July 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 advanced 0.6 percent in July, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 0.2-percent decline in June and a 0.9-percent rise in May. At the earlier stages of processing, prices received by manufacturers of intermediate goods rose 0.6 percent in July compared with a 0.5-percent gain in June, and the index for crude materials climbed 1.2 percent subsequent to a 0.3-percent increase a month earlier. (See table A.)

Among prices for finished goods, the index for energy goods rose 2.5 percent in July following a 1.1-percent decrease in June. Prices for finished consumer foods inched down 0.1 percent after declining 0.8 percent in the previous month. By contrast, slightly counteracting the upturn in finished goods prices, the increase in the index for finished goods other than foods and energy slowed to 0.1 percent from 0.3 percent in June.

Before seasonal adjustment, the Producer Price Index for Finished Goods advanced 0.7 percent in July to 168.2 (1982 = 100). From July 2006 to July 2007, the finished goods index moved up 4.0 percent. Over the same period, prices for finished energy goods jumped 6.6 percent, the index for finished consumer foods rose 6.2 percent, and prices for finished goods other than foods and energy increased 2.3 percent. For the 12-month period ended in July, the index for intermediate goods advanced 4.1 percent, and prices received by crude goods producers climbed 13.1 percent.

Finished goods

The finished energy goods index increased 2.5 percent in July compared with a 1.1-percent decrease in June. Leading this upturn, prices for gasoline advanced 3.2 percent following a 3.9-percent decline in the previous month. The indexes for residential electric power and liquefied petroleum gas also turned up in July. Prices for diesel fuel and kerosene rose more than they had a month earlier. Conversely, slightly counteracting the upturn in finished energy goods prices, the index for lubricating and similar oils moved down 2.0 percent subsequent to a 0.3- percent decline in June. (See table 2.)

Prices for finished consumer foods edged down 0.1 percent in July after falling 0.8 percent in June. The index for fresh fruits and melons decreased 10.2 percent subsequent to a 14.9-percent decline a month earlier. Prices for eggs for fresh use, processed young chickens, soft drinks, and for finfish and shellfish turned up in July. The index for fresh and dry vegetables rose more than it had in the preceding month. Conversely, prices for beef and veal moved down 8.4 percent following a 3.3- percent decline in the prior month. The pork index also decreased at a faster rate compared with a month earlier. Prices for dairy products increased less than they had in June, while the canned meats index turned down in July.

The index for finished goods less foods and energy edged up 0.1 percent in July after increasing 0.3 percent a month earlier. Prices for passenger cars moved up 0.2 percent subsequent to a 1.4-percent gain in June. The indexes for alcoholic beverages, civilian aircraft, and household furniture turned down in July. Prices for sanitary papers and health products were unchanged after moving up in the previous month. By contrast, prices for pharmaceutical preparations increased 0.5 percent after inching down 0.1 percent in June. The indexes for commercial furniture, cosmetics and other toilet preparations, and tires also turned up in July. Prices for light motor trucks increased more than they had in June.

Intermediate goods

The index for Intermediate Materials, Supplies, and Components increased 0.6 percent in July after advancing 0.5 percent in June. Among prices for intermediate goods in July, increases for energy goods, materials for nondurable manufacturing, foods and feeds, and materials and components for construction outweighed decreases for materials for durable manufacturing. The index for intermediate goods less foods and energy moved up 0.2 percent after advancing 0.4 percent in June. (See table B.)

Prices for intermediate energy goods increased 2.0 percent in July after rising 0.3 percent in the prior month. The diesel fuel index moved up 6.8 percent following a 0.4-percent advance in June. Prices for residual fuel also rose more than they had in the previous month. The indexes for gasoline, jet fuels, and liquefied petroleum gas turned up in July. Prices for industrial electric power were unchanged after falling in June. By contrast, partially counteracting the acceleration in the intermediate energy goods index, prices for natural gas to electric utilities decreased 2.1 percent following a 7.8-percent advance in the preceding month. The indexes for both commercial and industrial natural gas and for commercial electric power also turned down in July. (See table 2.)

