November 2007 Producer Price Index

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The Producer Price Index for Finished Goods rose 3.2 percent in November, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This gain followed increases of 0.1 percent in October and 1.1 percent in September. At the earlier stages of processing, prices for intermediate goods moved up 3.7 percent after rising 0.1 percent in the prior month, while the crude goods index increased 8.7 percent following a 2.4-percent advance in October. (See table A.)

The acceleration in the finished goods index was led by prices for energy goods, which surged 14.1 percent in November following a 0.8-percent decrease in October. Prices for finished goods excluding foods and energy rose 0.4 percent subsequent to no change in the preceding month. By contrast, partially offsetting the acceleration in the finished goods index, prices for finished consumer foods were unchanged compared with a 1.0-percent increase a month earlier.

Before seasonal adjustment, the Producer Price Index for Finished Goods advanced 1.6 percent in November to 171.3 (1982 = 100). From November 2006 to November 2007, prices for finished goods rose 7.2 percent. Over the same period, the finished energy goods index climbed 23.6 percent, prices for finished consumer foods increased 7.3 percent, and the index for finished goods other than foods and energy moved up 2.0 percent. For the 12 months ended November 2007, prices for intermediate goods increased 8.1 percent, while the crude goods index jumped 22.4 percent.

Finished goods

Prices for finished energy goods increased 14.1 percent in November following a 0.8- percent decline a month earlier. The gasoline index jumped 34.8 percent after falling 3.1 percent in the preceding month. Prices for home heating oil, diesel fuel, and asphalt also turned up in November. The indexes for residential electric power, liquefied petroleum gas, and kerosene rose more than in the prior month. Conversely, slightly counteracting the upturn in finished energy goods prices, the index for residential natural gas fell 5.2 percent in November following a 2.4-percent decline in the previous month. (See table 2.)

Prices for finished goods excluding foods and energy rose 0.4 percent in November subsequent to no change in October. Prices for light motor trucks advanced 2.3 percent compared with a 2.7-percent decrease in the prior month. The indexes for alcoholic beverages, soaps and synthetic detergents, and for communication and related equipment also turned up in November. Prices for pharmaceutical preparations increased after no change a month earlier, and the index for newspaper circulation was unchanged following a decline in the preceding month. By contrast, prices for cigarettes fell 0.5 percent following a 1.0-percent advance in October. The index for household appliances also turned down in November. Prices for passenger cars and civilian aircraft rose less than they had in the previous month. The index for electronic computers fell more than in October.

The finished consumer foods index was unchanged in November subsequent to a 1.0- percent increase a month earlier. The index for fresh and dry vegetables fell 13.2 percent compared with a 29.1-percent advance in October. Prices for soft drinks and for processed fruits and vegetables also turned down in November. The beef and veal index declined more than it had a month earlier, while prices for confectionary end products rose less than in the preceding month. By contrast, the pork index advanced 2.0 percent in November following a 3.3-percent decrease in the previous month. Prices for eggs for fresh use, dairy products, processed young chickens, and processed turkeys also turned up in November.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 3.7 percent in November following a 0.1-percent gain in October. Most of this acceleration can be traced to rising prices for intermediate energy goods, which fell in the previous month. The indexes for materials for nondurable manufacturing and for intermediate foods and feeds increased more than they had in October. Prices for materials for durable manufacturing turned up in November. Conversely, partially offsetting the acceleration in the intermediate goods index, prices for materials and components for construction declined after increasing in the prior month. Excluding foods and energy, prices for intermediate goods advanced 1.0 percent following a 0.1-percent rise in October. (See table B.)

The intermediate energy goods index jumped 13.3 percent in November after edging down 0.1 percent a month earlier. Diesel fuel prices surged 35.8 percent following a 4.0-percent drop in the previous month. The indexes for gasoline, home heating oil, residual fuel, and commercial electric power also turned up after declining in October. Prices for jet fuel and industrial electric power rose more in November compared with a month earlier. By contrast, the index for commercial natural gas decreased 6.0 percent following a 1.2-percent decline in October. Prices for industrial natural gas and for natural gas to electric utilities turned down in November. (See table 2.)

The index for materials for nondurable manufacturing moved up 3.6 percent following a 1.1-percent advance in October. Prices for basic organic chemicals climbed 8.1 percent in November after rising 0.8 percent in the preceding month. The indexes for plastic resins and materials and for paper also increased more than they had in the prior month. Prices for fertilizer materials, paint materials, and processed yarns and threads turned up after declining in October. Conversely, paperboard prices decreased 0.4 percent in November after rising 3.4 percent in the preceding month. The indexes for basic inorganic chemicals and for inedible fats and oils advanced less than in October.

Prices for materials for durable manufacturing increased 1.1 percent in November after moving down 0.4 percent in the previous month. Cold rolled steel sheet and strip prices advanced 9.7 percent following a 7.7-percent decrease a month earlier. The indexes for aluminum mill shapes, building paper and board, semifinished steel mill products, and secondary aluminum also turned up after falling in October. Prices for thermoplastic resins and for hot rolled steel sheet and strip rose more than they had in the previous month. By contrast, prices for copper and brass mill shapes turned down 4.9 percent in November following a 0.5-percent increase in the prior month.

The intermediate foods and feeds index rose 1.2 percent subsequent to a 1.0-percent increase in the preceding month. Prices for natural, processed, and imitation cheese advanced 2.2 percent following a 2.3-percent decline in October. The indexes for pork and processed young chickens also turned up in November. Prices for prepared animal feeds and for shortening and cooking oils rose more than in October. By contrast, flour prices moved down 2.1 percent after rising 5.9 percent in the prior month. The indexes for beef and veal; dry, condensed, and evaporated milk products; and refined sugar and byproducts fell more than they had a month earlier.

