July 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 moved up 0.1 percent in July, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.5-percent advance in June and a 0.2-percent rise in May. Prices for finished goods other than foods and energy decreased 0.3 percent in July after moving up 0.2 percent in the previous month. At the earlier stages of processing, prices received by manufacturers of intermediate goods advanced 0.5 percent compared with a 0.7-percent gain in June. The index for crude materials climbed 3.1 percent after declining 1.7 percent in the prior month. (See table A.)

In July, a 1.3-percent increase for finished energy goods prices slightly outweighed declines of 0.3 percent for finished goods less foods and energy and for finished consumer foods.

Before seasonal adjustment, the Producer Price Index for Finished Goods rose 0.2 percent in July to 162.0 (1982 = 100). From July 2005 to July 2006, the finished goods index moved up 4.2 percent. Over the same period, prices for finished energy goods jumped 16.3 percent, the index for finished goods other than foods and energy increased 1.3 percent, and prices for finished consumer foods advanced 1.1 percent. For the 12-month period ended July 2006, the index for intermediate goods climbed 8.9 percent, and prices received by crude goods producers advanced 6.6 percent.

Finished goods

The finished energy goods index increased 1.3 percent in July compared with a 0.7-percent rise in June. Prices for residential electric power advanced 1.8 percent following a 2.8-percent decline in the previous month. The indexes for residential natural gas and lubricating grease also turned up after declining in June. Prices for liquefied petroleum gas rose more than they had a month earlier. By contrast, the gasoline index gained 0.7 percent after climbing 6.3 percent in June. Prices for home heating oil, diesel fuel, and kerosene turned down in July. (See table 2.)

The index for finished goods other than foods and energy declined 0.3 percent in July after edging up 0.2 percent a month earlier. Prices for light motor trucks decreased 3.1 percent compared with a 0.4-percent advance in June. The indexes for passenger cars, pharmaceutical preparations, civilian aircraft, mobile homes, newspaper circulation, railroad equipment, and for integrating and measuring instruments also turned down in July. Prices for men's and boys' apparel fell after remaining unchanged in June, and the index for alcoholic beverages advanced less than it had a month earlier. By contrast, tire prices increased 3.5 percent following no change in June. The indexes for women's, girls', and infants' apparel and for commercial furniture turned up in July, while prices for platinum and karat gold jewelry declined less than they had in the prior month.

The finished consumer foods index decreased 0.3 percent in July after rising 1.4 percent in June. The index for eggs for fresh use dropped 26.1 percent following a 27.7-percent climb a month earlier. Prices for fresh fruits and melons, finfish and shellfish, soft drinks, dairy products, processed fruits and vegetables, and for beef and veal also turned down in July after increasing in the prior month. The indexes for processed young chickens, confectionery end products, and pork rose less than in June. Conversely, prices for fresh and dry vegetables advanced 6.5 percent in July following a 7.5-percent decline in June.

Intermediate goods

The index for Intermediate Materials, Supplies, and Components increased 0.5 percent in July after advancing 0.7 percent in June. Prices for materials for nondurable manufacturing and for intermediate foods and feeds rose less than they had in June, while the index for intermediate energy goods turned down in July. By contrast, prices for materials for durable manufacturing and for materials and components for construction increased more in July than they had in the preceding month. The index for intermediate goods less foods and energy moved up 0.7 percent after rising 0.8 percent in June. (See table B.)

The materials for nondurable manufacturing index edged up 0.2 percent in July following a 1.0-percent gain in the preceding month. Prices for primary basic organic chemicals increased 2.2 percent after advancing 5.4 percent in June. The indexes for plastic resins and materials, paperboard, and synthetic fibers also rose less in July than they had in the prior month. Prices for intermediate basic organic chemicals, paper, and nitrogenates turned down following increases a month earlier. Conversely, the index for finished fabrics moved up 0.6 percent in July after decreasing 0.2 percent in June. Prices for phosphates also advanced following declines in the previous month. (See table 2.)

Prices for intermediate energy goods inched down 0.1 percent in July after rising 0.4 percent in the prior month. Diesel fuel prices dropped 5.0 percent following a 5.4-percent advance in June. The indexes for jet fuel, residual fuel, and home heating oil also turned down in July. Prices for gasoline increased less than they had in June. By contrast, the industrial natural gas index moved up 2.9 percent in July after declining 7.3 percent in June. Prices also turned up in July for commercial natural gas and natural gas to electric utilities. The index for liquefied petroleum gas rose more than it had in June.

