September 2005 Producer Price Index

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The Producer Price Index for Finished Goods rose 1.9 percent in September, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This advance followed increases of 0.6 percent in August and 1.0 percent in July. At the earlier stages of processing, prices received by manufacturers of intermediate goods climbed 2.5 percent in September, after moving up 0.7 percent in the preceding month, while the crude goods index rose 10.2 percent, following a 2.3- percent gain in August. (See table A.)

Hurricanes Katrina and Rita Hurricanes Katrina and Rita had virtually no impact on data collection efforts or survey response rates, and no changes in estimation procedures were necessary.

Among finished goods in September, prices for energy goods advanced 7.1 percent, compared with a 3.7-percent increase in August. The finished consumer foods index turned up 1.4 percent, following a 0.3-percent decline in the prior month. Prices for finished goods other than foods and energy rose 0.3 percent in September, following no change in August.

During the third quarter of 2005, prices for finished goods advanced at a seasonally adjusted annual rate (SAAR) of 14.8 percent, after falling at a 0.5-percent SAAR during the second quarter of 2005. Excluding prices for foods and energy, the finished goods index increased at a 2.6-percent SAAR for the 3 months ended September 2005, after rising at a 1.0-percent SAAR for the 3 months ended June 2005. Among prices for raw and partially processed goods, the SAAR for intermediate goods accelerated from 0.8 percent to 18.1 percent from the second to the third quarter of 2005. The crude goods index moved up at a 109.7-percent SAAR during the third quarter, after declining at a 12.5-percent SAAR during the previous quarter. (See summary below.)

Before seasonal adjustment, the Producer Price Index for Finished Goods advanced 1.8 percent in September to 158.9 (1982=100). From September 2004 to September 2005, prices for finished goods rose 6.9 percent. Over the same period, the index for finished energy goods increased 27.8 percent, prices for finished goods other than foods and energy went up 2.6 percent, and the finished consumer foods index climbed 2.1 percent. For the 12 months ended September 2005, intermediate goods prices advanced 8.4 percent, and the crude goods index increased 28.5 percent.

Crude materials for further 24.7 19.5 17.4 25.1 6.6 -12.5 109.7 processing Foodstuffs and feedstuffs 4.5 24.1 -2.6 -4.0 15.0 23.2 .3 Crude energy materials 61.5 14.4 35.9 59.8 15.3 1.0 250.3 Crude nonfood materials less energy 12.6 21.6 20.5 .6 -20.7 -22.8 66.3 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.

Finished goods

The index for finished energy goods moved up 7.1 percent in September, following a 3.7-percent advance in August. Leading this acceleration, prices for residential natural gas rose 9.0 percent, subsequent to a 2.5- percent gain in the previous month. The indexes for gasoline, liquefied petroleum gas, finished lubricants, and kerosene also climbed at faster rates than they had in August. Home heating oil prices turned up, after falling a month earlier. By contrast, the index for residential electric power was unchanged in September, following a 0.2-percent increase in the prior month. Prices for diesel fuel rose less than in the previous month. (See table 2.) During the third quarter of 2005, prices for finished energy goods rose at an 80.7-percent SAAR, after inching up at a 0.3- percent SAAR during the second quarter.

The index for finished consumer foods advanced 1.4 percent in September, following a 0.3-percent decline in August. Prices for eggs for fresh use surged 49.3 percent, after falling 24.0 percent a month earlier. The indexes for dairy products, beef and veal, and fresh fruits and melons also turned up, after decreasing in August. Prices for fresh and dry vegetables, soft drinks, and finfish and shellfish rose at faster rates in September than they had in the previous month. Alternatively, the index for processed fruits and vegetables declined 0.2 percent, after inching up 0.1 percent in August. Prices for confectionery end products and processed turkeys also moved down, following gains in the prior month. For the 3 months ended September 2005, the index for finished consumer foods increased at a 3.4-percent SAAR, after decreasing at a 5.5-percent SAAR for the 3 months ended in June.

Prices for finished consumer goods other than foods and energy went up 0.2 percent in September, subsequent to a 0.1-percent decline in August. Leading this upturn, the passenger cars index rose 0.9 percent, following a 1.3-percent drop in the preceding month. Prices for alcoholic beverages, men's and boys' apparel, floor coverings, and periodical circulation also turned up in September, after falling a month earlier. The index for women's, girls', and infants' apparel increased more in September than it had in August, while prices for newspaper circulation advanced, after showing no change in the prior month. By contrast, the index for sanitary papers and health products decreased 0.3 percent in September, compared with a 0.7-percent gain in the prior month. Prices for soaps and synthetic detergents, which were unchanged in August, also declined in September. During the third quarter of 2005, the index for finished consumer goods other than foods and energy rose at a 2.2-percent SAAR, after climbing at a 1.5-percent SAAR during the second quarter.