Prices for materials and components for construction fell 0.1 percent in November following a 0.1-percent increase in the previous month. Prices for nonferrous wire and cable dropped 5.7 percent after rising 4.3 percent in the prior month. The index for asphalt felts and coatings also turned down in November. Prices for mineral wool for structural insulation fell more than they had in the preceding month. By contrast, prices for steel mill products rose 2.3 percent after declining 1.8 percent a month earlier. The indexes for building paper and board and for plastic construction products also turned up in November. Prices for fabricated structural metal products and concrete products increased after no change in October. The index for gypsum products fell less than in the prior month.

Crude goods

The increase in the Producer Price Index for Crude Materials for Further Processing accelerated to 8.7 percent in November from 2.4 percent in October. The index for crude energy materials climbed more in November than a month earlier. Prices for crude foodstuffs and feedstuffs turned up after declining in the previous month. Conversely, partially offsetting the acceleration in the index for crude materials, the index for basic industrial materials moved down after advancing in October. (See table B.)

The index for crude energy materials jumped 17.0 percent in November after increasing 5.9 percent in October. The advance in the index for natural gas accelerated to 21.6 percent in November from 9.7 percent in the previous month. Prices for crude petroleum climbed 15.5 percent following a 3.7-percent increase in October. The index for coal turned up 0.5 percent after a similar decline a month earlier.

The index for crude foodstuffs and feedstuffs turned up 2.0 percent in November after falling 1.8 percent in October. The increase in the index for corn accelerated to 16.0 percent in November from 0.5 percent in the preceding month. Prices for soybeans also climbed more than in October. The indexes for slaughter broilers and fryers, hogs, and cattle moved down less than a month earlier. Prices for fluid milk turned up after falling in October. Conversely, the index for fresh vegetables, except potatoes decreased 18.8 percent in November following a 34.2- percent rise in the prior month. Prices for wheat also turned down after rising in October.

The index for crude nonfood materials less energy turned down 0.5 percent in November after rising 1.4 percent in October. The index for iron and steel scrap declined 7.6 percent in November following a 0.7-percent decrease in the previous month. Prices for softwood logs, bolts, and timber also moved down more than a month earlier. The index for copper base scrap turned down after rising in October, and prices for wastepaper moved up less than in the previous month. Conversely, the advance in the index for gold ores accelerated to 8.6 percent in November from 4.8 percent in the prior month. Prices for construction sand, gravel, and crushed stone and for aluminum base scrap also rose more than in October. The index for phosphates turned up after declining in the previous 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 1.9 percent in November after inching up 0.1 percent in October. (Net output price indexes are not seasonally adjusted.) Leading this acceleration, prices received by petroleum and coal products manufacturers jumped 14.1 percent in November after edging down 0.1 percent a month earlier. The industry group indexes for food, primary metal, and fabricated metal products manufacturing also turned up after falling in October. Prices received by the electric power distribution industry declined less in November than they had in the prior month. The industry indexes for chemical manufacturing, oil and gas extraction, and natural gas distribution moved up at faster rates than they had in October. By contrast, partially counteracting the acceleration in the total mining, utilities, and manufacturing industries index, prices received by transportation equipment producers increased 0.4 percent in November following a 2.0-percent rise in the preceding month. The index for the beverage and tobacco manufacturing industry group was unchanged in November compared with a gain in the previous month, while prices received by the mining support activities industry group turned down after rising in October.

Trade Industries. The Producer Price Index for the Net Output of Total Trade Industries decreased 0.7 percent in November compared with a 1.4-percent rise in October. (Trade indexes measure changes in margins received by wholesalers and retailers.) Margins received by gasoline stations dropped 9.0 percent in November after jumping 11.7 percent a month earlier. The margin indexes for merchant wholesalers of nondurable goods, department stores, grocery stores, and fuel dealers also turned down after increasing in October. Margins received by merchant wholesalers of durable goods fell more in November than they had in the preceding month. By contrast, the margin index for automobile dealers rose 0.8 percent after a 0.8-percent drop in October. Margins received by clothing stores and furniture stores also turned up in November.

Transportation and Warehousing Industries. The Producer Price Index for the Net Output of Total Transportation and Warehousing Industries advanced 0.6 percent in November after rising 1.0 percent in October. Prices received by the local, general freight trucking industry moved up 1.1 percent in November compared with a 1.5-percent increase in the previous month, while the index for scheduled passenger air transportation fell 0.4 percent following a 4.7-percent advance in October. Prices received by the inland water freight transportation industry declined more in November than they had in the preceding month, while the index for the nonscheduled air transportation industry rose less than it had in October. By contrast, prices received by the industry group for long-distance, general freight trucking moved up 1.2 percent in November after no change in the prior month. The industry indexes for couriers and freight transportation arrangement turned up in November. Prices received by the industries for long-distance specialized freight trucking (excluding used goods) and line-haul railroads increased at faster rates than they had in October.

Traditional Service Industries. The Producer Price Index for the Net Output of Total Traditional Service Industries climbed 0.6 percent in November following no change in October. Prices received by the depository credit intermediation industry group jumped 4.4 percent after dropping 3.0 percent in the previous month. The indexes for management consulting services and casino hotels also turned up in November. Prices received by direct life insurance carriers were unchanged following declines in October. By contrast, the index for general medical and surgical hospitals moved up 0.6 percent after increasing 1.6 percent in the prior month. Prices received by the industries for wired telecommunications carriers, offices of real estate agents and brokers, and passenger car rental turned down in November. The index for offices of physicians (excluding mental health) was unchanged compared with an October advance.