The rate of increase in the index for intermediate foods and feeds slowed from 1.0 percent in June to 0.4 percent in July. Prices for processed young chickens rose 1.9 percent following a 12.1-percent jump in June. The index for pork also advanced less in July than it had a month earlier. Prices for natural, processed, and imitation cheese and for beef and veal turned down after increasing in June. Alternatively, the index for fluid milk products moved up 1.1 percent in July following a 0.3- percent decline in the preceding month. Prices for flour and for refined sugar and byproducts advanced more than they had in June. The prepared animal feeds index increased after remaining unchanged in the previous month.

Prices for materials for durable manufacturing advanced 2.3 percent in July following a 1.1-percent gain in the prior month. The index for primary nonferrous metals jumped 11.4 percent after falling 3.5 percent in June. Prices for copper and brass mill shapes and for plywood also turned up in July. The indexes for softwood lumber and for building paper and board decreased less than they had in the previous month. By contrast, prices for aluminum mill shapes fell 2.3 percent after rising 2.4 percent in June. The index for secondary aluminum also turned down in July following a gain in the previous month. Prices for semifinished steel mill products, cold finished steel bars, and unprocessed filament yarns increased less than they had in June.

Prices for materials and components for construction increased 0.7 percent in July after climbing 0.3 percent in June. The index for concrete products advanced 1.4 percent following a 0.2-percent gain in the prior month. Softwood lumber prices declined less in July than they had a month earlier. The indexes for plastic construction products, plumbing fixtures and brass fittings, and plywood turned up after falling in the preceding month. Alternatively, prices for wiring devices climbed 0.2 percent in July following a 1.4-percent increase in June. The index for air conditioning and refrigeration equipment also rose less than it had in the preceding month, and prices for nonferrous wire and cable fell more than in June.

Crude goods

The Producer Price Index for Crude Materials for Further Processing increased 3.1 percent in July following a 1.7-percent decrease in June. Prices for crude energy materials rose after falling in the previous month. By contrast, the indexes for crude foodstuffs and feedstuffs and for crude nonfood materials less energy advanced less in July than they had in the preceding month. (See table B.)

The index for crude energy materials turned up 4.8 percent after decreasing 6.8 percent in June. Leading this upturn, the natural gas index rose 1.2 percent following a 10.8-percent drop in the prior month. Crude petroleum prices moved up 9.4 percent in July after a 3.7-percent decline a month earlier. The index for coal increased 0.6 percent following no change in the preceding month. (See table 2.)

Price increases for crude foodstuffs and feedstuffs slowed from 4.8 percent in June to 1.8 percent in July. The index for slaughter broilers and fryers advanced 6.4 percent following a 14.7-percent increase in the previous month. Prices for slaughter cattle also rose less in July than they had a month earlier, while the indexes for slaughter hogs, fluid milk, and for fresh fruits and melons fell after increasing in June. Conversely, corn prices climbed 8.0 percent following a 1.2-percent decline in June. The indexes for wheat, fresh vegetables (except potatoes), and soybeans also rose in July after falling in the prior month.

The crude nonfood materials less energy index increased 1.3 percent following a 1.7-percent advance in the preceding month. In July, rising prices for wastepaper; construction sand, gravel, and crushed stone; gold ores; and miscellaneous metal ore mining outweighed falling prices for iron and steel scrap, copper base scrap, aluminum base scrap, and raw cotton.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries increased 5.0 percent in July after decreasing 4.4 percent in June. (Net output price indexes are not seasonally adjusted.) Leading this upturn, prices received by the industry for crude petroleum and natural gas extraction jumped 5.3 percent following a 6.5-percent drop in the previous month. Also advancing in July following declines a month earlier were the industry indexes for natural gas liquid extraction, gold ore mining, oil and gas well drilling services, bituminous coal underground mining, and crushed and broken granite mining and quarrying. Alternatively, prices received by the industry for miscellaneous metal ore mining rose 3.9 percent after climbing 7.0 percent in June. The index for oil and gas operations support activities also moved up at a slower rate than it had in the preceding month. In July, the Producer Price Index for Total Mining Industries was 212.9 (December 1984 = 100), 10.1 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries inched up 0.1 percent in July after increasing 0.6 percent in June. Prices received by producers of petroleum and coal products edged up 0.1 percent following a 3.0-percent gain in the previous month. The industry group indexes for foods, paper, and machinery manufacturing also advanced less in July than they had in the previous month. Prices received by producers of transportation equipment moved down in July after registering no change in June. The indexes for beverage and tobacco manufacturing, as well as printing and related support activities, turned down after climbing in the prior month. Conversely, prices received by the plastics and rubber products industry group rose 0.6 percent in July compared with a 0.6-percent decline in June. The industry group index for medical equipment and supplies manufacturing also turned up after falling in the preceding month, while prices received by wood products manufacturers decreased less than they had in June. In July, the Producer Price Index for Total Manufacturing Industries was 159.7 (December 1984 = 100), 5.8 percent above its year-ago level.