Prices for capital equipment moved up 0.3 percent in September, after edging down 0.1 percent in August. Most of this upturn can be traced to the index for passenger cars, which rose in September following an August decline. The index for commercial furniture also advanced, after falling in August. Prices for communication and related equipment were unchanged in September, following decreases in the preceding month, while the civilian aircraft index moved up, after showing no change in August. Prices for heavy motor trucks and for transformers and power regulators increased at quicker rates in September than they had in the prior month. By contrast, the truck trailers index moved down, after rising in August. Prices for x-ray and electromedical equipment, as well as construction machinery and equipment, also turned down in September. The index for electronic computers declined at a faster rate than it had in August. For the 3 months ended September 2005, capital equipment prices climbed at a 3.1-percent SAAR, after advancing at a 0.6-percent SAAR for the 3 months ended in June.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 2.5 percent in September, following a 0.7-percent gain in the prior month. Accounting for about half of this acceleration, prices for intermediate energy goods rose more than they had in August. The index for materials for nondurable manufacturing also increased at a faster rate in September than it had in the preceding month. The index for materials for durable manufacturing turned up, after falling a month earlier, while prices for materials and components for construction moved up, following no change in August. By contrast, the index for intermediate foods and feeds decreased more in September than it had in the previous month. The index for intermediate goods excluding foods and energy rose 1.2 percent in September, compared with a 0.1-percent decline in the prior month. (See table B.)

The rate of increase in intermediate energy goods prices rose from 3.3 percent in August to 8.3 percent in September. The jet fuel index jumped 16.3 percent, following a 3.5-percent decline in the prior month. Prices for commercial electric power also turned up, after declining in August. The indexes for both industrial and commercial natural gas, gasoline, natural gas to electric utilities, and liquefied petroleum gas moved up at quicker rates in September than they had in the preceding month. Alternatively, price increases for diesel fuel slowed from 3.1 percent in August to 1.5 percent in September. The industrial electric power index also rose less than it had in the previous month. (See table 2.) Prices for intermediate energy goods advanced at a 91.6-percent SAAR in the third quarter of 2005, after climbing at a 10.4-percent SAAR in the prior quarter.

The index for materials for nondurable manufacturing rose 3.4 percent in September, compared with a 0.2-percent increase in the preceding month. Basic organic chemicals prices climbed 8.4 percent, following a 0.6-percent gain in August. The plastic resins and materials index turned up in September, and prices for paper advanced, after showing no change in August. The index for paperboard fell less than it had in the prior month. By contrast, prices for inedible fats and oils dropped 11.1 percent in September, following a 2.3-percent rise in the previous month. The indexes for woodpulp, paint materials, and synthetic fibers also turned down, after posting gains in August. For the 3 months ended in September 2005, prices for materials for nondurable manufacturing increased at a 15.3-percent SAAR, after falling at a 1.0-percent SAAR in the previous quarter.

The materials for durable manufacturing index climbed 2.6 percent in September, compared with a 0.8-percent decrease in the previous month. Leading this upturn, prices for steel mill products rose 3.7 percent, following a 2.7-percent decline in the prior month. The indexes for aluminum mill shapes, building paper and board, and plywood also turned up in September, while prices for titanium mill shapes increased more than they had in August. Alternatively, the prepared paint index fell 0.2 percent in September, after moving up 0.4 percent in the preceding month. Prices for unprocessed filament yarns and hardwood lumber also turned down, following gains in August. From June to September 2005, the index for materials for durable manufacturing increased at a 3.1-percent SAAR, after falling at an 8.3-percent SAAR in the second quarter of 2005.

Materials and components for construction prices rose 1.1 percent in September, after showing no change in the prior month. The plywood index jumped 14.4 percent, following a 3.0-percent drop in preceding month. Prices for steel mill products, softwood lumber, building paper and board, and plastic construction products also moved up in September, after falling in the prior month, while the paving mixtures and blocks index increased more than it had a month earlier. By contrast, price increases for asphalt felts and coatings slowed from 8.5 percent in August to 1.1 percent in September. The indexes for nonferrous wire and cable and for gypsum products also advanced less than they had in the previous month. During the third quarter of 2005, the materials and components for construction index went up at a 3.7-percent SAAR, after rising at a 0.5-percent SAAR in the second quarter.

Intermediate foods and feeds prices moved down 0.6 percent in September, following a 0.4-percent slide in the preceding month. The index for prepared animal feeds decreased 3.7 percent, after falling 1.6 percent in the prior month. Prices for fluid milk products; sausage, deli, and cooked meats; and dry milk products also turned down in September, following gains in the preceding month. The indexes for pork and for refined sugar and byproducts rose less than they had in August. Alternatively, beef and veal prices turned up 1.1 percent in September, compared with a 2.7-percent decline in the prior month. The indexes for natural, processed, and imitation cheese and flour also advanced, after falling in August, while prices for soft drink beverage bases increased, following no change in the previous month. The index for intermediate foods and feeds fell at a 0.6-percent SAAR during the third quarter of 2005, after showing no change in the preceding quarter.

Crude goods

The Producer Price Index for Crude Materials for Further Processing advanced 10.2 percent in September, following a 2.3-percent increase in August. Prices for crude energy materials and for crude goods other than foods and energy also rose more in September than they had in the prior month. The index for crude foodstuffs and feedstuffs turned up, after falling a month earlier. (See table B.)

