July 2008 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 1.2 percent in July, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed a 1.8-percent jump in June and a 1.4-percent rise in May. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 2.7 percent in July compared with a 2.1-percent gain in the prior month, and the index for crude materials for further processing climbed 4.2 percent subsequent to a 3.7-percent increase in June. (See table A.)

Among prices for finished goods, the index for energy goods rose 3.1 percent in July following a 6.0-percent jump in June. Price increases for finished consumer foods also slowed, from 1.5 percent in June to 0.3 percent in July. By contrast, partially offsetting the deceleration in finished goods prices, the index for finished goods other than foods and energy advanced 0.7 percent after edging up 0.2 percent in June.

Before seasonal adjustment, the Producer Price Index for Finished Goods moved up 1.4 percent in July to 185.0 (1982 = 100). From July 2007 to July 2008, the finished goods index advanced 9.8 percent. Over the same period, prices for finished energy goods jumped 28.0 percent, the index for finished goods other than foods and energy increased 3.5 percent, and prices for finished consumer foods rose 8.7 percent. For the 12-month period ended in July, the index for intermediate goods advanced 16.6 percent, and prices received by crude goods producers surged 51.2 percent.

Finished goods

The finished energy goods index increased 3.1 percent in July compared with a 6.0- percent advance in June. Home heating oil prices moved up 3.7 percent in July following a 12.4- percent jump in the previous month, and the gasoline index turned down 0.2 percent after rising 9.0 percent in June. Prices for diesel fuel increased less than they had a month earlier. Conversely, slightly counteracting the deceleration in finished energy goods prices, the index for residential electric power climbed 2.0 percent subsequent to a 0.8-percent gain in June. Prices for residential natural gas, asphalt, liquefied petroleum gas, and lubricating and similar oils also rose more than in the prior month. (See table 2.)

The index for finished consumer foods edged up 0.3 percent in July after jumping 1.5 percent in June. Higher prices for beef and veal, fluid milk products, soft drinks, bakery products, and boxed meat outweighed lower prices for fresh vegetables (except potatoes), eggs for fresh use, fresh fruits and melons, natural cheese (except cottage cheese), and frozen juices and ades.

The index for finished goods less foods and energy climbed 0.7 percent in July after increasing 0.2 percent a month earlier. Prices for light motor trucks moved up 0.8 percent subsequent to a 1.8-percent drop in June. The indexes for pharmaceutical preparations, consumer plastic products, and communication and related equipment also turned up in July. Prices for turbine and turbine generator sets rose more than they had in the previous month. Conversely, the index for passenger cars increased 1.4 percent following a 2.2-percent gain in June. Pet food prices also rose less in July. The indexes for wood household furniture and for textbooks turned down after rising in the prior month.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components advanced 2.7 percent in July following a 2.1-percent increase in June. Prices for materials for nondurable manufacturing, intermediate food and feeds, and materials and components for construction rose more than they had in the previous month. By contrast, partially offsetting the acceleration in intermediate goods prices, the indexes for intermediate energy goods and materials for durable manufacturing increased less than they had in June. Excluding foods and energy, prices for intermediate goods moved up 2.0 percent in July after rising 1.3 percent a month earlier. (See table B.)

The index for materials for nondurable manufacturing climbed 5.4 percent in July compared with a 2.7-percent gain in the preceding month. Prices for basic organic chemicals moved up 6.9 percent in July following a 2.6-percent advance a month earlier. The indexes for plastic resins and materials, inedible fats and oils, paper, meats, and synthetic rubber also increased more than they had in June. Prices for alkalies and chlorine turned up in July. By contrast, the advance in the index for agricultural chemicals slowed to 7.9 percent from 14.2 percent in June. Prices for leather turned down in July. (See table 2.)

Prices for intermediate foods and feeds advanced 4.0 percent subsequent to a 1.0-percent increase in June. The formula feeds index climbed 8.3 percent after rising 1.1 percent in the previous month. Prices for meats and for shortening and cooking oils also increased more than they had a month earlier. The index for corn, cottonseed, and soybean cake and meal turned up in July. By contrast, the flour index moved down 7.8 percent following a 0.8-percent decrease in June. Prices for processed eggs also declined more compared with the preceding month. The indexes for natural, processed, and imitation cheese and for processed poultry turned down in July.

The index for materials and components for construction advanced 1.7 percent in July after rising 1.5 percent in the preceding month. The paving mixtures and blocks index increased 14.5 percent subsequent to a 6.3-percent advance a month earlier. Prices for asphalt felts and coatings and for plastic construction products also rose more than they had in June. The index for nonferrous wire and cable turned up in July, and prices for cast iron pressure and soil pipe and fittings advanced following no change in the prior month. By contrast, prices for steel mill products moved up 1.7 percent after jumping 8.1 percent in June. The index for non-farm prefabricated metal building systems also advanced less than it had a month earlier. Prices for softwood lumber and ready-mixed concrete turned down in July.