The materials for nondurable manufacturing index advanced 1.1 percent in July after climbing 1.8 percent a month earlier. Price increases for inedible fats and oils slowed to 2.1 percent from 7.4 percent in June. The indexes for fertilizer materials, processed yarns and threads, and gray fabrics also rose less than in the previous month. Prices for intermediate basic organic chemicals and finished fabrics turned down in July. The index for synthetic fibers fell following no change in June. By contrast, the increase in the index for plastic resins and materials accelerated to 1.4 percent after advancing 0.8 percent a month earlier. Prices for alkalies and chlorine and for paper also rose more in July. The index for paint materials turned up after falling in June.

The rate of increase in the index for intermediate foods and feeds slowed from 1.6 percent in June to 0.8 percent in July. Prices for natural, processed, and imitation cheese moved up 1.9 percent after increasing 9.6 percent in June. The indexes for flour and for dry, condensed, and evaporated milk products also rose less in July than they had in the previous month. Prices for beef and veal and for pork fell more in July. By contrast, the index for processed young chickens turned up 0.3 percent following a 4.5-percent decline in June. Prices for shortening and cooking oils and for fluid milk products rose more in July than in the prior month.

The index for materials and components for construction rose 0.2 percent in July following a 0.4-percent gain in the prior month. Price increases for nonferrous wire and cable, cast iron pressure and soil pipe fittings, softwood lumber, treated wood, building paper and board, and for paving mixtures and blocks more than offset declining prices for steel mill products, gypsum products, asphalt felts and coatings, and fabricated structural metal products.

Prices for materials for durable manufacturing declined 0.5 percent in July after increasing 0.3 percent in June. The index for semifinished steel mill products decreased 5.3 percent following a 2.1-percent rise in the preceding month. Prices for hot rolled steel sheet and strip fell in July after no change, while the index for cold rolled steel sheet and strip was unchanged following an increase in June. Prices for secondary aluminum and cement turned down in July after rising a month earlier. Conversely, the index for primary nonferrous metals advanced 2.8 percent following a 2.2-percent decrease in June. Prices for building paper and board and for softwood lumber moved up at quicker rates in July than they had in the prior month. The index for hot rolled steel bars, plates, and structural shapes turned up after falling in June.

Crude goods

The Producer Price Index for Crude Materials for Further Processing increased 1.2 percent in July following a 0.3-percent gain in the preceding month. Prices for crude foodstuffs and feedstuffs and for crude energy material rose more than they had in June. The basic industrial materials index showed no change after declining in the previous month. (See table B.)

Prices for crude foodstuffs and feedstuffs advanced 2.1 percent in July following a 0.5-percent rise in the prior month. The slaughter cattle index increased 1.1 percent compared with a 7.7-percent drop in June. Prices for slaughter broilers and fryers, alfalfa hay, and unprocessed finfish also turned up in July. The index for soybeans rose more than it had in the preceding month. By contrast, partially counteracting the acceleration in crude foodstuffs and feedstuffs prices, the index for corn declined 12.8 percent in July subsequent to a 6.8-percent advance in the previous month. The indexes for fluid milk, wheat, and slaughter hogs increased less than they had in June. (See table 2.)

Prices for crude energy materials moved up 1.1 percent in July after increasing 0.6 percent a month earlier. The index for crude petroleum jumped 11.8 percent following a 2.9-percent rise in the prior month. Coal prices moved up 1.7 percent after increasing 1.1 percent in June. By contrast, the index for natural gas fell 6.4 percent in July following a 1.2-percent decline in the preceding month.

