June 2007 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 decreased 0.2 percent in

June, seasonally adjusted, the Bureau of Labor Statistics of the U.S.

Department of Labor reported today. This decline followed advances of 0.9

percent in May and 0.7 percent in April. At the earlier stages of processing, prices received by producers of intermediate goods rose 0.5

percent in June after increasing 1.1 percent in the prior month, and the crude goods index moved up 0.3 percent following a 2.0-percent advance in

May. (See table A.)

indexes, seasonally adjusted

| | | | |

| | Finished goods | | |

| | | | |

| |---------------------------------------------------------| | |

| | | | | | Change in | | |

| | | | | Except |finished goods| Inter- | |

| | | | |foods and|from 12 months| mediate | Crude |

| Month | Total | Foods | Energy | energy | ago(unadj.) | goods | goods |

|--------------------------------------------------------------------------------------|

Aug. .4 1.2 -.5 .4 3.8 .4 2.6

Sept. -1.1 .4 -5.9 .3 .9 -1.3 -3.8

Oct. -1.5 -.4 -5.8 -.4 -1.2 -1.2 -9.2

Nov. 1.6 .1 5.4 .9 .9 .6 11.7

Dec. .7 1.1 2.4 .1 1.1 .9 2.6

Jan. -.6 1.0 -4.3 .2 .1 -.7 -5.5

Feb. r 1.2 r 1.7 r 3.0 .4 r 2.4 r .8 r 9.0

Mar. 1.0 r 1.7 3.6 0 3.2 r 1.3 r 4.8

Apr. .7 .4 3.4 0 3.2 .9 -1.5

from those previously reported because data for February 2007 have been revised to reflect the availability of late reports and corrections by respondents.

Among prices for finished goods, the index for energy goods fell 1.1

percent in June after rising 4.1 percent in May. Prices for consumer foods decreased 0.8 percent following a 0.2-percent decline in the previous month. By contrast, slightly counteracting the downturn in finished goods prices, the index for finished goods other than foods and energy increased

0.3 percent in June compared with a 0.2-percent rise in May.

During the first 6 months of 2007, the finished goods index rose at a

6.4-percent seasonally adjusted annual rate (SAAR) after no change during

the latter half of 2006. Prices for finished energy goods climbed at an percent SAAR for the 6 months ended December 2006. The index for finished consumer foods moved up at a 7.8-percent SAAR during the first half of 2007

after increasing at a 4.9-percent SAAR during the second half of 2006.

Prices for finished goods other than foods and energy advanced at a 2.3-

percent SAAR for the 6 months ended June 2007 after rising at a 1.3-percent

SAAR during the prior 6-month period. At the earlier stages of processing, the intermediate goods index increased at an 8.0-percent SAAR from December

2006 to June 2007 after falling at a 1.0-percent SAAR during the latter half of 2006, and prices for crude goods advanced at an 18.6-percent SAAR

for the 6 months ended in June after moving up at an 11.3-percent SAAR for the 6 months ended in December. (See summary table below.)

Summary of December-to-December, 6-month, and 3-month seasonally adjusted annual rates of

change in price indexes for selected stages of processing

| | Percentage | |

| | change 12 |Seasonally adjusted annual rate for|

| | months ended | |

| Grouping | December | |

| |--------------------|-----------------------------------|

| | | | |6 months|6 months|3 months|3 months|

| | 2004 | 2005 | 2006 | ended | ended | ended | ended |

| | | | | Dec. | June | Mar. | June |

| | | | | 2006 | 2007 | 2007 | 2007 |

|-----------------------------------------------------------------------------------------|

Finished goods less foods

Finished consumer goods,

Intermediate materials,

Intermediate materials less

Materials for

Materials for

Materials and components

Crude materials for further

Crude nonfood materials less

after original publication. In addition, seasonally adjusted indexes may be revised for 5

years, due to the recalculation of seasonal factors each January.

