January 2006 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 rose 0.3 percent in January, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.6-percent advance in December and a 0.4-percent decline in November. At the earlier stages of processing, prices for intermediate goods moved up 1.2 percent, compared with a 0.1-percent rise in the prior month. The crude goods index decreased 0.5 percent, after falling 2.3 percent in December. (See table A.)

2006 Jan. .3 .2 0 .4 5.7 1.2 -.5 NOTE: Some of the percent changes shown here and elsewhere in this release may differ from those previously reported because seasonal adjustment factors have been recalculated to reflect developments during 2005. In addition, indexes for September 2005 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.

Among finished goods, prices for energy goods were unchanged in January, following a 2.0-percent rise in the prior month. The rate of increase in the finished consumer foods index slowed from 0.8 percent in December to 0.2 percent in January. By contrast, prices for finished goods other than foods and energy went up 0.4 percent, after edging up 0.1 percent in the preceding month.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.8 percent in January to 160.0 (1982 = 100). From January 2005 to January 2006, prices for finished goods rose 5.7 percent. Over the same period, the index for finished energy goods jumped 25.0 percent, prices for finished goods other than foods and energy moved up 1.5 percent, and the finished consumer foods index advanced 1.9 percent. For the 12 months ended January 2006, intermediate goods prices increased 9.3 percent, while the index for crude goods rose 23.6 percent.

Finished goods

Finished energy goods prices were unchanged in January, following a 2.0-percent advance in December. The gasoline index turned down 3.5 percent, following a 7.2-percent gain in the previous month. Prices for liquefied petroleum gas, home heating oil, and diesel fuel also declined, after rising in December. Alternatively, the residential electric power index increased 3.0 percent in January, following a 0.2-percent rise a month earlier. Prices for residential natural gas turned up, after declining in the preceding month. (See table 2.)

2006 Jan. .9 1.9 1.0 9.3 -3.0 .6 -.1 23.6 NOTE: Some of the percent changes shown here and elsewhere in this release may differ from those previously reported because seasonal adjustment factors have been recalculated to reflect developments during 2005. In addition, indexes for September 2005 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.

The index for finished consumer foods increased 0.2 percent in January, following a 0.8-percent gain in the previous month. Leading this deceleration, the fresh and dry vegetables index rose 5.9 percent, after surging 21.7 percent in December. Prices for beef and veal also advanced less than they had in the preceding month. The indexes for fresh fruits and melons, finfish and shellfish, dairy products, and processed turkeys turned down in January, while prices for processed young chickens fell more than they had in the prior month. By contrast, the soft drinks index went up 1.0 percent in January, compared with a 0.2-percent decline in the preceding month. Prices for shortening and cooking oils also turned up, and the processed fruits and vegetables index rose more than it had in December.

Prices for finished consumer goods other than foods and energy advanced 0.4 percent in January, after rising 0.2 percent in the previous month. The light motor trucks index went up 0.7 percent, following a 0.7- percent drop in the prior month. Prices for passenger cars, sanitary papers and health products, sporting and athletic goods, and alcoholic beverages also turned up in January, while the book publishing index increased more than it had a month earlier. Alternatively, newspaper circulation prices declined 0.3 percent, after rising 1.4 percent in December. The indexes for tires and for women's, girls', and infants' apparel also turned down in January, and prices for cigarettes decreased, following no change in the preceding month.

The index for capital equipment rose 0.3 percent in January, after edging up 0.1 percent in the prior month. Prices for passenger cars climbed 1.1 percent, compared with a 0.1-percent decline in December. The indexes for light motor trucks and for tools, dies, jigs, fixtures, and industrial molds also increased, after falling in the previous month. Prices for civilian aircraft, construction machinery and equipment, and commercial furniture advanced at quicker rates than they had in the preceding month. By contrast, communication and related equipment prices inched down 0.1 percent in January, following a 0.6-percent increase in the previous month. The indexes for integrating and measuring instruments and for industrial material handling equipment also fell, after rising in December.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components increased 1.2 percent in January, following a 0.1-percent gain in December. Prices for intermediate energy goods rose in January, after falling in the prior month. The materials for nondurable manufacturing index moved up, following no change in December, while prices for materials and components for construction increased more in January than they had a month earlier. The index for intermediate foods and feeds turned up, after declining in the previous month. By contrast, prices for materials for durable manufacturing rose less in January than in the preceding month. The index for intermediate goods other than foods and energy climbed 1.0 percent, following a 0.3-percent advance in December. (See table B.)

