February 2008 Producer Price Index

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The Producer Price Index for Finished Goods rose 0.3 percent in February, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 1.0-percent advance in January and a 0.3-percent decline in December. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 0.8 percent in February subsequent to a 1.4-percent advance in January, and the crude goods index rose 3.7 percent after climbing 2.5 percent in the prior month. (See table A.)

Within finished goods, the index for energy goods increased 0.8 percent in February compared with a 1.5-percent gain in the previous month. Prices for consumer foods declined 0.5 percent following a 1.7-percent rise in January. By contrast, slightly counteracting the deceleration in finished goods prices, the index for finished goods other than foods and energy moved up 0.5 percent in February after increasing 0.4 percent a month earlier.

Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.2 percent in February to 172.2 (1982 = 100). From February 2007 to February 2008, finished goods prices advanced 6.4 percent. Over the same period, the index for finished energy goods increased 19.6 percent, prices for finished consumer foods rose 6.0 percent, and the index for finished goods other than foods and energy climbed 2.4 percent. For the 12 months ended February 2008, prices received by intermediate goods producers increased 8.8 percent, and the crude goods index surged 24.6 percent.

Finished goods

The index for finished energy goods increased 0.8 percent in February after rising 1.5 percent in January. The index for unleaded mid-premium gasoline increased 2.8 percent in February subsequent to a 4.3-percent advance in the prior month. Diesel fuel prices also moved up less than a month earlier. Prices for liquefied petroleum gas and home heating oil turned down in February. By contrast, partially offsetting the deceleration in finished energy goods prices, the index for residential natural gas rose 5.7 percent following a 0.7-percent gain in January. Prices for both unleaded regular and premium grade gasoline also advanced at faster rates compared with a month earlier. The index for residential electric power declined less than it had in the preceding month.

The index for finished consumer foods fell 0.5 percent in February after moving up 1.7 percent in January. Prices for fresh and dry vegetables declined 15.7 percent subsequent to a 1.0-percent decrease a month earlier. The dairy products index also fell more than it had in January. Prices for fresh fruits and melons, processed young chickens, and pork turned down in February. The indexes for beef and veal, frozen specialties, bakery products, soft drinks, and eggs for fresh use advanced at slower rates compared with the prior month. By contrast, prices for roasted coffee increased 4.4 percent following no change in January. (See table 2.)

The index for finished goods other than foods and energy moved up 0.5 percent subsequent to a 0.4-percent increase in January. In February, higher prices for pharmaceutical preparations, light motor trucks, passenger cars, alcoholic beverages, sanitary papers and health products, pet food, civilian aircraft, communication and related equipment, turbine and turbine generator sets, and for medical and surgical equipment and devices more than offset lower prices for newspaper circulation.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 0.8 percent in February following a 1.4-percent increase in January. Prices for intermediate energy goods, materials for nondurable manufacturing, and intermediate foods and feeds rose less in February than they had a month earlier. By contrast, partially offsetting the deceleration in intermediate goods prices, the indexes for materials for durable manufacturing and for materials and components for construction increased more than they had in January. Prices for intermediate materials less foods and energy climbed 0.6 percent in February compared with a 0.8-percent gain in the preceding month. (See table B.)

The index for intermediate energy goods increased 1.1 percent in February after rising 2.8 percent in January. Diesel fuel prices advanced 0.9 percent in February following a 5.9- percent jump in the prior month. The finished lubricants index also moved up less than it had in January. Prices for jet fuel, liquefied petroleum gas, home heating oil, and residual fuel turned down in February. Conversely, the utility natural gas index climbed 6.8 percent after inching up 0.1 percent in January. Electric power prices fell less in February than they had a month earlier. (See table 2.)

The index for materials for nondurable manufacturing rose 0.9 percent in February following a 2.2-percent jump in January. Prices for plastic resins and materials increased 0.3 percent in February after climbing 1.6 percent in the previous month. The index for industrial chemicals declined 0.2 percent following a 2.4-percent advance in January, and phosphate prices also turned down in February. The indexes for paper, synthetic rubber, and finished fabrics moved up less than they had in January. Conversely, the nitrogenates index surged 14.3 percent in February after rising 2.9 percent a month earlier. Prices for medicinal and botanical chemicals and for synthetic fibers advanced following January decreases.

The index for intermediate foods and feeds rose 2.3 percent in February after moving up 3.3 percent in January. Prices for beef and veal increased 0.6 percent in February compared with a 3.6-percent advance in the preceding month. The indexes for confectionery materials, prepared animal feeds, and shortening and cooking oils also rose less than they had in January. Prices for fluid milk products and processed young chickens turned down in February. By contrast, the flour index surged 15.2 percent following a 3.3-percent increase in January. Prices for malt and malt byproducts also climbed at faster rates in February, and the index for refined sugar and byproducts advanced after falling in January.

Prices for materials for durable manufacturing jumped 1.6 percent in February following a 0.6-percent rise in January. The index for aluminum extrusion billet surged 10.1 percent in February after advancing 0.5 percent a month earlier. The indexes for hot rolled steel bars, plates, and structural shapes; hot rolled steel sheet and strip; and semifinished steel mill products also increased more than they had in January. Prices for nonferrous mill shapes and secondary aluminum turned up in February. By contrast, prices for cold rolled steel sheet and strip declined 4.2 percent compared with a 2.2-percent decrease in January. The indexes for nonferrous wire and cable and for thermoplastic resins moved up less in February than in the previous month.