Prices for crude nonfood material less energy were unchanged in July after edging down 0.2 percent in the previous month. The wastepaper index advanced 11.1 percent following a 0.8-percent decrease in the prior month. The indexes for copper base scrap and raw cotton also turned up in July. Prices for gold ores decreased less than they had in the preceding month. The indexes for construction, sand, gravel, and crushed stone and for aluminum base scrap increased after no change in June. By contrast, the iron and steel scrap index decreased 4.7 percent in July compared with a 1.4-percent advance in the prior month. Prices for hides and skins fell more than they had in the preceding 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 climbed 0.8 percent in July after advancing 0.2 percent in June. (Net output price indexes are not seasonally adjusted.) Most of this faster rate of increase is attributable to prices received by petroleum and coal products manufacturers, which jumped 5.0 percent in July following a 3.1- percent drop a month earlier. The industry indexes for printing and related support activities, furniture and related product manufacturing, and textile product mills also turned up after falling in June. By contrast, partially offsetting the acceleration in overall mining, utilities, and manufacturing prices, the index for electric power distribution moved up 1.0 percent in July compared with a 3.3-percent increase in June. Prices received by food manufacturers also advanced less than they had in the prior month. The index for the natural gas distribution industry turned down after rising in June, while prices received by transportation equipment manufacturers decreased in July following no change in the previous month.

Trade Industries. The Producer Price Index for the Net Output of Total Trade Industries rose 0.7 percent in July after falling 1.2 percent in June. (Trade indexes measure changes in margins received by wholesalers and retailers.) Margins received by merchant wholesalers of durable goods moved up 1.6 percent in July following a 4.1-percent drop a month earlier. Similarly, the margin indexes for merchant wholesalers of nondurable goods, grocery stores, and for electronics and appliance stores also turned up after decreasing in June. Margins received by miscellaneous general merchandise stores climbed at faster rates in July than they had in the prior month, while the margin index for gasoline stations declined less than it had in June. By contrast, margins received by electronic shopping and mail order houses fell 7.9 percent in July after increasing 1.2 percent in the preceding month. The margin indexes for department stores, shoe stores, and wholesale trade agents and brokers also turned down following advances in June.

Transportation and Warehousing Industries. The Producer Price Index for the Net Output of Total Transportation and Warehousing Industries climbed 1.3 percent in July after rising 0.8 percent in June. Most of this acceleration can be traced to prices received by the industry for scheduled air transportation, which jumped 5.4 percent in July following a 3.6- percent gain in the previous month. The industry indexes for pipeline transportation of crude oil and refined petroleum products both advanced after no change in June. Prices for deep sea freight transportation and for long-distance, general freight trucking turned up in July after falling in the prior month. By contrast, prices received by line-haul railroads were unchanged in July following a 0.9-percent increase in June. The industry indexes for inland water freight transportation and for couriers moved up at slower rates in July than they had in the preceding month.

Traditional Services Industries. The Producer Price Index for the Net Output of Total Traditional Service Industries decreased 0.2 percent in July after rising 0.7 percent in June. Prices received by the commercial banking industry dropped 4.9 percent following a 4.7-percent advance in the prior month. The indexes for savings institutions and offices of physicians (excluding mental health) also turned down in July. Prices received by non-casino hotels and motels and lessors of nonresidential buildings (excluding miniwarehouses) moved up at slower rates than they had in June. By contrast, the index for cellular and other wireless carriers increased 2.8 percent in July after falling 2.2 percent in the previous month. Prices received by the securities brokerage industry also turned up. The index for portfolio managers climbed in July following no change a month earlier, while prices received by software publishers were unchanged after declining in June.

Resampling of Industries

Effective with this release, the Producer Price Index (PPI) includes data for 84 resampled and 2 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 2007 issue of the PPI Detailed Report online at http://www.bls.gov/ppi/ppidr200707.pdf, 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