The index for intermediate energy goods increased 1.9 percent in January, after decreasing 0.5 percent in December. Prices for industrial natural gas jumped 5.7 percent, following a 4.1-percent drop in the prior month. The indexes for industrial electric power, jet fuel, and commercial natural gas also turned up in January, after declining a month earlier. Prices for commercial electric power advanced at faster rates than they had in December, while the index for natural gas to electric utilities fell less than it had in the previous month. Alternatively, gasoline prices moved down 3.5 percent in January, following a 7.2-percent rise in December. The indexes for liquefied petroleum gas, diesel fuel, and home heating oil also turned down, after climbing in the preceding month. (See table 2.)

Prices for materials for nondurable manufacturing, which were unchanged in December, increased 1.9 percent in January. The index for primary basic organic chemicals surged 10.4 percent, following a 1.9- percent decrease in December. Prices for gray fabrics, inedible fats and oils, paper, and paperboard also moved up in January, after falling a month earlier. The index for basic inorganic chemicals advanced at a quicker rate than it had in December, while prices for plastic resins and materials declined less than in the prior month. By contrast, prices for fertilizer materials decreased 1.9 percent in January, after falling 0.1 percent in December. The index for intermediate basic organic chemicals rose less than in the previous month.

The index for materials and components for construction increased 1.0 percent in January, after climbing 0.6 percent in December. The majority of this acceleration is attributable to prices for concrete products, which rose 1.9 percent following a 0.3-percent decline in the prior month. The indexes for softwood lumber, wiring devices, asphalt felts and coatings, and cement advanced at faster rates in January than they had a month earlier. Prices for treated wood and mineral wool for structural insulation turned up, after falling in December. Conversely, the index for nonferrous wire and cable moved down 0.3 percent in January, following a 4.5-percent jump in the preceding month. Prices for fabricated structural metal products and millwork rose less than they had in the previous month.

The index for intermediate foods and feeds increased 0.9 percent in January, after inching down 0.1 percent in December. Prices for prepared animal feeds advanced 2.5 percent, compared with a 0.4-percent gain in the prior month. The indexes for confectionery materials, refined sugar and byproducts, and dry milk products also increased at quicker rates in January than they had a month earlier. Prices for shortening and cooking oils and for pork turned up, after retreating in December, while the index for fluid milk products declined at a slower rate than it had in the preceding month. By contrast, the index for natural, processed, and imitation cheese decreased, following a rise in December. The index for beef and veal increased less in January than it had a month earlier, while prices for processed young chickens fell more than in the preceding month.

The materials for durable manufacturing index advanced 1.0 percent in January, after rising 1.5 percent in December. Prices for primary aluminum (except extrusion billet) increased 3.3 percent, compared with a 10.6- percent surge in the previous month. The indexes for copper cathode and refined copper, copper and brass mill shapes, aluminum mill shapes, and building paper and board also rose less in January than a month earlier. Prices for steel mill products turned down, following December gains. Conversely, the softwood lumber index climbed 4.9 percent in January, after increasing 1.6 percent in the preceding month. Prices for cement and prepared paint also moved up at faster rates than they had in the prior month.

Crude goods

The Producer Price Index for Crude Materials for Further Processing declined 0.5 percent in January, following a 2.3-percent fall in December. In January, decreasing prices for crude foodstuffs and feedstuffs and basic industrial materials outweighed rising prices for crude energy materials. (See table B.)

The crude foodstuffs and feedstuffs index fell 3.0 percent in January, after advancing 2.5 percent in December. Prices for slaughter cattle moved down 2.1 percent, following a 4.1-percent rise in the prior month. The indexes for slaughter hogs, soybeans, and slaughter turkeys also turned down in January. Prices for corn and for fresh and dry vegetables grew at slower rates than they had in the preceding month. By contrast, prices for slaughter broilers and fryers declined 2.7 percent, following a 6.2-percent decrease in December. The wheat index also decreased at a slower rate than it had in the previous month. Prices for fluid milk were unchanged, after moving down in December. The index for raw cane sugar and byproducts rose more than a month earlier. (See table 2.)

Prices for basic industrial materials edged down 0.1 percent in January, following a 0.5-percent increase in December. The iron and steel scrap index fell 8.4 percent in January, following a 1.4-percent drop in the preceding month. Prices for phosphates and pulpwood also decreased more than they had in December. The index for nonferrous metal ores increased at a slower rate, compared with the previous month. Conversely, the nonferrous scrap index advanced 6.8 percent in January, after rising 0.2 percent in December. The index for construction sand, gravel, and crushed stone also rose more than it had in December. Prices for wastepaper, iron ore, hides and skins, and raw cotton also turned up in January. The index for hardwood logs, bolts, and timber fell less than in the previous month.

