May 2006 Producer Price Index

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The Producer Price Index for Finished Goods rose 0.2 percent in May, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.9-percent jump in April and a 0.5-percent advance in March. At the earlier stages of processing, prices received by manufacturers of intermediate goods climbed 1.1 percent in May after rising 0.9 percent in the preceding month, while the crude goods index moved up 2.0 percent following a 1.2-percent gain in April. (See table A.)

Most of the deceleration in the finished goods index can be traced to prices for energy goods, which slowed to a 0.4-percent increase in May after advancing 4.0 percent in April. Prices for finished consumer foods turned down 0.5 percent following a 0.1-percent gain in the prior month. Alternatively, the index for finished goods other than foods and energy increased 0.3 percent in May compared with a 0.1-percent rise in April.

Before seasonal adjustment, the Producer Price Index for Finished Goods advanced 0.4 percent in May to 161.2 (1982 = 100). From May 2005 to May 2006, prices for finished goods increased 4.5 percent. Over the same period, the index for finished energy goods climbed 20.6 percent, prices for finished goods other than foods and energy rose 1.5 percent, and the index for finished consumer foods fell 1.5 percent. For the 12 months ended May 2006, prices for intermediate goods increased 8.9 percent and the crude goods index moved up 8.6 percent.

Finished goods

The index for finished energy goods rose 0.4 percent in May after advancing 4.0 percent in April. Gasoline prices climbed 2.2 percent in May following a 12.3-percent jump a month earlier. The indexes for home heating oil, liquefied petroleum gas, residential electric power, diesel fuel, finished lubricants, and kerosene also increased at slower rates than they had in the preceding month. Prices for residential natural gas fell more than in April. (See table 2.)

Prices for finished consumer foods declined 0.5 percent in May compared with a 0.1-percent rise in April. The index for fresh and dry vegetables dropped 14.0 percent following an 18.1-percent increase in the preceding month. Prices for fresh fruits and melons, eggs for fresh use, and for finfish and shellfish also turned down in May after rising a month earlier. Conversely, the index for beef and veal rose 2.3 percent in May compared with a 2.7-percent decrease in April. Prices for pork, soft drinks, and bakery products also turned up in May. The indexes for dairy products and processed young chickens fell less than they had in April.

The index for finished consumer goods other than foods and energy moved up 0.2 percent in May following a 0.1-percent gain in April. In May, rising prices for pharmaceutical preparations; soaps and synthetic detergents; household furniture; pet food; mobile homes; women's, girls', and infants' apparel; tires; and sanitary paper products outweighed falling prices for alcoholic beverages and passenger cars.

The capital equipment index advanced 0.3 percent in May after moving up 0.2 percent in April. In May, higher prices for heavy motor trucks, communication and related equipment, commercial furniture, civilian aircraft, and for agricultural machinery and equipment more than offset lower prices for passenger cars, integrating and measuring instruments, and semiconductor manufacturing equipment.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 1.1 percent in May following a 0.9-percent gain in the preceding month. Prices for materials for durable manufacturing, materials for nondurable manufacturing, and materials and components for construction rose more than they had in April. The index for intermediate foods and feeds decreased less in May than in the prior month, while prices for containers turned up after declining a month earlier. By contrast, the intermediate energy goods index increased at a slower rate in May than it had in the previous month. Prices for intermediate materials less foods and energy rose 1.1 percent compared with a 0.4-percent gain in April. (See table B.)

The index for materials for durable manufacturing moved up 4.4 percent in May after rising 1.6 percent in the prior month. Hot rolled steel sheet and strip prices jumped 7.9 percent following no change in April. The indexes for copper and brass mill shapes and for aluminum mill shapes increased more in May than they had in the preceding month. Prices for semifinished steel mill products, secondary aluminum, softwood lumber, and for hot rolled steel bars, plates, and structural shapes turned up after falling a month earlier. Alternatively, the cold rolled steel sheet and strip index climbed 1.2 percent in May following a 4.3-percent advance in the prior month. Prices for primary aluminum (except extrusion billet) also rose less than they had in April, and the index for titanium mill shapes turned down in May. (See table 2.)

Prices for materials for nondurable manufacturing increased 1.4 percent in May following a 0.1-percent rise in the preceding month. The paperboard index moved up 5.3 percent after rising 0.3 percent in the prior month. Prices for primary basic organic chemicals also increased more than they had in April. The index for plastic resins and materials fell less than it had a month earlier. Prices for inedible fats and oils and for phosphates turned up in May, while the index for stemmed and redried tobacco was unchanged after declining in the previous month. By contrast, prices for paint materials fell 2.7 percent in May compared with a 2.1- percent rise in April. The index for potassium and sodium compounds (excluding bleaches and alkalies) also decreased after advancing a month earlier. Prices for intermediate basic organic chemicals declined following no change in April.

Prices for materials and components for construction climbed 1.2 percent in May following a 0.4-percent rise in the prior month. The nonferrous wire and cable index jumped 16.6 percent after moving up 5.7 percent in the previous month. Prices for steel mill products, paving mixtures and blocks, and fabricated structural metal products also increased more than they had in April. The index for softwood lumber turned up in May, while prices for plastic construction products showed no change after falling in the preceding month. Alternatively, the concrete products index advanced 0.6 percent in May following a 1.2-percent rise in the prior month. Plywood prices turned down after increasing in April.