Before seasonal adjustment, the Producer Price Index for Finished

Goods fell 0.4 percent in June to 167.1 (1982 = 100). From June 2006 to

June 2007, prices for finished goods increased 3.3 percent. Over the same period, the index for finished consumer foods rose 6.5 percent, prices for finished energy goods climbed 4.7 percent, and the index for finished goods other than foods and energy advanced 1.8 percent. For the 12 months ended

June 2007, prices received by intermediate goods producers moved up 3.7

percent, and the crude goods index increased 14.8 percent.

Finished goods

Prices for finished energy goods declined 1.1 percent in June after

increasing 4.1 percent in May. The gasoline index fell 3.9 percent

following a 10.2-percent jump in the previous month. Prices for liquefied

petroleum gas, residential electric power, home heating oil, and finished

lubricants also turned down after rising in May. By contrast, slightly

counteracting the downturn in the finished energy goods index, residential

natural gas prices advanced 2.6 percent in June following a 0.9-percent

increase a month earlier. The index for diesel fuel turned up after decreasing in May. (See table 2.)

Prices for finished consumer foods fell 0.8 percent in June following

a 0.2-percent decrease in May. The index for fresh fruits and melons declined 14.9 percent after climbing 12.1 percent in the preceding month.

Prices for eggs for fresh use, beef and veal, pork, processed fruits and vegetables, and soft drinks also turned down following increases in May.

The index for processed young chickens decreased more in June than it had in the prior month. By contrast, prices for fresh and dry vegetables rose

0.2 percent following a 35.0-percent drop a month earlier. The index for dairy products advanced more in June than it had in May.

intermediate goods and crude goods, seasonally adjusted

| | | |

| | Intermediate goods | Crude goods |

| | | |

| |---------------------------------------------------------------------------|

| | | | |Change in | | | | Change |

| | | | | interme- | | | |in crude |

| | | | | diate | | | | goods |

| | | | |goods from| | | | from 12 |

| | | | Except |12 months | | | Except | months |

| | | |foods and| ago | | |foods and| ago |

|Month | Foods | Energy | energy | (unadj.) | Foods | Energy | energy |(unadj.) |

|----------------------------------------------------------------------------------|

Aug. -.4 .4 .4 8.8 .3 6.9 -3.4 5.1

Sept. .6 -6.0 0 4.7 1.8 -9.2 1.4 -8.2

Oct. .4 -5.9 -.1 .2 2.7 -20.1 -2.7 -21.1

Nov. 2.4 4.3 -.4 2.1 2.5 26.5 -.6 -10.5

Dec. 1.2 3.9 .1 2.8 -.1 4.8 1.7 -4.7

Jan. 1.8 -3.7 0 1.1 2.4 -15.3 1.8 -9.5

Feb. r 3.0 r 3.5 r 0 r 2.2 r 7.4 r 14.3 r 2.9 r 7.7

Mar. r 2.3 r 3.7 r .6 3.5 r 2.2 r 5.4 r 7.1 15.6

Apr. .5 1.3 .8 3.7 1.3 -4.9 .4 11.1

differ from those previously reported because data for February 2007 have been revised to reflect the availability of late reports and corrections by respondents.

The index for finished goods other than foods and energy increased 0.3

percent in June following a 0.2-percent advance in May. Higher prices for light motor trucks, passenger cars, sanitary papers and health products, civilian aircraft, household furniture, and alcoholic beverages outweighed lower prices for electronic computers, commercial furniture, pharmaceutical preparations, and cosmetics and other toilet preparations.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and

Components rose 0.5 percent in June following a 1.1-percent advance in the prior month. Prices for intermediate energy goods and materials for nondurable manufacturing increased less than they had in May. Conversely, partially offsetting the deceleration in intermediate goods prices, the indexes for intermediate foods and feeds, materials and components for construction, and materials for durable manufacturing rose more than in the previous month. Prices for intermediate goods other than foods and energy moved up 0.4 percent for the second consecutive month. (See table B.)

