October 2005 Producer Price Index

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The Bureau of Labor Statistics of the U.S. Department of Labor reported today that the seasonally adjusted Producer Price Index for Finished Goods advanced 0.7 percent in October. This gain followed a 1.9- percent jump in September and a 0.6-percent rise in August. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 3.0 percent, after increasing 2.5 percent in the preceding month. The index for crude materials rose 6.7 percent in October, compared with a 10.2-percent gain in September. (See table A.)

Among finished goods, prices for energy goods climbed 4.1 percent in October, following a 7.1-percent increase in September. The finished consumer foods index declined 0.1 percent, compared with a 1.4-percent advance in the prior month. Prices for finished goods other than foods and energy fell 0.3 percent in October, after rising at the same rate in September.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 1.3 percent in October to 161.0 (1982 = 100). From October 2004 to October 2005, prices for finished goods advanced 5.9 percent. Over the same period, prices for finished energy goods jumped 26.1 percent, the index for finished goods other than foods and energy rose 1.9 percent, and the index for finished consumer foods advanced 0.3 percent. Prices for intermediate goods increased 10.5 percent during the 12-month period ended October 2005, and the crude goods index moved up 31.5 percent.

Finished goods

The rate of increase in the index for finished energy goods slowed from 7.1 percent in September to 4.1 percent in October. Prices for liquefied petroleum gas climbed 1.4 percent, following a 24.7-percent jump in September. The gasoline index turned down 3.3 percent, after increasing 12.7 percent a month earlier. By contrast, prices for residential electric power rose 2.9 percent, following no change in the prior month. The indexes for residential natural gas, home heating oil, diesel fuel, kerosene, and finished lubricants advanced at faster rates in October than they had in the previous month. (See table 2.)

Prices for finished consumer foods declined 0.1 percent in October, compared with a 1.4-percent gain a month earlier. Subsequent to a 49.3- percent jump in September, the index for eggs for fresh use fell 25.2 percent in October. Prices for fresh and dry vegetables, pork, fresh fruits and melons, and soft drinks also turned down, following increases in the prior month. The index for dairy products rose less than it had a month earlier. Alternatively, price increases for beef and veal accelerated from 1.1 percent in September to 3.2 percent in October. The index for finfish and shellfish also rose more in October than it had in the previous month.

The index for finished consumer goods other than foods and energy declined 0.2 percent in October, after rising 0.2 percent in the previous month. Passenger car prices decreased 3.0 percent, compared with a 0.9- percent gain in September. For the 12 months ended October 2005, the index for passenger cars fell 2.1 percent. Prices for light motor trucks fell 2.2 percent, after rising 0.5 percent in September. From October 2004 to October 2005, the index for light motor trucks fell 3.9 percent. In accordance with usual practice, most new model year passenger cars and light motor trucks were introduced into the PPI in October. (See Report on Quality Changes for 2006 Model Vehicles, USDL 05-2199.) Prices for apparel, floor coverings, and newspaper circulation turned down in October. The pharmaceutical preparations index moved up at a slower pace in October than it had in the prior month. By contrast, prices for soaps and synthetic detergents edged up 0.1 percent, after falling 1.5 percent in September. The index for sanitary papers and health products also turned up, after declining in September. Book publishing prices rose in October, following no change a month earlier. The index for mobile homes increased more than it had in the prior month.

The capital equipment index moved down 0.2 percent in October, after rising 0.3 percent a month earlier. Prices for light motor trucks, passenger cars, agricultural machinery and equipment, and railroad equipment turned down, following increases in September. The index for heavy motor trucks rose less in October than it had a month earlier. Conversely, prices for civilian aircraft moved up 0.6 percent, following a 0.2-percent gain in the prior month. The indexes for industrial material handling equipment and for construction machinery and equipment turned up, after decreasing in September. Prices for communication and related equipment edged up in October, following no change in the preceding month.

Intermediate goods

The index for Intermediate Materials, Supplies, and Components advanced 3.0 percent in October, after rising 2.5 percent in September. Prices for intermediate energy goods and for materials and components for construction increased more than they had in September. The intermediate foods and feeds index moved up in October, after falling a month earlier. By contrast, the indexes for materials for both durable and nondurable manufacturing increased at slower rates, compared with September. (See table B.)

Prices for intermediate energy goods climbed 9.3 percent in October, after rising 8.3 percent in the prior month. The diesel fuel index moved up 22.7 percent, after advancing 1.5 percent in September. Prices for commercial natural gas, commercial electric power, residual fuel, and jet fuel also increased at faster rates in October, compared with a month earlier. By contrast, the gasoline index fell 3.3 percent, following a 12.7-percent gain in September. Prices for liquefied petroleum gas and natural gas to electric utilities advanced less than they had in the previous month. (See table 2.)

The intermediate foods and feeds index moved up 0.7 percent in October, following a 0.6-percent decrease in September. Prices for prepared animal feeds edged up 0.3 percent, following a 3.7-percent decline in the preceding month. The index for fluid milk products also turned up, after decreasing in September. Prices for beef and veal and for refined sugar and byproducts increased at faster rates in October, compared with the previous month. Alternatively, prices for pork decreased 4.2 percent in October, following a 4.7-percent advance in September. The indexes for natural, processed, and imitation cheese and for processed young chickens also turned down after rising in October. Prices for soft drink beverage bases were unchanged, after increasing in the previous month.