212324 Kaolin and Ball Clay Mining 212325 Clay, Ceramic, and Refractory Minerals Mining 212391 Potash, Soda, and Borate Mineral Mining 213114 Support Activities for Metal Mining 213115 Support Activities for Nonmetallic Minerals (except Fuels) Mining 311811 Retail Bakeries 311930 Flavoring Syrup and Concentrate Manufacturing 311941 Mayonnaise, Dressing, and Other Prepared Sauce Manufacturing 311942 Spice and Extract Manufacturing 312111 Soft Drink Manufacturing 313312 Textile and Fabric Finishing (except Broadwoven Fabric) Mills 315211 Men's and Boys' Cut and Sew Apparel Contractors 315212 Women's, Girls', and Infants' Cut and Sew Apparel Contractors 315228 Men's and Boys' Cut and Sew Other Outerwear Manufacturing 315239 Women's and Girls' Cut and Sew Other Outerwear Manufacturing 315292 Fur and Leather Apparel Manufacturing 321992 Prefabricated Wood Building Manufacturing 322121 Paper (except Newsprint) Mills 322122 Newsprint Mills 322130 Paperboard Mills 322222 Coated and Laminated Paper Manufacturing 322223 Plastics, Foil, and Coated Paper Bag Manufacturing 322226 Surface-Coated Paperboard Manufacturing 322231 Die-Cut Paper and Paperboard Office Supplies Manufacturing 322299 All Other Converted Paper Product Manufacturing 325110 Petrochemical Manufacturing 325611 Soap and Other Detergent Manufacturing 325612 Polish and Other Sanitation Good Manufacturing 325620 Toilet Preparation Manufacturing 325992 Photographic Film, Paper, Plate, and Chemical Manufacturing 326111 Plastics Bag Manufacturing 326112 Plastics Packaging Film and Sheet (including Laminated) Manufacturing 326113 Unlaminated Plastics Film and Sheet (except Packaging) Manufacturing 326199 All Other Plastics Product Manufacturing 327320 Ready-Mix Concrete Manufacturing 327331 Concrete Block and Brick Manufacturing 327332 Concrete Pipe Manufacturing 327390 Other Concrete Product Manufacturing 327420 Gypsum Product Manufacturing

Resampling of Industries-Continued

327910 Abrasive Product Manufacturing 327993 Mineral Wool Manufacturing 332116 Metal Stamping 332214 Kitchen Utensil, Pot, and Pan Manufacturing 332311 Prefabricated Metal Building and Component Manufacturing 332321 Metal Window and Door Manufacturing 332510 Hardware Manufacturing 332813 Electroplating, Plating, Polishing, Anodizing, and Coloring 332913 Plumbing Fixture Fitting and Trim Manufacturing 333120 Construction Machinery Manufacturing 333295 Semiconductor Machinery Manufacturing 333313 Office Machinery Manufacturing 333314 Optical Instrument and Lens Manufacturing 333315 Photographic and Photocopying Equipment Manufacturing 333319 Other Commercial and Service Industry Machinery Manufacturing 333515 Cutting Tool and Machine Tool Accessory Manufacturing 333995 Fluid Power Cylinder and Actuator Manufacturing 333999 All Other Miscellaneous General Purpose Machinery Manufacturing 334113 Computer Terminal Manufacturing 334119 Other Computer Peripheral Equipment Manufacturing 334210 Telephone Apparatus Manufacturing 334220 Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing 334416 Electronic Coil, Transformer, and Other Inductor Manufacturing 334514 Totalizing Fluid Meter and Counting Device Manufacturing 334516 Analytical Laboratory Instrument Manufacturing 335212 Household Vacuum Cleaner Manufacturing 335228 Other Major Household Appliance Manufacturing 335311 Power, Distribution, and Specialty Transformer Manufacturing 336321 Vehicular Lighting Equipment Manufacturing 336322 Other Motor Vehicle Electrical and Electronic Equipment Manufacturing 337124 Metal Household Furniture Manufacturing 339991 Gasket, Packing, and Sealing Device Manufacturing 339994 Broom, Brush, and Mop Manufacturing 441110 New Car Dealers 481111 Scheduled Passenger Air Transportation 481112 Scheduled Freight Air Transportation 488119 Other Airport Operations 488190 Other Support Activities for Air Transportation 515210 Cable and Other Subscription Programming 517212 Cellular and Other Wireless Telecommunications 523920 Portfolio Management 524114 Direct Health and Medical Insurance Carriers 532111 Passenger Car Rental 532120 Truck, Utility Trailer, and RV (Recreational Vehicle) Rental and Leasing 562111 Solid Waste Collection 611420 Computer Training* 811310 Commercial Machinery Maintenance and Repair*

* For further discussion of these newly introduced PPIs, see the July 2007 issue of the PPI Detailed Report online at http://www.bls.gov/ppi/ppidr200707.pdf, 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.