The index for intermediate energy goods rose 0.3 percent in June after jumping 4.2 percent in May. The index for residual fuel increased 0.6

percent in June after climbing 7.8 percent a month earlier. Prices for gasoline, industrial electric power, jet fuels, and liquefied petroleum gas turned down after advancing in May. By contrast, the rise in the index for natural gas to electric utilities accelerated to 7.8 percent from 1.4

percent in the previous month. Prices for commercial natural gas also

increased more in June, and the index for diesel fuel turned up after declining in May. (See table 2.) From December 2006 to June 2007, the index for intermediate energy goods advanced at a 19.8-percent SAAR after dropping at a 9.4-percent SAAR in the previous 6-month period.

The index for materials for nondurable manufacturing moved up 1.8

percent in June after advancing 2.9 percent in the prior month. The increase in the index for primary basic organic chemicals slowed to 2.7

percent from 4.6 percent in May. Prices for plastic resins and materials and for intermediate basic organic chemicals also rose less than in the preceding month. Conversely, the increase in the fertilizer materials index accelerated to 4.8 percent in June from 0.5 percent a month earlier.

Prices for basic inorganic chemicals also increased more than in the

preceding month. The indexes for paper, processed yarns and threads, and

synthetic rubber turned up after falling in May. The index for materials for nondurable manufacturing rose at a 15.4-percent SAAR during the first half of 2007 after declining at a 5.9-percent SAAR in the second half of

Prices for intermediate foods and feeds moved up 1.6 percent in June after increasing 0.1 percent in the prior month. The index for prepared animal feeds turned up 2.2 percent after dropping 3.1 percent in May.

Prices for flour, fluid milk products, and for natural, processed, and

imitation cheese rose more than in the previous month. By contrast, the index for beef and veal turned down 3.3 percent after advancing 1.0 percent in the prior month. Prices for pork also decreased after rising in May.

The index for shortening and cooking oils increased less in June, and prices for processed young chickens fell more than in May. During the first half of 2007, the index for intermediate foods and feeds rose at a

20.3-percent SAAR after advancing at a 10.6-percent SAAR in the second half of 2006.

The index for materials and components for construction moved up 0.4

percent in June after advancing 0.3 percent a month earlier. Price

increases for nonferrous wire and cable, plywood, asphalt felts and

coatings, wiring devices, softwood lumber, treated wood, and concrete

products outweighed price decreases for plastic construction products.

From December 2006 to June 2007, prices for materials and components for construction moved up at a 3.5-percent SAAR after advancing at a 1.0-

percent SAAR from June to December 2006.

The index for materials for durable manufacturing increased 0.3

percent in June after moving up 0.2 percent in the prior month. Rising prices for copper and brass mill shapes, cold rolled steel sheet and strip, semifinished steel mill products, plywood, softwood lumber, and secondary aluminum more than offset falling prices for aluminum mill shapes and cold finished steel bars. The index for materials for durable manufacturing climbed at an 11.1-percent SAAR in the first half of 2007 after rising at a

2.0-percent SAAR in the prior 6-month period.

Crude goods

The Producer Price Index for Crude Materials for Further Processing

moved up 0.3 percent in June following a 2.0-percent increase in May.

Prices for crude energy materials and for crude foodstuffs and feedstuffs

rose less than they had in May. The index for basic industrial materials turned down after edging up in the prior month. (See table B.)

Prices for crude energy materials moved up 0.6 percent in June

subsequent to a 4.3-percent increase a month earlier. In June, rising

prices for crude petroleum and coal outweighed falling prices for natural

gas. (See table 2.) During the first half of 2007, the crude energy materials index advanced at a 3.5-percent SAAR after rising at a 13.7-

percent SAAR in the previous 6-month period.

The crude foodstuffs and feedstuffs index advanced 0.5 percent

following a 1.1-percent increase in May. In June, higher prices for fluid milk, corn, wheat, soybeans, slaughter hogs, and slaughter turkeys outweighed lower prices for slaughter cattle, slaughter broilers and fryers, fresh fruit and melons, and unprocessed finfish. The index for crude foodstuffs and feedstuffs increased at a 33.9-percent SAAR in the first half of 2007 subsequent to rising at a 20.7-percent SAAR in the second half of 2006.

