January 2010 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 1.4 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This increase followed a 0.4-percent advance in December and a 1.5-percent rise in November. In January, at the earlier stages of processing, prices received by manufacturers of intermediate goods climbed 1.7 percent, and the crude goods index jumped 9.6 percent. On an unadjusted basis, prices for finished goods moved up 4.6 percent for the 12 months ended January 2010, their third consecutive 12-month increase. (See table A.)

Stage-of-Processing Analysis

Finished goods

About three-fourths of the broad-based January advance in the finished goods index can be traced to higher prices for energy goods, which jumped 5.1 percent. The indexes for finished goods less foods and energy and for finished consumer foods also contributed to the finished goods increase, rising 0.3 percent and 0.4 percent, respectively.

Finished energy: The index for finished energy goods rose 5.1 percent in January, its fourth consecutive monthly increase. About two-thirds of the January advance can be attributed to an 11.5-percent jump in gasoline prices. Increases in the indexes for liquefied petroleum gas and home heating oil also were major factors in the finished energy goods rise. (See table 2.)

Finished core: The index for finished goods less foods and energy moved up 0.3 percent in January after no change in December. Leading this advance, the index for light motor trucks rose 1.9 percent. Higher prices for pharmaceutical preparations also contributed to the increase in the finished core index.

Finished foods: The index for finished consumer foods moved up 0.4 percent in January, its fourth consecutive monthly advance. A major factor in the January rise was a 3.0-percent increase in meat prices.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components climbed 1.7 percent in January, its largest increase since a similar 1.7-percent advance in August 2009. Accounting for about three-fourths of the January rise, prices for intermediate energy goods jumped 6.9 percent. The index for intermediate materials less foods and energy also contributed to this advance, increasing 0.5 percent. By contrast, prices for intermediate foods and feeds fell 0.3 percent. On a 12-month basis, prices for intermediate goods moved up 4.6 percent, the second consecutive month of year-over-year increases. (See table B.)

Intermediate energy: The index for intermediate energy goods rose 6.9 percent in January, the largest increase since a 9.6-percent jump in November 2007. A major factor in the January advance was a 20.4-percent surge in diesel fuel prices. The indexes for gasoline and jet fuel also contributed significantly to higher intermediate energy goods prices. (See table 2.)

Intermediate core: The index for intermediate materials less foods and energy moved up 0.5 percent, its eighth consecutive monthly increase. Nearly half of the January advance can be attributed to a 3.4-percent rise in basic organic chemical prices. An increase in the steel pipe and tube index also was a factor in the intermediate core advance.

Intermediate foods: The index for intermediate foods and feeds fell 0.3 percent, the first decline in six months. This decrease was led by the index for corn, cottonseed, and soybean cake and meal, which dropped 7.5 percent.

Crude goods

The Producer Price Index for Crude Materials for Further Processing climbed 9.6 percent in January. For the 3-month period ending in January, crude material prices rose 16.1 percent, accelerating from an 8.5-percent increase for the 3 months ended October 2009. In January, about three-quarters of the broad-based monthly advance is attributable to a 16.8-percent jump in prices for crude energy materials. Also contributing to the January increase, in roughly equal proportions, the index for crude nonfood materials less energy rose 6.6 percent and prices for crude foodstuffs and feedstuffs moved up 3.2 percent. (See table B.)

Crude energy: The index for crude energy materials jumped 16.8 percent in January. From October through January, prices for crude energy materials climbed 27.5 percent, following a 9.4- percent gain for the 3 months ended October 2009. Two-thirds of the monthly January increase can be traced to a 25.5-percent surge in the natural gas index. Higher crude petroleum prices also contributed to the rise in the index for crude energy materials. (See table 2.)

Crude core: The index for crude nonfood materials less energy advanced 6.6 percent in January. For the 3 months ending in January, crude core prices moved up 10.2 percent, compared with a 12.1-percent rise for the 3 months ended October 2009. Over half of January's over-the- month increase is attributable to a 17.3-percent jump in the index for iron and steel scrap. Higher prices for nonferrous scrap and wastepaper also were factors in the January increase for the crude core index.

Crude foods: The index for crude foodstuffs and feedstuffs moved up 3.2 percent in January. For the 3 month period ending in January, prices for crude foodstuffs and feedstuffs rose 7.9 percent, after advancing 5.1 percent for the 3 months ended October 2009. Most of the January increase can be traced to a 5.8-percent rise in the index for slaughter livestock.

Services Analysis

Trade industries: The Producer Price Index for the Net Output of Total Trade Industries fell 0.5 percent in January, its second consecutive decline. (Trade indexes measure changes in margins received by wholesalers and retailers.) About two-thirds of the January decrease is attributable to a 9.3-percent drop in margins received by gasoline stations. Margins received by general merchandise stores and home centers also fell in January, contributing significantly to the decline in the total trade industries index.