The intermediate energy goods index moved up 4.3 percent subsequent to a 5.0-percent increase a month earlier. Diesel fuel prices advanced 2.6 percent following a 6.7-percent jump in June. The indexes for jet fuel and home heating oil also rose less than in the preceding month. Gasoline prices declined after climbing in June. By contrast, the index for electric power increased 1.3 percent compared with a 0.3-percent decline in the previous month. Price increases for residual fuels, utility natural gas, and asphalt accelerated in July.

Prices for materials for durable manufacturing moved up 1.5 percent following a 1.7- percent increase in June. Leading this deceleration, the steel mill products index advanced 1.7 percent subsequent to an 8.1-percent rise in the previous month. Prices for softwood lumber and for building paper and board turned down in July. By contrast, the index for primary nonferrous metals rose 3.2 percent in July after decreasing 5.8 percent a month earlier. Similarly, prices for copper and brass mill shapes, nonferrous wire and cable, and paints and allied products also turned up in July. The plastic resins and materials index advanced more than it had in the prior month.

Crude goods

The Producer Price Index for Crude Materials for Further Processing increased 4.2 percent in July following a 3.7-percent advance in June. Prices for crude energy materials rose more than in June. The index for crude nonfood materials less energy turned up after falling a month earlier. By contrast, partially offsetting the acceleration in crude goods prices, the index for crude foodstuffs and feedstuffs increased less in July than it had in the prior month. (See table B.)

The index for crude energy materials climbed 6.9 percent in July following a 5.4-percent rise a month earlier. The increase in the index for natural gas accelerated to 7.8 percent from 5.2 percent in June. Prices for crude petroleum advanced 6.7 percent following a 4.4-percent rise in the previous month. Conversely, the index for coal moved up 2.1 percent in July after jumping 14.4 percent in the prior month. (See table 2.)

The index for crude nonfood materials less energy turned up 3.4 percent in July after edging down 0.2 percent a month earlier. The index for nonferrous scrap climbed 5.0 percent following a 5.6-percent drop in June. Prices for wastepaper and for stainless and alloy steel scrap also turned up after falling in the previous month. The indexes for carbon steel scrap and gold ores advanced more than in June. Conversely, the rise in the index for phosphates slowed to 9.6 percent in July from 25.4 percent in the prior month. Prices for construction sand, gravel, and crushed stone, and for pulpwood turned down after increasing in June.

The index for crude foodstuffs and feedstuffs inched up 0.1 percent after advancing 3.5 percent in June. In July, higher prices for slaughter steers and heifers, soybeans, slaughter chickens, and slaughter cows and bulls slightly outweighed lower prices for wheat, corn, ungraded chicken eggs, and fresh vegetables, except potatoes.

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 2.2 percent in July following a 1.8-percent advance in June. (Net output price indexes are not seasonally adjusted.) Prices received by the livestock slaughtering industry jumped 6.8 percent in July after increasing 0.7 percent a month earlier. The indexes for animal feed manufacturing (excluding pet food), natural gas distribution, and crude petroleum and natural gas extraction also moved up more than they had in June. Prices received by the industry for automobile, light truck, and utility vehicle manufacturing turned up in July. By contrast, partially offsetting the acceleration in the index for total mining, utilities, and manufacturing industries, the index for electric power distribution advanced 1.9 percent following a 3.3-percent rise in June. Prices received by the industries for phosphate fertilizer manufacturing and petroleum refining also increased less in July than they had in the preceding month. The index for cheese manufacturing declined after moving up in June. In July, the index for total mining, utilities, and manufacturing industries was 118.9 (December 2006 = 100), 12.9 percent above its year-ago level.

Trade Industries. The Producer Price Index for the Net Output of Total Trade Industries climbed 1.1 percent in July following a 0.7-percent rise in June. (Trade indexes measure changes in margins received by wholesalers and retailers.) Margins received by wholesalers of nondurable goods edged up 0.2 percent in July after dropping 4.0 percent in the prior month. The margin indexes for grocery stores (excluding convenience stores), electronic shopping and mail-order houses, and tire dealers also turned up after falling in June. Margins received by gasoline stations with convenience stores and by pharmacies and drug stores increased more in July than they had a month earlier. By contrast, margins received by merchant wholesalers of durable goods climbed 1.3 percent following a 2.6-percent rise a month earlier. The margin index for non-discount department stores also advanced less than it had in June. Margins received by family clothing stores turned down in July. In July, the index for total trade industries was 110.1 (December 2006 = 100), 5.5 percent above its year-ago level.

