February 2007 Producer Price Index

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The Producer Price Index for Finished Goods advanced 1.3 percent in February, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.6-percent decline in January and a 0.9-percent rise in December. At the earlier stages of processing, the intermediate goods index turned up 1.1 percent after falling 0.7 percent in the previous month, and prices for crude goods climbed 8.9 percent following a 6.3-percent decrease in January. (See table A.)

2007 Jan. -.6 1.1 -4.6 .2 .2 -.7 -6.3 Feb. 1.3 1.9 3.5 .4 2.5 1.1 8.9 r=revised. Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for October 2006 have been revised to reflect the availability of late reports and corrections by respondents.

Among finished goods in February, the index for energy goods moved up 3.5 percent compared with a 4.6-percent drop a month earlier. The rate of increase for consumer foods prices accelerated to 1.9 percent in February from 1.1 percent in January. Excluding prices for foods and energy, the finished goods index moved up 0.4 percent in February after a 0.2-percent advance in the previous month.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 1.1 percent in February to 162.0 (1982 = 100). From February 2006 to February 2007, prices for finished goods rose 2.5 percent. Over the same period, the finished consumer foods index jumped 6.8 percent, prices for finished goods other than foods and energy increased 1.8 percent, and the index for finished energy goods was unchanged. For the 12 months ended February 2007, prices for intermediate goods moved up 2.5 percent, and the crude goods index rose 9.3 percent.

Finished goods

The finished energy goods index climbed 3.5 percent in February after falling 4.6 percent in the preceding month. Gasoline prices rose 5.3 percent following a 13.0-percent drop in January. The indexes for residential natural gas, liquefied petroleum gas, home heating oil, diesel fuel, and kerosene also turned up in February. Prices for residential electric power increased more than they had a month earlier. By contrast, the index for lubricating grease fell 2.9 percent compared with a 2.7- percent increase in January. (See table 2.)

2007 Jan. 1.9 -3.8 0 .9 2.1 -16.2 1.6 -8.0 Feb. 2.6 4.5 .2 2.5 7.4 13.7 2.7 9.3 r=revised. Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for October 2006 have been revised to reflect the availability of late reports and corrections by respondents.

Prices for finished consumer foods advanced 1.9 percent in February following a 1.1-percent gain in the previous month. Leading this acceleration, the fresh fruits and melons index jumped 15.7 percent after decreasing 13.4 percent in January. Prices for fresh and dry vegetables also turned up in February following declines a month earlier. The indexes for pork, beef and veal, and confectionery end products rose more in February than they had in the preceding month. Alternatively, prices for finfish and shellfish moved up 0.3 percent in February after climbing 8.1 percent in the prior month. The index for processed young chickens also rose less than it had in January. Prices for processed fruits and vegetables turned down in February after increasing a month earlier, and the index for soft drinks fell more than in January.

Subsequent to a 0.2-percent increase in January, the index for finished consumer goods excluding foods and energy advanced 0.5 percent in February. Cigarette prices climbed 4.6 percent after rising 1.8 percent in the preceding month. The indexes for light motor trucks and alcoholic beverages turned up following declines in January. Pet food prices rose more in February than they had a month earlier. Conversely, the passenger cars index fell 1.2 percent following a 0.1-percent decline in the prior month. Prices for pharmaceutical preparations and for women's, girls', and infants' apparel rose less than they had in January. The indexes for book publishing and floor coverings turned down in February after increasing in the previous month.

Capital equipment prices advanced 0.3 percent following a 0.2-percent increase in January. In February, rising prices for light motor trucks; commercial furniture; pumps, compressors, and equipment; communication and related equipment; construction machinery and equipment; and ships outweighed falling prices for passenger cars; x-ray and electromedical equipment; electronic computers; and railroad equipment.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 1.1 percent in February following a 0.7-percent decline in January. Prices for intermediate energy goods, as well as the indexes for both durable and nondurable manufacturing materials, increased after falling in January. The index for intermediate foods and feeds rose more than it had a month earlier. Conversely, prices for materials and components for construction advanced less than they had in January. Excluding foods and energy, prices for intermediate goods edged up 0.2 percent after remaining unchanged in January. (See table B.)