The index for intermediate foods and feeds edged down 0.2 percent in May following a 0.7-percent decline in the previous month. Prices for fluid milk products decreased 0.4 percent after falling 2.5 percent in April. The indexes for natural, processed, and imitation cheese and for processed young chickens also fell less in May than they had a month earlier. Prices for beef and veal and for pork turned up following declines in the previous month. Conversely, the refined sugar and byproducts index moved down 0.6 percent after rising 3.5 percent in April. Prices for confectionery materials and for shortening and cooking oils also turned down in May, while the flour index increased less than it had in the previous month.

Prices for containers advanced 0.3 percent in May after declining 0.2 percent in the prior month. The aluminum cans index edged up 0.1 percent following a 1.4-percent decrease in April. Prices for steel cans also turned up after falling in the preceding month. The index for glass containers rose in May after showing no change in the previous month, and prices for paper boxes and containers increased more than they had in April. Conversely, the paper, plastic, and foil bags index fell 1.1 percent compared with a 0.4-percent decrease in the prior month.

Prices for intermediate energy goods moved up 1.0 percent in May following a 2.8-percent rise in the prior month. The jet fuels index advanced 1.6 percent after surging 18.1 percent in April. Prices for gasoline, diesel fuel, and home heating oil also increased less than they had in the preceding month. The indexes for both industrial and commercial electric power fell following gains in the prior month. By contrast, residual fuel prices moved up 10.3 percent in May after dropping 17.4 percent in the previous month. The index for natural gas to electric utilities also turned up, while prices for both industrial and commercial natural gas decreased at slower rates than they had in April.

Crude goods

The Producer Price Index for Crude Materials for Further Processing rose 2.0 percent in May following a 1.2-percent gain in April. Prices for crude energy materials and basic industrial materials increased more than they had a month earlier. Conversely, the index for crude foodstuffs and feedstuffs fell at a faster rate than it had in April. (See table B.)

The index for crude energy materials advanced 2.5 percent in May following a 1.3-percent increase in the previous month. The majority of this acceleration can be traced to prices for natural gas, which gained 2.3 percent after declining 5.5 percent in April. Alternatively, the index for crude petroleum moved up 3.8 percent in May subsequent to a 10.3-percent advance a month earlier. The coal index decreased 2.2 percent following a 1.0-percent advance in April. (See table 2.)

Prices for crude nonfood materials less energy advanced 6.2 percent in May after rising 4.7 percent in the prior month. The index for gold ores jumped 21.1 percent in May following a 10.0-percent gain in April. Prices for both copper and aluminum base scrap and for iron and steel scrap also increased more than they had a month earlier. The index for phosphates turned up in May. Conversely, prices for raw cotton decreased 13.0 percent in May following a 9.3-percent advance in the previous month. The index for wastepaper rose less than it had a month earlier, while prices for iron ore were unchanged after increasing in the prior month.

Prices for crude foodstuffs and feedstuffs fell 2.3 percent in May subsequent to a 1.4-percent decline in April. The index for slaughter cattle moved down 5.2 percent after decreasing 3.3 percent in the prior month. Prices for fresh and dry vegetables, alfalfa hay, unprocessed finfish, and for fresh fruits and melons turned down in May. The indexes for corn and wheat increased less than they had in the previous month. By contrast, prices for fluid milk fell 1.6 percent in May after decreasing 6.4 percent in April. The indexes for slaughter hogs, slaughter broilers and fryers, and soybeans turned up in May.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries advanced 3.1 percent in May following a 2.3-percent rise in April. (Net output price indexes are not seasonally adjusted.) Prices received by the industry for natural gas liquid extraction increased 2.7 percent after falling 1.9 percent in the previous month. The industry indexes for gold ore mining and for potash, soda, and borate mineral mining climbed at faster rates in May than they had a month earlier. By contrast, the index for the oil and gas well drilling industry moved up 2.4 percent in May compared with a 6.5-percent advance in the prior month. Prices received by the industry for crude petroleum and natural gas extraction also rose less than they had in April. The industry indexes for bituminous coal and lignite surface mining, bituminous coal underground mining, oil and gas operations support activities, and for crushed and broken granite mining and quarrying turned down after increasing in the preceding month. Prices received by the industry for iron ore mining were unchanged after rising a month earlier. The Producer Price Index for Total Mining Industries was 212.0 in May (December 1984 = 100), 19.2 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries advanced 0.9 percent in May after increasing 1.4 percent in April. Prices received by petroleum and coal products manufacturers rose 4.3 percent following a 12.0-percent jump in the previous month. After inching up in April, prices received by producers of transportation equipment turned down in May. Alternatively, prices received by food manufacturers rose 0.6 percent following a decrease of 0.6 percent in April. The industry group index for chemical manufacturing also turned up after declining in the prior month. Prices received by manufacturers of primary metals, electrical equipment and appliances, and paper advanced at faster rates in May than they had in the preceding month. The industry group indexes for machinery manufacturing and for computer and electronic products manufacturing, which were unchanged in April, moved up in May. The Producer Price Index for Total Manufacturing Industries was 158.5 in May (December 1984 = 100), 6.1 percent above its year-ago level.

Services. Among services industries, the index for commercial banking declined 2.2 percent in May compared with a 12.5-percent gain in April. Prices received by the industries for portfolio management, cellular and other wireless carriers, lessors of nonresidential buildings (except miniwarehouses), offices of certified public accountants, and for investment banking and securities dealing also decreased after rising in the previous month. By contrast, the index for the scheduled passenger air transportation industry fell 0.4 percent in May after declining 2.3 percent in the preceding month. Prices received by the industry for engineering services climbed more in May than they had in April.