Prices for crude energy materials jumped 16.9 percent in September, following a 3.8-percent gain in the preceding month. Accounting for most of this acceleration, the natural gas index advanced 30.7 percent, after rising 4.6 percent in August. Coal prices turned up 0.7 percent, compared with a 0.8-percent decline in the previous month. Alternatively, the index for crude petroleum climbed 0.8 percent in September, after advancing 3.7 percent in the prior month. (See table 2.) After increasing at a 1.0- percent SAAR during the second quarter of 2005, the index for crude energy materials surged at a 250.3-percent SAAR from June to September.

Prices for crude foodstuffs and feedstuffs rose 1.5 percent in September, after falling 1.4 percent in the preceding month. The index for slaughter cattle increased 6.7 percent, following a 2.2-percent decline in August. Prices for fluid milk, wheat, and fresh fruits and melons also turned up, after decreasing in the previous month. The indexes for fresh and dry vegetables and for slaughter turkeys rose more in September than they had a month earlier. By contrast, prices for slaughter broilers and fryers dropped 4.0 percent in September, following a 4.7-percent advance in the prior month. The indexes for soybeans and corn fell more in September than they had in August, while prices for slaughter hogs increased at slower rates during the same period. The index for crude foodstuffs and feedstuffs edged up at a 0.3-percent SAAR for the three months ended in September 2005, after declining at a 23.2-percent SAAR in the preceding quarter.

Basic industrial material prices advanced 5.3 percent in September, following a 4.6-percent gain in the previous month. The index for iron and steel scrap increased 22.8 percent, after rising 19.7 percent in August. Prices for copper ores, raw cotton, and miscellaneous roundwood products turned up in September, following declines in the prior month. The hides and skins index fell less than it had in the preceding month. Conversely, copper base scrap prices edged up 0.2 percent in September, compared with a 5.1-percent advance a month earlier. The indexes for gold ores, aluminum base scrap, and for construction sand, gravel, and crushed stone also rose less in September than they had in August. During the third quarter of 2005, the index for crude nonfood materials less energy rose at a 66.3- percent SAAR, after falling at a 22.8-percent SAAR during the previous quarter.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries gained 14.9 percent in September, following a 3.6-percent rise in August. (Net output price indexes are not seasonally adjusted.) Most of this faster rate of increase can be attributed to prices received by the oil and gas extraction industry group, which surged 19.8 percent in September after increasing 4.8 percent in August. Prices received by the industry for oil and gas operations support activities also rose more in September than in the prior month. The industry indexes for copper ore and nickel ore mining, bituminous coal underground mining, and construction sand and gravel mining turned up, after falling a month earlier. By contrast, the industry index for oil and gas wells drilling advanced 1.0 percent in September, compared to a 4.3-percent increase in the prior month. Prices received by the industry for gold ore mining also rose less than they had in August. The industry indexes for crushed and broken granite mining and quarrying and for potash, soda, and borate mineral mining turned down in September. Prices received by the phosphate rock mining industry fell more than they had a month earlier. For the three months ended in September 2005, the Producer Price Index for the Net Output of Total Mining Industries advanced at an annualized rate of 198.6 percent, compared with a 0.5-percent rate of decrease in the preceding quarter. In September, the Producer Price Index for Total Mining Industries was 231.1 (December 1984=100), 54.5 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries advanced 1.6 percent in September, following a 0.5- percent gain in August. The majority of this acceleration was due to prices received by the petroleum and coal products manufacturing industry group, which climbed 12.2 percent in September after gaining 5.1 percent in August. The industry group indexes for wood product manufacturing, transportation equipment, primary metal manufacturing, and food manufacturing turned up, after declining in the prior month. Prices received by the industry groups for chemicals and for plastics and rubber products advanced more than they had in the previous month. Alternatively, the industry group index for computer and electronic products declined 0.2 percent, after edging down 0.1 percent in August. For the three months ended in September 2005, the Producer Price Index for the Net Output of Total Manufacturing Industries advanced at an annualized rate of 13.2 percent, compared with a 1.3-percent rate of increase in the prior quarter. In September, the Producer Price Index for Total Manufacturing Industries was 154.1 (December 1984=100), 6.9 percent above its year-ago level.

Services. Among services industries in September, prices received by the commercial banking industry increased 4.0 percent, after declining 0.6 percent in August. The industry indexes for cellular and other wireless carriers; hotels and motels (excluding casino hotels); and passenger car rental also turned up, after declining in the prior month. Prices received by the industry group for general medical and surgical hospitals gained more in September than a month earlier, and the index for savings institutions increased, following no change in August. Alternatively, prices received by the investment banking and securities dealing industry fell 7.2 percent, after advancing 2.6 percent in August. Prices received by lessors of nonresidential buildings (excluding miniwarehouses) rose less than they had in the preceding month. The industry index for scheduled passenger air transportation declined at a faster rate than it had in August. The industry indexes for employee leasing services and nonresidential property managers turned down, after rising in August. Prices received by direct property and casualty insurance carriers were unchanged, after rising a month earlier.