics and other toilet preparations declined 0.4 percent in July, after increasing at the same rate in June. Prices for newspaper circulation and household appliances also turned down, following increases in the prior month. The book publishing index rose less than it had in June.

The rate of decrease in the finished consumer foods index slowed from 1.1 percent in June to 0.3 percent in July. Beef and veal prices declined 1.9 percent, after dropping 8.0 percent in the previous month. The indexes for dairy products, eggs for fresh use, finfish and shellfish, and processed young chickens turned up in July, after decreasing a month earlier. Pork prices fell less than they had in June. Alternatively, the index for fresh and dry vegetables dropped 16.1 percent, after rising 7.4 percent in June. Prices for soft drinks and for processed fruits and vegetables also turned down in July, following increases in the prior month. The index for confectionery end products remained unchanged, after moving up a month earlier.

Intermediate goods

The index for Intermediate Materials, Supplies, and Components advanced 1.0 percent in July, after inching up 0.1 percent in June. Accounting for most of this acceleration, prices for intermediate energy goods advanced at faster rates than in June. The indexes for materials for nondurable manufacturing and for intermediate foods and feeds turned up in July. By contrast, prices for materials and components for construction turned down after increasing in June, and the index for materials for durable manufacturing fell at a faster pace in July than it had in the preceding month. The index for intermediate goods other than foods and energy edged down 0.1 percent, after declining 0.2 percent in June. (See table B.)

Prices for intermediate energy goods climbed 5.2 percent in July, after rising 1.9 percent in the prior month. Industrial natural gas prices rose 7.4 percent, following a 5.1-percent decline in June. The indexes for commercial natural gas, natural gas to electric utilities, commercial electric power, and residual fuel also turned up in July. Gasoline and jet fuel prices increased at faster rates than they had in June. By contrast, the diesel fuel index edged up 0.2 percent in July, after gaining 12.7 percent in June. Price increases also moderated in July for home heating oil, industrial electric power, and kerosene. (See table 2.)

The materials for nondurable manufacturing index inched up 0.1 percent in July, following a 0.4-percent decline in the preceding month. Prices for intermediate basic organic chemicals increased 0.4 percent, after decreasing 11.8 percent in June. The indexes for inedible fats and oils, paint materials, and gray fabrics also turned up in July. Prices for paperboard and for plastic resins and materials decreased less than they had a month earlier, while prices for basic inorganic chemicals increased more than in June. By contrast, the index for primary basic organic chemicals fell 2.3 percent in July, after showing no change in June. Prices for paper and nitrogenates rose less than they had a month earlier. The indexes for synthetic rubber and synthetic fibers turned down in July.

The intermediate foods and feeds index moved up 0.9 percent in July, following a 0.8-percent decline in the previous month. Prices for dairy products rose 2.9 percent, following a 1.0-percent decrease in June. The index for processed young chickens also turned up in July, after falling in the prior month. Prices for beef and veal and for pork fell at slower rates in July than they had in June. By contrast, the index for refined sugar and byproducts decreased 0.6 percent in July, following a 2.1-percent rise in the preceding month. Similarly, the indexes for flour, for confectionary materials, and for shortening and cooking oils turned down in July.

Prices for materials and components for construction decreased 0.2 percent in July, after increasing 0.3 percent in June. The index for softwood lumber fell 3.2 percent, after advancing 3.9 percent in the prior month. Prices for plywood, building paper and board, treated wood, fabricated structural metal products, and wiring devices also turned down in July. The indexes for steel mill products and mineral wool for structural insulation fell more than they had in the preceding month. Conversely, prices for concrete products moved up 1.9 percent in July, after inching down 0.1 percent in June. The indexes for millwork, plumbing fixtures and brass fittings, paving mixtures and blocks, and fabricated ferrous wire products also turned up, after declining in the preceding month. Prices for plastic construction products decreased less than they had in the prior month, while the indexes for cement and for nonferrous wire and cable increased more than they had in June.