Prices for crude nonfood materials less energy inched down 0.2 percent

in June after edging up 0.1 percent in the preceding month. The copper base scrap index declined 6.6 percent following a 10.3-percent gain in May.

Similarly, prices for wastepaper and pulpwood also turned down in June.

The indexes for aluminum base scrap and for construction sand, gravel, and crushed stone were unchanged after increasing in the previous month.

Prices for gold ores fell more than they had a month earlier. By contrast, partially offsetting the downturn in the basic industrial materials index, prices for iron and steel scrap advanced 1.4 percent in June subsequent to an 8.3-percent decrease in the prior month. The indexes for phosphates and for hardwood logs, bolts, and timber also turned up in June. Prices for raw cotton declined less than they had in May. From December 2006 to June

2007, the index for basic industrial materials increased at a 26.5-percent

SAAR after decreasing at a 4.2-percent SAAR in the prior 6-month period.

Net output price indexes

Mining, Utilities, and Manufacturing Industries. The Producer Price Index

for the Net Output of Total Mining, Utilities, and Manufacturing Industries

advanced 0.2 percent in June following a 1.2-percent rise in May. (Net output price indexes are not seasonally adjusted.) In June, prices received by electric power distributors increased 3.3 percent. The industry indexes for electric power generation; natural gas distribution;

mining support activities; as well as, food, chemical, and electrical

equipment and appliance manufacturing also moved up in June. By contrast,

prices received by petroleum and coal products manufacturers fell 3.1

percent in June. The industry indexes for printing and related support

activities and for beverage and tobacco manufacturing also declined in

June.

Trade Industries. The Producer Price Index for the Net Output of Total

Trade Industries decreased 1.2 percent in June after climbing 2.0 percent

in May. (Trade indexes measure changes in margins received by wholesalers

and retailers.) Margins received by gasoline stations dropped 8.4 percent

in June compared with a 43.3-percent jump in the prior month. The margin indexes for merchant wholesalers of both durable and nondurable goods, grocery stores, health and personal care stores, and florists also turned down following advances in May. Margins received by building materials and supplies dealers rose less in June than they had a month earlier. By contrast, partially counteracting the downturn in the trade industries index, margins received by shoe stores increased 18.6 percent following a

15.2-percent decline in May. The margin indexes for department stores,

wholesale trade agents and brokers, and recreational vehicle dealers also

moved up in June after falling in the previous month.

Transportation and Warehousing Industries. The Producer Price Index for

the Net Output of Total Transportation and Warehousing Industries advanced

0.8 percent in June after inching down 0.1 percent in May. Prices received by the industry for scheduled passenger air transportation rose 4.5 percent in June following an 8.4-percent decrease in the preceding month. Prices received by the industries for line-haul railroad transportation, inland water freight transportation, and courier services increased more in June than they had a month earlier. The index for long-distance general freight trucking (by the truckload) was unchanged following a decline in May.

Conversely, prices received by the United States Postal Service were

unchanged in June after rising 6.5 percent in the prior month. The indexes for scheduled freight air transportation, long distance general freight trucking (less than truckload), and local general freight trucking turned down after advancing in May.

Traditional Service Industries. The Producer Price Index for the Net

Output of Total Traditional Service Industries climbed 0.7 percent in June

following a 0.3-percent decline in May. Prices received by the commercial

banking industry jumped 4.7 percent in June after falling 3.8 percent a month earlier. The indexes for savings institutions, lessors of nonresidential buildings (except miniwarehouses), offices of real estate agents and brokers, and passenger car rental also turned up following decreases in May. Prices received by non-casino hotels and motels moved up more in June than they had in the previous month. The indexes for wired telecommunications carriers and general medical and surgical hospitals rose after no change in May. By contrast, prices received by cellular and other wireless carriers declined 2.2 percent in June after increasing 3.0 percent in the preceding month. The indexes for management consulting services and offices of lawyers also turned down following advances in May.

Tuesday, August 14, 2007 at 8:30 a.m. (EDT).