Transportation and warehousing industries: The Producer Price Index for the Net Output of Transportation and Warehousing Industries jumped 1.3 percent in January, its fourth straight advance. Accounting for about forty percent of the January increase, prices received by the couriers industry rose 6.0 percent. Higher prices received by the air transportation industry group and the industry for pipeline transportation of crude oil also were major factors in the January advance in the transportation and warehousing industries index.

Traditional service industries: The Producer Price Index for the Net Output of Total Traditional Service Industries moved up 1.0 percent in January, its ninth advance in the last ten months. Almost half of the January rise can be traced to a 4.9-percent increase in prices received by the depository credit intermediation industry group. Higher prices received by insurance carriers and offices of physicians also contributed to the advance in the total traditional service industries index.

Resampling of Industries

Effective with this release, the Producer Price Index (PPI) includes data for 65 resampled industries and one newly introduced industry 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 January 2010 issue of the PPI Detailed Report online at http://www.bls.gov/ppi/ppidr201001.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

212399 All other nonmetallic mineral mining 311212 Rice milling 311213 Malt manufacturing 311221 Wet corn milling 311222 Soybean processing 311225 Fats and oils refining and blending 311512 Creamery butter manufacturing 311813 Frozen cakes and other pastries manufacturing 312113 Ice manufacturing 314999 All other miscellaneous textile product mills 315224 Men's and boys' cut and sew trouser, slack, and jean manufacturing 315225 Men's work clothing manufacturing 315291 Infants' cut and sew apparel manufacturing 315991 Hat, cap, and millinery manufacturing 316213 Men's nonathletic footwear manufacturing 316214 Women's nonathletic footwear manufacturing 316219 Other footwear manufacturing 321920 Wood container and pallet manufacturing 322214 Fiber can, tube, and drum manufacturing 323118 Blankbook and looseleaf binder manufacturing 323122 Prepress services 324121 Asphalt paving mixture and block manufacturing 324199 All other petroleum and coal products manufacturing 325212 Synthetic rubber manufacturing 325311 Nitrogenous fertilizer manufacturing 325312 Phosphatic fertilizer manufacturing 325314 Fertilizer, mixing only, manufacturing 325411 Medicinal and botanical manufacturing 325412 Pharmaceutical preparation manufacturing 325991 Custom compounding of purchased resins 326160 Plastics bottle manufacturing 331112 Ferroalloy and related product manufacturing 331311 Alumina refining 331312 Primary aluminum production 331410 Nonferrous metal (except aluminum) smelting and refining 332211 Cutlery and flatware, except precious, manufacturing 332313 Plate work manufacturing 332612 Spring, light gauge, manufacturing 332710 Machine shops 333111 Farm machinery and equipment manufacturing 333112 Lawn and garden equipment manufacturing 333311 Automatic vending machine manufacturing 333415 AC, refrigeration, and forced air heating 333511 Industrial mold manufacturing 333512 Metal cutting machine tool manufacturing 333513 Metal forming machine tool manufacturing 333911 Pump and pumping equipment manufacturing 334413 Semiconductors and related device manufacturing 334517 Irradiation apparatus manufacturing 335911 Storage battery manufacturing 335912 Primary battery manufacturing 335929 Other communication and energy wire manufacturing 337125 Household furniture, excluding wood or metal, manufacturing 339932 Game, toy, and children's vehicle manufacturing 339992 Musical instrument manufacturing 339993 Fastener, button, needle, and pin manufacturing 339999 All other miscellaneous manufacturing 441320 Tire dealers 493110 General warehousing and storage 493130 Farm product warehousing and storage 519130 Internet publishing and web search portals* 531210 Offices of real estate agents and brokers 531311 Residential property managers 531312 Nonresidential property managers 531320 Offices of real estate appraisers 541330 Engineering services

* For further discussion of this newly introduced PPI, see the January 2010 issue of the PPI Detailed Report online at http://www.bls.gov/ppi/ppidr201001.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.

Recalculation of Seasonal Adjustment Factors

Effective with this release, seasonal adjustment factors have been recalculated to reflect price- movement patterns during 2009 for stage-of-processing (SOP) and commodity-grouping indexes. This routine annual recalculation may affect previously published seasonally adjusted indexes and percent changes for January 2005 through December 2009. Revised seasonally adjusted data for this period, as well as seasonal adjustment factors for commodity indexes to be used through December 2010, were released February 16, 2010. To obtain this information, 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, or visit the Producer Price Index homepage at www.bls.gov/ppi.

The table below provides monthly seasonally adjusted percent changes for the three major SOP categories during 2009, based on former and recalculated seasonal factors. These percent changes include final price data through August 2009 and may differ from values shown in tables A and B of this release, which include final price data through September 2009.

Finished Goods Intermediate Goods Crude Goods Month Former Recalculated Former Recalculated Former Recalculated