Prices for materials for durable manufacturing decreased 0.9 percent in July, following a 0.5-percent decline in the prior month. The building paper and board index moved down 8.0 percent, after rising 7.3 percent in June. Prices for cold rolled steel sheet and strip, plywood, semifinished steel mill products, and unprocessed filament yarns also turned down in July. The indexes for hot rolled steel bars, plates, and structural shapes and for cold finished steel bars decreased more than they had in the previous month. Conversely, prices for aluminum mill shapes fell 0.5 percent, after declining 1.6 percent in June. The index for hot rolled steel sheet and strip also fell at a slower rate in July than it had a month earlier. Prices for metal powders, pastes, and flakes turned up after falling in the previous month, and the index for cement increased more than it had in June.

Crude goods

The Producer Price Index for Crude Materials for Further Processing advanced 6.7 percent in July, after declining 3.3 percent in June. Prices for crude energy materials and basic industrial materials turned up in July, following decreases in the preceding month, while the index for crude foodstuffs and feedstuffs showed no change, after falling in June. (See table B.)

Prices for crude energy materials climbed 12.8 percent in July, following a 3.1-percent decline in June. Leading this upturn, the natural gas index surged 14.9 percent, following an 8.9-percent drop in the previous month. The crude petroleum index increased at a faster rate in July than in June, 13.1 percent compared with 5.5 percent. The coal index moved up 0.3 percent, after falling 1.1 percent a month earlier. (See table 2.)

The index for crude nonfood materials less energy advanced 3.1 percent in July, following a 4.3-percent decline in June. Most of this reversal was attributable to prices for iron and steel scrap, which increased 2.7 percent in July following a 19.9-percent drop in the prior month. The indexes for aluminum base scrap, raw cotton, and softwood logs, bolts, and timber also moved up, after decreasing in June. Prices for nonferrous metal ores and copper base scrap rose more in July than they had in the preceding month, while the wastepaper index fell less than it had in June. By contrast, the index for hides and skins moved down 0.2 percent in July, following a 3.4-percent advance in the previous month. Pulpwood prices also turned down, after increasing a month earlier. The indexes for both construction sand, gravel, and crushed stone and for hardwood logs, bolts, and timber went up less in July than in June.

Prices for crude foodstuffs and feedstuffs were unchanged in July, following a 3.1-percent decline in June. The slaughter hogs index rose 3.3 percent in July, after falling 13.0 percent in the prior month. Prices for fluid milk and unprocessed finfish also turned up, following decreases in June. The slaughter cattle index declined less in July than it had a month earlier, while prices for corn and slaughter turkeys increased more than in June. Alternatively, the index for fresh vegetables (except potatoes) dropped 20.6 percent in July, compared with a 12.1-percent jump in the preceding month. Prices for slaughter broilers and fryers also moved down, after advancing in June. The soybean index rose at a slower rate in July than a month earlier.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries increased 10.4 percent in July, after declining 1.8 percent in the preceding month. (Net output price indexes are not seasonally adjusted.) Accounting for the majority of this upturn, prices received by the crude petroleum and natural gas industry rose 13.3 percent, following a 2.4-percent decrease in June. The industry indexes for natural gas liquid extraction and phosphate rock mining also turned up in July, after falling in the prior month. Prices paid to the industries for copper ore and nickel ore mining, oil and gas well drilling, and bituminous coal underground mining advanced at quicker rates than they had in the previous month. By contrast, prices received by the industry for oil and gas operations support activities moved down 0.4 percent, compared with a 4.0- percent rise a month earlier. The industry indexes for support activities for coal mining and for crushed and broken granite mining and quarrying also turned down in July, while prices received by the crushed and broken limestone quarrying and mining industry increased less than they had in June. In July, the Producer Price Index for Total Mining Industries was 194.1 (December 1984=100), 24.7 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries climbed 0.9 percent in July, after edging up 0.1 percent in the prior month. Leading this acceleration, prices received by the petroleum and coal products manufacturing industry group advanced 8.4 percent, following a 3.2-percent gain in June. The industry group indexes for nonmetallic mineral products and for furniture and related products also rose more than they had in the preceding month. Prices received by the industries for transportation equipment and food manufacturing turned up in July, and the industry group index for chemical manufacturing fell less than it had in June. Alternatively, prices received by the wood products manufacturing industry group turned down 1.1 percent, following a 1.8-percent increase in the previous month. The industry group index for beverage and tobacco product manufacturing also decreased in July, after rising a month earlier. Prices received by the industries for printing and related support activities and for fabricated metal products advanced at slower rates than they had in June, while the industry group index for paper manufacturing declined in July, after showing no change in the preceding month. In July, the Producer Price Index for Total Manufacturing Industries was 150.8 (December 1984=100), 5.3 percent above its year-ago level.