Services. Among services industries, prices received by commercial bankers fell 3.6 percent in July following a 5.8-percent jump in June. The industry indexes for portfolio management, television broadcasting, software publishers, and lessors of nonresidential buildings (excluding miniwarehouses) also moved down in July after rising a month earlier. Prices received by the scheduled passenger air transportation industry and savings institutions increased at slower rates than they had in June. By contrast, the index for general medical and surgical hospitals climbed 0.8 percent in July after moving up 0.1 percent in the prior month. Prices received by the industries for investment banking and securities dealing and for specialty hospitals (except psychiatric and substance abuse) also advanced more in July than they had in the previous month.

Resampling of Industries

Effective with this release, the Producer Price Index (PPI) includes data for 65 resampled and 3 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 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

212321 Construction sand and gravel mining 212322 Industrial sand mining 212393 Other chemical and fertilizer mineral mining 213112 Support activities for oil and gas operations 213113 Support activities for coal mining 236222 New school construction* 311320 Chocolate and confectionery-type products made from cacao beans 311330 Confectionery manufacturing from purchased chocolate 311340 Nonchocolate confectionery manufacturing 311423 Dried and dehydrated food manufacturing 311712 Fresh and frozen seafood processing 311812 Commercial bakeries 311822 Flour mixes and dough manufacturing from purchased flour 312130 Wineries 313320 Fabric coating mills 315233 Women's and girls' dress manufacturing 315234 Women's and girls' suit, coat, jacket, and skirt manufacturing 316991 Luggage manufacturing 316992 Women's handbags and purses 316993 Other personal leather good manufacturing 322110 Pulp mills 322221 Coated and laminated packaging materials manufacturing 324122 Asphalt shingle and coating materials manufacturing 325413 In-vitro diagnostic substance manufacturing 325520 Adhesive manufacturing 325613 Surface active agent manufacturing 326140 Polystyrene foam product manufacturing 326192 Resilient floor coverings 326299 All other rubber product manufacturing 327999 Miscellaneous nonmetallic mineral products 332212 Hand and edge tools 332213 Saw blade and handsaw manufacturing 332811 Metal heat treating 332997 Industrial pattern manufacturing 333414 Heating equipment (except warm air furnaces) manufacturing 333518 Other metalworking machinery manufacturing 333993 Packaging machinery manufacturing 333996 Fluid power pump and motor manufacturing 334112 Computer storage device manufacturing

Resampling of Industries-Continued

334418 Printed circuit assembly (electronic assembly) manufacturing 334419 Other electronic component manufacturing 334511 Search, detection, and navigation instrument manufacturing 334515 Electricity measuring and testing instrument manufacturing 334519 Other measuring and controlling device manufacturing 335211 Electric housewares and fan manufacturing 335312 Motor and generator manufacturing 335931 Current-carrying wiring device manufacturing 336213 Motor home manufacturing 336214 Travel trailer and camper manufacturing 336370 Motor vehicle metal stamping 336391 Motor vehicle air conditioning manufacturing 336991 Motorcycles, bicycles, and parts manufacturing 337215 Showcase, partition, shelving, and locker manufacturing 429930 Material recyclers 446191 Food (health) supplement stores 454110 Electronic shopping and mail-order houses 488310 Port and harbor operations 493120 Refrigerated warehousing and storage 511210 Software publishers 517211 Paging 523110 Investment banking and securities dealing 523120 Securities brokerage 524113 Direct life insurance carriers 621511 Medical laboratories 621512 Diagnostic imaging centers 623210 Residential mental retardation facilities 713110 Amusement and theme parks* 713910 Golf courses and country clubs*

* For further discussion of these newly introduced PPIs, see the July 2006 issue of the PPI Detailed Report, visit (www.bls.gov/ppi), or call the Section of Index Analysis and Public Information at (202) 691-7705.