The index for intermediate energy goods increased 4.5 percent in February compared with a 3.8-percent decline a month earlier. Prices for diesel fuel rose 9.2 percent after declining 13.2 percent in January. Similarly, the indexes for gasoline, natural gas to electric utilities, jet fuel, residual fuel, liquefied petroleum gas, and commercial natural gas also turned up in February. Prices for industrial electric power advanced more than they had in the prior month. (See table 2.)

After edging down 0.1 percent in January, the index for materials for nondurable manufacturing moved up 0.7 percent in February. The primary basic organic chemicals index increased 3.2 percent following a 2.9-percent decline in the previous month. Prices for finished fabrics also turned up in February. The index for fertilizer materials rose more than it had in January, and paper prices fell less in February compared with the prior month. By contrast, the index for inedible fats and oils decreased 9.6 percent in February subsequent to a 5.5-percent decline a month earlier. Prices for basic inorganic chemicals also declined more than in the prior month. The indexes for paint materials and ethanol turned down in February after rising a month earlier.

The index for materials for durable manufacturing increased 0.3 percent in February following a 0.6-percent decrease in the previous month. Leading this reversal, prices for steel mill products rose 1.4 percent after inching down 0.2 percent in January. The index for primary nonferrous metals also turned up in February, while prices for unprocessed filament yarns fell less than they had in January. By contrast, the index for softwood lumber increased 0.8 percent in February subsequent to a 5.7- percent gain in January. Prices for aluminum mill shapes also advanced less than they had a month earlier. The indexes for building paper and board and for hardwood lumber turned down in February. Prices for cement fell more than in January.

Prices for intermediate foods and feeds advanced 2.6 percent in February after increasing 1.9 percent in January. The prepared animal feeds index climbed 4.8 percent following a 1.2-percent advance a month earlier. Prices for pork and for beef and veal also rose more than they had in the prior month. The flour index declined less than it had in January. Alternatively, prices for confectionary materials advanced 0.3 percent subsequent to a 12.5-percent rise in the preceding month. The indexes for fluid milk products and processed young chickens also increased less compared with the preceding month. Prices for refined sugar and byproducts turned down in January.

The index for materials and components for construction edged up 0.1 percent following a 0.2-percent increase in January. In February, rising prices for steel mill products, plumbing fixtures and brass fittings, concrete products, heating equipment, and plastic construction products outweighed price declines for nonferrous wire and cable, treated wood, gypsum products, asphalt felts and coatings, and prefabricated wood buildings and components.

Crude goods

The Producer Price Index for Crude Materials for Further Processing increased 8.9 percent in February following a 6.3-percent decline in January. Prices for crude energy materials turned up after decreasing in the previous month. The indexes for crude foodstuffs and feedstuffs and for basic industrial materials advanced more than they had a month earlier. (See table B.)

The crude energy materials index rose 13.7 percent in February after falling 16.2 percent in the prior month. Natural gas prices jumped 21.1 percent compared with a 22.4-percent drop a month earlier. The index for crude petroleum advanced 6.4 percent after declining 9.2 percent in the preceding month. Coal prices turned up 1.8 percent following a 2.4-percent decrease in January. (See table 2.)

Prices for crude foodstuffs and feedstuffs increased 7.4 percent in February subsequent to a 2.1-percent advance a month earlier. The corn index jumped 16.2 percent after declining 1.3 percent in January. Prices for slaughter hogs, soybeans, fresh fruits and melons, wheat, and for fresh and dry vegetables also turned up following declines in the previous month. By contrast, fluid milk prices gained 4.3 percent in February subsequent to a 5.1-percent increase a month earlier. The indexes for slaughter broilers and fryers and for unprocessed finfish also rose less than they had in the prior month.