The crude energy materials index increased 0.6 percent in January, subsequent to a 5.4-percent decline in December. Prices for coal rose 10.1 percent, after showing no change in the previous month. The natural gas index fell 1.4 percent in January, after decreasing 11.4 percent in the prior month. Conversely, prices for crude petroleum gained 2.6 percent in January, following a 7.9-percent advance in December.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries declined 0.2 percent in January, following a 2.9-percent drop in the prior month. (Net output price indexes are not seasonally adjusted.) Price decreases received by the industries for natural gas liquid extraction and for oil and gas operations support activities outweighed rising prices received by the industries for crude petroleum and natural gas extraction, oil and gas well drilling, bituminous coal underground mining, copper ore and nickel ore mining, and bituminous coal and lignite surface mining. In January, the Producer Price Index for the Net Output of Total Mining Industries was 237.7 (December 1984 = 100), 45.6 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries advanced 0.9 percent in January, following a 0.1- percent gain in the previous month. Prices received by manufacturers of petroleum and coal products rose 3.2 percent, after falling 0.4 percent in December. The industry group indexes for transportation equipment, beverages and tobacco, and plastics and rubber products also turned up in January, after declining a month earlier. Prices received by manufacturers of chemicals, nonmetallic mineral products, and machinery advanced more than they had in December. By contrast, the industry group index for primary metal manufacturing increased 0.9 percent, after rising 1.4 percent in the previous month. In January, the Producer Price Index for the Net Output of Total Manufacturing Industries was 154.1 (December 1984 = 100), 5.4 percent above its year-ago level.

Services. Among services industries in January, prices received by the scheduled passenger air transportation industry advanced 3.0 percent, after falling 3.2 percent in the prior month. The industry indexes for offices of lawyers; investment banking and securities dealing; saving institutions; long-distance, general freight trucking (less than truckload); and hotels and motels (excluding casinos) also turned up, following declines in December. Prices received by the United States Postal Service increased in January, after remaining unchanged a month earlier. The indexes for direct health and medical insurance carriers, general medical and surgical hospitals, commercial banking, and couriers rose more than in the previous month. By contrast, the industry index for temporary help services declined 1.2 percent in January, following a 1.0-percent increase a month earlier.

Recalculation of Seasonal Adjustment Factors

Effective with this release, seasonal adjustment factors have been recalculated to reflect price-movement patterns during 2005 for stage-of- processing (SOP) and commodity-grouping indexes. This routine annual recalculation may affect previously published seasonally adjusted indexes and percent changes for January 2001 through December 2005. Revised seasonally adjusted data for this period, as well as seasonal adjustment factors for commodity indexes to be used through December 2006, were released February 15, 2006. To request this information, 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.

The table below provides monthly seasonally adjusted percent changes for the three major SOP categories during 2005, based on former and recalculated seasonal factors. These percent changes include final price data through August 2005 and may differ from values shown in tables A and B of this release, which include final price data through September 2005.

Resampling of Industries

Effective with this release, the Producer Price Index (PPI) includes data for 38 resampled 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 January 2006 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

311520 Ice cream and frozen desserts 311711 Seafood canning 312140 Distilleries 312229 Other tobacco product manufacturing 315223 Men's and boys' shirt (excluding work shirt) manufacturing 315299 All other cut and sew apparel manufacturing 316110 Leather and hide tanning and finishing 321114 Wood preservation 321211 Hardwood veneer and plywood manufacturing 321212 Softwood veneer or plywood manufacturing 322232 Envelope manufacturing 325182 Carbon black manufacturing 326121 Unlaminated plastics profile shapes 326122 Plastics pipe and pipe fitting manufacturing 326130 Laminated plastics plate, sheet, and shape manufacturing 326150 Urethane and other foam product manufacturing 332439 Other metal container manufacturing 333612 Speed changer, industrial high-speed drive, and gear manufacturing 333923 Overhead crane, hoist, and monorail system manufacturing 334415 Electronic resistor manufacturing 335121 Residential electric lighting fixture manufacturing 335991 Carbon and graphite product manufacturing 336110 Automobile and light duty motor vehicle manufacturing 336120 Heavy duty truck manufacturing 336312 Gasoline engine and engine parts manufacturing 336330 Motor vehicle steering and suspension components manufacturing 336340 Motor vehicle brake system manufacturing 336350 Motor vehicle transmission and power train parts manufacturing 336399 All other motor vehicle parts manufacturing 339114 Dental equipment and supplies manufacturing 339115 Ophthalmic goods manufacturing 339943 Marking device manufacturing

Resampling of Industries--Continued