Transportation and Warehousing Industries. The Producer Price Index for the Net Output of Total Transportation and Warehousing Industries rose 0.8 percent in July after climbing 2.3 percent in June. The increase in prices received by the scheduled passenger air transportation industry slowed to 0.5 percent in July from 5.8 percent in the previous month. The indexes for general freight trucking, line-haul railroads, deep sea freight transportation, and both local and long distance specialized freight trucking of new goods also advanced less than they had in June. Prices received by the scheduled freight air transportation industry turned down in July. By contrast, the index for the couriers industry increased 2.4 percent following a 1.2-percent gain in June. Prices received by the industries for pipeline transportation of crude oil and for general warehousing and storage moved up in July after no change in the prior month. In July, the index for total transportation and warehousing industries was 115.9 (December 2006 = 100), 10.3 percent above its year-ago level.

Traditional Service Industries. The Producer Price Index for the Net Output of Total Traditional Service Industries edged down 0.2 percent in July after inching up 0.1 percent in June. Leading this downturn, prices received by the commercial banking industry dropped 5.5 percent in July following a 0.4-percent decline in the preceding month. Prices received by casino hotels also fell more than in June. The indexes for the securities, commodity contracts, and like activities industry sector and for the engineering services industry turned down in July. Conversely, the index for savings institutions rose 1.2 percent following a 2.7-percent decline in June. Prices received by the industries for software publishers, offices of certified public accountants, and real estate agents and brokers also turned up in July after falling in the previous month. The index for passenger car rental rose more than in June. In July, the index for total traditional service industries was 101.8 (December 2006 = 100), 0.4 percent above its year-ago level.

Resampling of Industries

Effective with this release, the Producer Price Index (PPI) includes data for 58 resampled and 4 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 2008 issue of the PPI Detailed Report online at http://www.bls.gov/ppi/ppidr200807.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

212111 Bituminous coal and lignite surface mining 212112 Bituminous coal underground mining 212290 Other metal ore mining 23811X Concrete contractors, nonresidential building work* 23816X Roofing contractors, nonresidential building work* 23821X Electrical contractors, nonresidential building work* 23822X Plumbing/HVAC contractors, nonresidential building work* 311230 Breakfast cereal manufacturing 311422 Specialty canning 311611 Animal, except poultry, slaughtering 311612 Meat processed from carcasses 311615 Poultry processing 311911 Roasted nuts and peanut butter manufacturing 311920 Coffee and tea manufacturing 311991 Perishable prepared food manufacturing 311999 All other miscellaneous food manufacturing 313111 Yarn spinning mills 313112 Yarn texturizing and twisting mills 313113 Thread mills 313230 Nonwoven fabric mills 313241 Weft knit fabric mills 313249 Other knit fabric and lace mills 323112 Commercial flexographic printing 325132 Synthetic organic dye and pigment manufacturing 325192 Cyclic crude and intermediate manufacturing 327112 Vitreous china and earthenware articles manufacturing 331521 Aluminum die-casting foundries 331524 Aluminum foundries, except die-casting 331528 Other nonferrous foundries, except die-casting 332114 Custom roll forming 332721 Precision turned product manufacturing 332722 Bolt, nut, screw, rivet, and washer manufacturing 332812 Metal coating and nonprecious engraving 333618 Other engine equipment manufacturing 333992 Welding and soldering equipment manufacturing 334290 Other communications equipment manufacturing 334412 Bare printed circuit board manufacturing 334414 Electronic capacitor manufacturing 334518 Watch, clock, and part manufacturing 335129 Other lighting equipment manufacturing 335999 Miscellaneous electrical equipment manufacturing 336413 Other aircraft parts and equipment 336999 All other transportation equipment manufacturing 337211 Wood office furniture manufacturing 337212 Custom architectural woodwork and millwork 339920 Sporting and athletic goods manufacturing 443120 Computer and software stores 448110 Men's clothing stores 448120 Women's clothing stores 448140 Family clothing stores 481211 Nonscheduled air passenger chartering** 481212 Nonscheduled air freight chartering** 492210 Local messengers and local delivery 511191 Greeting card publishers 515120 Television broadcasting 518210 Data processing and related services 531130 Lessors of miniwarehouses and self-storage units 541219 Other accounting services 621111 Offices of physicians, except mental health 622110 General medical and surgical hospitals 622210 Psychiatric and substance abuse hospitals 622310 Other specialty hospitals

* For further discussion of these newly introduced PPIs, see the July 2008 issue of the PPI Detailed Report online at http://www.bls.gov/ppi/ppidr200807.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 481211 and NAICS 481212 were previously service lines within a single industry, NAICS 481210.