Prices for materials and components for construction rose 1.4 percent in October, subsequent to a 1.1-percent increase in September. The plastic construction products index rose 7.4 percent, after advancing 1.6 percent a month earlier. Prices for nonferrous wire and cable also increased more than they had in September. The wiring devices index turned up in October, while the fabricated structural metal products index rose, after showing no change in the previous month. By contrast, the plywood index increased 5.1 percent, following a 14.4-percent jump in September. Prices for paving mixtures and blocks also advanced less in October than they had in the prior month, while the softwood lumber index turned down, after rising in September.

The materials for nondurable manufacturing index advanced 2.8 percent in October, following a 3.4-percent rise in the preceding month. Prices for primary basic organic chemicals went up 7.7 percent, after climbing 17.5 percent in September. The processed yarns and threads index also increased at a slower rate than it had a month earlier. Prices for paper and finished fabrics turned down in October. By contrast, the plastic resins and materials index increased 6.6 percent, following a 3.9-percent gain in September. Prices for inedible fats and oils, paperboard, and synthetic rubber turned up in October, after declining in the previous month.

Prices for materials for durable manufacturing advanced 2.0 percent in October, following a 2.6-percent gain a month earlier. The hot rolled steel sheet and strip index increased 4.0 percent, after rising 9.4 percent in September. Prices for aluminum mill shapes, semifinished steel mill products, plywood, and cold finished steel bars also rose less in October than they had in the preceding month. The index for titanium mill shapes turned down, after increasing in the previous month. Conversely, prices for primary nonferrous metals advanced 6.6 percent in October, subsequent to a 1.8-percent rise in the prior month. The index for cold rolled steel sheet and strip turned up, after declining a month earlier.

Crude goods

The Producer Price Index for Crude Materials for Further Processing advanced 6.7 percent in October, following a 10.2-percent gain in September. This slower rate of increase can be primarily attributed to prices for crude energy materials, which rose less in October than they had a month earlier. The index for crude nonfood materials less energy turned down, after advancing in September, while prices for crude foodstuffs and feedstuffs moved up less in October than they had in the previous month. (See table B.)

The index for crude energy materials climbed 12.4 percent in October, subsequent to a 16.9-percent jump in September. Leading this deceleration, natural gas prices rose 20.3 percent, after surging 30.7 percent in the preceding month. The coal index inched down 0.2 percent in October, following a 0.7-percent increase a month earlier. Crude petroleum prices increased 0.6 percent, compared with a 0.8-percent gain in September. (See table 2.)

The index for crude nonfood materials less energy declined 1.2 percent in October, after rising 5.3 percent in the prior month. Prices for iron and steel scrap fell 7.8 percent, following a 22.8-percent advance in September. The index for aluminum base scrap also moved down in October, after increasing in the previous month. Prices for phosphates, miscellaneous roundwood products, and raw cotton climbed less than they had in September. By contrast, the index for copper base scrap jumped 11.9 percent in October, following a 0.2-percent gain a month earlier. Prices for gold ores and pulpwood also moved up more than they had in the prior month.

The index for crude foodstuffs and feedstuffs edged up 0.2 percent in October, after increasing 1.5 percent in September. Slaughter cattle prices rose 1.7 percent, compared with a 6.7-percent advance in the preceding month. The indexes for slaughter turkeys and wheat also moved up at slower rates in October than they had a month earlier. Prices for slaughter broilers and fryers fell more than in September. The index for fresh and dry vegetables (excluding potatoes), as well as prices for fresh fruits and melons, turned down in October. Alternatively, the soybeans index declined 5.0 percent in October, following a 14.7-percent drop in September. Corn prices also decreased at slower rates than they had in the previous month. The indexes for slaughter hogs and unprocessed finfish increased more in October than in September.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries advanced 9.8 percent in October, after increasing 14.9 percent in the previous month. (Net output price indexes are not seasonally adjusted.) Prices received by the industry for natural gas liquid extraction moved up 13.0 percent, following a 24.7-percent rise in September. The industry indexes for crude petroleum and natural gas extraction and for oil and gas operations support activities also increased less in October than they had a month earlier. Prices received by the industries for bituminous coal underground mining and for crushed and broken limestone mining and quarrying turned down, compared with gains in the preceding month. By contrast, the oil and gas wells drilling industry index climbed 8.9 percent in October, following a 1.0-percent increase in the prior month. Prices received by the industries for gold ore mining and for bituminous coal and lignite surface mining also advanced more than they had in September. The industry index for phosphate rock mining fell less than it had in the preceding month. In October, the Producer Price Index for Total Mining Industries was 253.8 (December 1984 = 100), 58.0 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries went up 1.6 percent in October, after increasing at the same rate in the previous month. In October, rising prices received by manufacturers of petroleum and coal products, transportation equipment, chemicals, plastics and rubber products, machinery, and food outweighed falling prices received by the industry groups for computer and electronic product manufacturing, printing and related support activities, apparel manufacturing, paper manufacturing, and leather and allied product manufacturing. In October, the Producer Price Index for Total Manufacturing Industries was 156.5 (December 1984 = 100), 6.8 percent above its year-ago level.

Services. Among services industries in October, the industry index for commercial banking turned down 3.5 percent, following a 4.0-percent gain in the prior month. Prices received by the industries for savings institutions, hotels and motels (excluding casino hotels), cellular and other wireless carriers, inland water freight transportation, passenger car rental, and direct life insurance carriers also fell, after advancing in September. By contrast, the scheduled passenger air transportation industry index increased 3.6 percent in October, following a 3.6-percent decline in the preceding month. Prices received by the television broadcasting industry also turned up, after decreasing in the prior month. The industry index for investment banking and securities dealing fell less than it had in September, while prices received by the industries for direct health and medical insurance carriers and for offices of real estate agents and brokers advanced in October, following no change a month earlier.