The basic industrial materials index advanced 2.7 percent after increasing 1.6 percent in January. The gold ores index turned up 9.2 percent following a 3.7-percent decline in the preceding month. Prices for both copper and aluminum base scrap fell less in February than they had in the previous month. The indexes for wastepaper; construction sand, gravel, and crushed stone; and phosphates rose more than they had a month earlier. By contrast, price increases for iron and steel scrap slowed to 9.1 percent in February from 11.8 percent in January. The raw cotton index turned down after advancing in the prior month.

Net output price indexes

Mining, Utilities, and Manufacturing Industries. The Producer Price Index for the Net Output of Total Mining, Utilities, and Manufacturing Industries increased 1.3 percent in February following a 0.6-percent decline in January. (Net output price indexes are not seasonally adjusted.) Leading this reversal, prices received by petroleum and coal products manufacturers jumped 4.4 percent in February after dropping 6.4 percent a month earlier. The industry indexes for electric power generation, distribution, and transmission; oil and gas extraction; natural gas distribution; mining support activities; and gold ore mining also turned up following decreases in January. Prices received by the industry group for food manufacturing rose more in February than they had in the previous month. Conversely, the index for transportation equipment manufacturing edged up 0.1 percent after climbing 0.3 percent in January. Prices received by the manufacturing industry groups for printing and related support activities and for wood products fell in February following advances in the preceding month.

Trade Industries. The Producer Price Index for the Net Output of Total Trade Industries declined 0.3 percent in February compared with a 1.4- percent increase in January. (Trade indexes measure changes in margins received by wholesalers and retailers.) Most of this downturn can be traced to margins received by gasoline stations, which dropped 24.8 percent in February following a 44.2-percent jump in the prior month. The margin indexes for merchant wholesalers of durable goods, grocery stores, shoe stores, and automobile dealers also fell after rising in January. Conversely, margins received by merchant wholesalers of nondurable goods advanced 4.1 percent in February following a 0.9-percent decrease a month earlier. The margin indexes for department stores and for electronic shopping and mail order houses also turned up after declining in January. Margins received by miscellaneous general merchandise stores and by electronics and appliances stores fell less in February than they had in the previous month.

Transportation and Warehousing Industries. The Producer Price Index for the Net Output of Transportation and Warehousing Industries decreased 0.5 percent in February following a 2.3-percent increase in January. Prices received by the air transportation industry group moved down 2.6 percent in February after climbing 9.5 percent in the preceding month. The industry group indexes for general freight trucking, local specialized freight trucking of new goods, and general warehousing and storage also fell following advances in January. Prices received by the courier industry rose at a slower rate than in January. By contrast, prices received by the industry for inland water freight transportation increased 1.1 percent in February compared with a 5.0-percent drop a month earlier. The industry index for line haul railroads moved up following no change in January, while prices received by the industry for pipeline transportation of crude oil were unchanged in February after falling in the prior month. The index for coastal and Great Lakes freight transportation advanced more than it had in January.

Traditional Services Industries. The Producer Price Index for the Net Output of Total Traditional Services Industries rose 0.3 percent in February following a 0.6-percent increase in January. Prices received by offices of lawyers edged up 0.1 percent in February after climbing 2.7 percent a month earlier. The industry indexes for commercial banking, portfolio management, direct health and medical insurance carriers, and engineering services also moved up less than they had in January. Prices received by general medical and surgical hospitals, lessors of nonresidential buildings, and cellular and other wireless carriers fell in February following advances in the previous month. By contrast, the index for offices of physicians (excluding mental health) rose 3.0 percent after increasing 1.3 percent in January. Prices received by the industry for investment banking and securities dealing turned up in February, while the index for non-casino hotels and motels declined less than it had in January.