Services. Among services industries in July, prices received by commercial bankers fell 1.0 percent, after rising 5.2 percent in the previous month. The industry indexes for offices of lawyers, television broadcasting, investment banking and securities dealing, and nonresidential property managers also turned down, following increases in June. Prices received by the industries for scheduled passenger air transportation and for hotels and motels (excluding casinos) rose less than they had in the prior month. By contrast, the industry index for savings institutions turned up 4.4 percent, after falling 1.3 percent in June. Prices received by casino hotels also rose, after declining in the prior month. The industry indexes for general medical and surgical hospitals and for newspaper publishers advanced at faster rates than they had in June. The industry index for cellular and other wireless carriers decreased less in July than it had in the previous month, and prices received by wired telecommunications carriers and direct life insurance carriers increased, after remaining unchanged in June.

Resampling of Industries

Effective with this release, the Producer Price Index (PPI) includes data for 47 resampled and 8 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 July 2005 issue of the PPI Detailed Report 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

212210 Iron ore mining 212311 Dimension stone mining and quarrying 212312 Crushed and broken limestone mining and quarrying 212313 Crushed and broken granite mining and quarrying 236221 New warehouse building construction* 311111 Dog and cat food 311411 Frozen fruit, juice, and vegetable manufacturing 311412 Frozen specialty food manufacturing 311511 Fluid milk manufacturing 311821 Cookie and cracker manufacturing 312210 Tobacco stemming and redrying 314110 Carpet and rug mills 314121 Curtain and drapery mills 314129 Other household textile product mills 315191 Outerwear knitting mills 315232 Women's and girls' blouse and shirt manufacturing 322213 Setup paperboard boxes 322233 Stationery, tablet, and related product manufacturing 323117 Book printing 323121 Tradebinding and related work 325181 Alkalies and chlorine 325211 Plastics material and resins manufacturing 325222 Manufactured noncellulosic fibers 325510 Paint and coating manufacturing 325910 Printing ink manufacturing 325920 Explosives manufacturing 327310 Cement manufacturing 331419 Primary nonferrous metal, excluding copper and aluminum 332611 Spring (heavy gauge) manufacturing 332991 Ball and roller bearings 332993 Ammunition (except small arms) manufacturing 332998 Enameled iron and metal sanitary ware manufacturing 333294 Food products machinery manufacturing 333613 Mechanical power transmission equipment manufacturing 333912 Air and gas compressor manufacturing 333913 Measuring and dispensing pumps manufacturing 333921 Elevator and moving stairway manufacturing 334411 Electron tube manufacturing 334413 Semiconductor and related device manufacturing

Resampling of Industries-Continued

334513 Industrial process control manufacturing 335313 Switchgear and switchboard apparatus manufacturing 336212 Truck trailer manufacturing 336311 Carburetor, piston, piston ring, and valve manufacturing 337110 Wood kitchen cabinet and countertop manufacturing 337121 Upholstered household furniture manufacturing 339112 Surgical and medical instrument manufacturing 339941 Pen and mechanical pencil manufacturing 423000 Merchant wholesalers, durable goods* 424000 Merchant wholesalers, nondurable goods* 425120 Wholesale trade agents and brokers* 482111 Line-haul railroads 518111 Internet service providers* 518112 Web search portals* 561612 Security guards and patrol services* 713940 Fitness and recreational sports centers*

* For further discussion of these newly introduced PPIs, see the July 2005 issue of the PPI Detailed Report, or call the Section of Index Analysis and Public Information at (202) 691-7705.