The index for materials and components for construction rose 0.7 percent in February following a 0.4-percent increase in January. Prices for fabricated structural metal products advanced 0.8 percent in February after inching up 0.2 percent in the prior month. The indexes for cast iron pressure and soil pipe fittings and for architectural coatings also rose more than they had in January. Prices for concrete products turned up in February, while the softwood lumber index fell less than it had in January. By contrast, prices for asphalt felts and coatings declined 0.5 percent following a 2.7-percent increase in the preceding month. The index for air conditioning and refrigeration equipment also turned down in February. Prices for paving mixtures and blocks and for nonferrous wire and cable advanced less than in January.

Crude goods

The Producer Price Index for Crude Materials for Further Processing climbed 3.7 percent in February following a 2.5-percent increase in January. Prices for crude energy materials rose more than in the previous month. By contrast, partially offsetting the acceleration in prices for crude materials, the indexes for crude foodstuffs and feedstuffs and for crude nonfood materials less energy advanced less than they had a month earlier. (See table B.)

The crude energy materials index increased 5.6 percent in February after rising 1.8 percent in the prior month. Accounting for this acceleration, natural gas prices jumped 11.5 percent compared with a 0.7-percent gain a month earlier. Conversely, the index for crude petroleum moved up 0.6 percent after increasing 2.7 percent in the preceding month, and coal prices rose 1.0 percent following a 3.9-percent advance in January. (See table 2.)

Price increases for crude foodstuffs and feedstuffs slowed to 0.7 percent in February from 2.7 percent in January. The soybeans index rose 4.1 percent after advancing 9.5 percent in January. Prices for corn, slaughter broilers and fryers, and fresh fruits and melons turned down following increases in the previous month. The indexes for fluid milk and for fresh vegetables, except potatoes fell more than they had in January. By contrast, slaughter livestock prices rose 4.5 percent in February subsequent to a 3.8-percent decline a month earlier. The index for slaughter turkeys also turned up in February after falling in the prior month, and wheat prices advanced more than they had in January.

The index for crude nonfood materials less energy moved up 3.3 percent after rising 4.0 percent in January. Price increases for iron and steel scrap slowed to 6.5 percent in February from 17.2 percent in January. The indexes for phosphates, raw cotton, and aluminum base scrap turned down following advances a month earlier. By contrast, prices for construction sand, gravel, and crushed stone moved up 1.9 percent following a 1.4-percent decline in January. The indexes for wastepaper, nonferrous metal ores, and copper base scrap rose more in February than they had 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 advanced 0.7 percent in February after increasing 0.8 percent in January. (Net output price indexes are not seasonally adjusted.) In February, higher prices received by manufacturers of food, chemicals, petroleum and coal products, transportation equipment, machinery, fabricated metal products, and for plastic and rubber products, as well as, for natural gas distribution, electric power generation, and oil and gas extraction outweighed lower prices received for electric power distribution. In February, the index for mining, utilities, and manufacturing industries was 107.8 (December 2006 = 100), 7.1 percent above its year-ago level.

Trade Industries. The Producer Price Index for the Net Output of Total Trade Industries turned up 0.5 percent in February after decreasing 1.2 percent in January. (Trade indexes measure changes in margins received by wholesalers and retailers.) The margin index for electronics and appliance stores rose 3.2 percent in February after dropping 20.2 percent a month earlier. Margins received by department stores also turned up after decreasing in January. The margin index for gasoline stations fell less than in the previous month. Margins received by automobile dealers rose more in February, and the margin index for merchant wholesalers of durable goods was unchanged after falling in January. By contrast, partially offsetting the upturn in the total trade industries index, the increase in the margin index for grocery stores slowed to 0.9 percent in February from 3.7 percent in the prior month. Margins received by merchant wholesalers of nondurable goods also rose less than in January, and the margin index for shoe stores turned down in February after advancing a month earlier. In February, the index for total trade industries was 105.1 (December 2006 = 100), 2.6 percent above its year-ago level.

Transportation and Warehousing Industries. The advance in the Producer Price Index for the Net Output of Total Transportation and Warehousing Industries slowed to 0.3 percent in February from 1.4 percent in the previous month. The industry index for inland water freight transportation rose 1.6 percent after jumping 9.1 percent in January. Prices received by the industries for scheduled passenger air transportation, line haul railroads, local general freight trucking, and for local messenger and delivery services turned down in February after advancing in the prior month. Conversely, the index for the long distance, general freight trucking industry group turned up 1.1 percent after falling 0.2 percent in January. Prices received by scheduled freight air transporters rose more in February than a month earlier, and the industry index for freight transportation arrangement decreased less than in January. In February, the index for transportation and warehousing industries was 108.1 (December 2006 = 100), 6.1 percent above its year-ago level.

Traditional Service Industries. The Producer Price Index for the Net Output of Total Traditional Service Industries turned down 0.1 percent in February after advancing 0.5 percent in the previous month. The index for the depository credit intermediation industry group dropped 0.9 percent after increasing 1.1 percent in January. Prices received by general medical and surgical hospitals and by lessors of nonresidential buildings also turned down in February after rising in the prior month. The industry indexes for direct health and medical insurance carriers and for offices of lawyers increased less than in January. By contrast, the industry index for engineering services turned up 0.4 percent in February after falling 2.0 percent a month earlier. Prices received by wired telecommunication carriers also rose following a January declines. The industry index for investment banking and securities dealing fell less in February than in the previous month, and prices received by direct life insurance carriers increased after no change in January. In February, the index for total traditional service industries was 101.9 (December 2006 = 100), 1.1 percent above its year-ago level.