November 2009 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 rose 1.8 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This increase followed a 0.3-percent advance in October and a 0.6-percent decrease in September. In November, at the earlier stages of processing, prices received by manufacturers of intermediate goods climbed 1.4 percent, and the crude goods index rose 5.7 percent. On an unadjusted basis, prices for finished goods moved up 2.4 percent for the 12 months ended November 2009, their first 12-month increase since November 2008. (See table A.)

Stage-of-Processing Analysis

Finished goods

About three-fourths of the November advance in the finished goods index can be traced to higher prices for energy goods, which jumped 6.9 percent. The indexes for finished goods less foods and energy and for finished consumer foods also contributed to the finished goods increase, both rising 0.5 percent.

Finished energy: The index for finished energy goods climbed 6.9 percent in November after advancing 1.6 percent a month earlier. About sixty percent of the broad-based November rise can be attributed to a 14.2-percent surge in gasoline prices. Increases in the indexes for liquefied petroleum gas and home heating oil also were major factors in the finished energy goods advance. (See table 2.)

Finished core: The index for finished goods less foods and energy moved up 0.5 percent in November, its largest increase since a 0.5-percent gain in October 2008. Leading the November advance, the index for light motor trucks jumped 4.2 percent. Higher cigarette prices also contributed to the rise in the finished core index.

Finished foods: The index for finished consumer foods advanced 0.5 percent in November, its second consecutive monthly increase. Over sixty percent of the November rise can be traced to higher prices for fresh and dry vegetables, which climbed 8.7 percent.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components rose 1.4 percent in November, its fourth straight monthly advance. Accounting for about three-fourths of the broad-based November increase, prices for intermediate energy goods climbed 5.4 percent. The indexes for both intermediate goods less foods and energy and for intermediate foods and feeds also contributed to this advance, rising 0.3 and 0.7 percent, respectively. On a 12-month basis, prices for intermediate goods fell 1.6 percent in November. This is the fourth consecutive month of slowing year-over-year declines following a record 15.2-percent drop for the 12 months ended July 2009. (See table B.)

Intermediate energy: The index for intermediate energy goods rose 5.4 percent in November, its second consecutive monthly increase. A major factor in the November advance was an 18.8- percent surge in jet fuel prices. The indexes for gasoline and liquefied petroleum gas also contributed significantly to higher intermediate energy goods prices. (See table 2).

Intermediate core: Prices for intermediate materials less foods and energy increased 0.3 percent in November, their fifth increase in the last six months. The index for basic organic chemicals led the November advance, rising 4.3 percent. Higher prices for medicinal and botanical chemicals also were a factor in the intermediate core increase.

Intermediate foods: The index for intermediate foods and feeds moved up 0.7 percent in November following two consecutive monthly declines. About forty percent of this advance can be attributed to prices for pork, which climbed 6.4 percent.

Crude goods

The Producer Price Index for Crude Materials for Further Processing increased 5.7 percent in November. For the 3-month period ending in November, crude material prices rose 9.1 percent after advancing 4.4 percent in the 3 months ending in August. In November, monthly increases of 12.2 percent in the index for crude energy materials and 2.6 percent for prices of crude foodstuffs and feedstuffs outweighed a 0.8-percent decrease in the index for crude nonfood materials less energy. (See table B.)

Crude energy: The index for crude energy materials increased 12.2 percent in November. From August to November, this index rose 15.0 percent compared with a 12.6-percent rise in the 3 months ending in August. Accounting for about two-thirds of the monthly November increase, the index for natural gas jumped 25.5 percent. Higher prices for both crude petroleum and coal also contributed to the advance in the crude energy materials index. (See table 2.)

Crude foods: Prices for crude foodstuffs and feedstuffs rose 2.6 percent in November. This index moved up 5.8 percent in the most recent 3-month period compared with a 7.1-percent decline in the previous 3-month period. In November, over sixty percent of the monthly increase in the crude foods index can be attributed to a 25.6-percent surge in prices for slaughter hogs. An advance in the fluid milk index also was a significant factor in the rise for crude foodstuffs and feedstuffs.

Services Analysis

Trade industries: The Producer Price Index for the Net Output of Total Trade Industries moved up 1.3 percent in November after no change in the previous month. (Trade indexes measure changes in margins received by wholesalers and retailers.) The November increase was led by a 36.5-percent rise in the margin index for gasoline stations. Higher margins received by merchant wholesalers of durable goods and general merchandise stores also contributed to the advance in the total trade industries index.

Transportation and warehousing industries: The Producer Price Index for the Net Output of Total Transportation and Warehousing Industries rose 0.5 percent in November, its second consecutive monthly increase. About seventy percent of the November advance can be traced to a 1.8-percent rise in prices received by the air transportation industry group. The indexes for long- distance general freight trucking (by the truckload) and specialized freight trucking also moved up in November.

Traditional service industries: The Producer Price Index for the Net Output of Total Traditional Service Industries declined 0.1 percent in November after advancing 0.5 percent in October. Two-thirds of this decline can be attributed to prices received by general and medical surgical hospitals, which fell 0.5 percent. The industry indexes for non-casino hotels and motels and for passenger car rental also decreased in November.

Recalculated Seasonal Adjustment Factors and Relative Importance Figures to be Available on February 16, 2010

Each year with the release of PPI data for January, seasonal adjustment factors are recalculated to reflect price movements from the just-completed calendar year. This routine annual calculation may result in revisions to seasonally adjusted indexes for the previous 5 years. The following information will be available on February 16, 2010 (2 workdays prior to the release of PPI data for January 2010 on February 18):

* Direct seasonal factors for commodity indexes for the year 2010,

* Recalculated seasonal factors for the last 5 years (2005-2009) for the commodity indexes,

* Recalculated seasonal factors for the last 5 years (2005-2009) for the stage-of-processing indexes.

In addition to recalculated seasonal factors, December 2009 relative importance figures also will be available on February 16, 2010.

To obtain this information, visit the PPI website at http://www.bls.gov/ppi/ or call the Division of Industrial Prices and Price Indexes, Section of Index Analysis and Public Information at (202) 691-7705.