November 2010 Producer Price Index

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The Producer Price Index for Finished Goods rose 0.8 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This increase followed a 0.4-percent advance in both October and September. At the earlier stages of processing, prices received by manufacturers of intermediate goods climbed 1.1 percent in November, and the crude goods index moved up 0.6 percent. On an unadjusted basis, prices for finished goods rose 3.5 percent for the 12 months ended November 2010, their smallest 12-month increase since a 3.1-percent advance in August. (See table A.)

Stage-of-Processing Analysis

Finished goods

About two-thirds of the November advance in the finished goods index can be traced to prices for energy goods, which rose 2.1 percent. Also contributing to the broad-based November increase in the finished goods index, prices for consumer foods and for goods other than foods and energy advanced 1.0 percent and 0.3 percent, respectively.

Finished energy: The index for finished energy goods climbed 2.1 percent in November, its fourth consecutive monthly increase. Over three-fourths of the November advance can be attributed to a 4.7-percent rise in gasoline prices. Increases in the indexes for home heating oil and diesel fuel also contributed to higher finished energy goods prices. (See table 2.)

Finished foods: The index for finished consumer foods advanced 1.0 percent in November, its fourth increase in the last five months. Over half of the November rise can be traced to prices for fresh fruits and melons, which climbed 13.6 percent. A surge in prices for eggs for fresh use also contributed to the advance in the finished consumer foods index.

Finished core: The index for finished goods less foods and energy moved up 0.3 percent in November, after declining 0.6 percent a month earlier. A 1.7-percent increase in prices for passenger cars led the advance in the finished core index.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components moved up 1.1 percent in November, its fourth consecutive monthly increase. The November advance was broad-based, with prices for intermediate energy goods rising 2.8 percent, the index for intermediate materials less foods and energy increasing 0.7 percent, and prices for intermediate foods and feeds climbing 1.9 percent. On a 12-month basis, the index for intermediate goods moved up 6.3 percent in November. (See table B.)

Intermediate energy: Prices for intermediate energy goods increased 2.8 percent in November, their fourth straight monthly climb. A major factor in the November rise was the index for diesel fuel, which moved up 4.8 percent. Higher prices for gasoline and commercial electric power also contributed significantly to the advance in the intermediate energy goods index. (See table 2.)

Intermediate core: The index for intermediate materials less foods and energy increased 0.7 percent in November, its largest rise since a 1.1-percent jump in April. About thirty percent of the November advance can be attributed to prices for industrial chemicals, which moved up 3.1 percent. Higher prices for cold rolled steel sheet and strip also were a factor in the intermediate core increase.

Intermediate foods: Prices for intermediate foods and feeds rose 1.9 percent in November, their fourth consecutive monthly advance. About forty percent of the November increase can be traced to the index for prepared animal feeds, which moved up 4.5 percent.

Crude goods

The Producer Price Index for Crude Materials for Further Processing rose 0.6 percent in November. For the 3 months ended in November, crude goods prices increased 4.3 percent following a 2.3-percent advance for the 3 months ended in August. Leading the monthly November rise, the index for crude nonfood materials less energy climbed 3.1 percent. Also contributing to higher crude goods prices, the index for foodstuffs and feedstuffs moved up 0.7 percent. By contrast, prices for crude energy materials decreased 1.3 percent. (See table B.)

Crude core: The index for crude nonfood materials less energy moved up 3.1 percent in November. From August to November, crude core prices increased 11.2 percent after decreasing 2.1 percent from May to August. About a third of November's monthly advance can be traced to a 6.2-percent jump in the index for nonferrous metal ores. Higher prices for iron and steel scrap and for nonferrous scrap also contributed to the rise in the crude core index. (See table 2.)

Crude foods: The index for crude foodstuffs and feedstuffs increased 0.7 percent in November. For the 3 months ended in November, prices for crude foodstuffs and feedstuffs climbed 10.2 percent following a 1.1-percent advance for the 3 months ended in August. Leading the monthly rise in November, the index for hay, hayseeds, and oilseeds increased 7.4 percent. A 110.4-percent jump in prices for ungraded chicken eggs also was a major factor in the advance in the index for crude foods.

Crude energy: The index for crude energy materials moved down 1.3 percent in November. From August to November, crude energy prices fell 5.1 percent after rising 6.0 percent during the prior 3 months. The monthly decrease in November was the result of a 14.1-percent drop in the index for natural gas.

Services Analysis

Trade industries: The Producer Price Index for the Net Output of Total Trade Industries inched down 0.1 percent in November after falling 0.4 percent a month earlier. (Trade indexes measure changes in margins received by wholesalers and retailers.) Leading the November decline, margins received by warehouse clubs and supercenters dropped 12.8 percent. Lower margins received by merchant wholesalers of durable goods and by electronic shopping and mail- order houses also contributed to the decrease in the total trade industries index.

Transportation and warehousing industries: The Producer Price Index for the Net Output of Transportation and Warehousing Industries moved up 0.2 percent in November following a 1.2- percent increase in the prior month. The main factor in the November advance was a 1.6-percent rise in prices received by the long-distance general freight trucking industry group. The industry indexes for deep sea freight transportation and for used household and office goods moving also contributed to the increase in prices received by transportation and warehousing industries.

Traditional service industries: The Producer Price Index for the Net Output of Total Traditional Service Industries climbed 0.4 percent in November, its eighth straight advance. About sixty percent of the November rise can be traced to prices received by the commercial banking industry, which increased 2.8 percent. Higher prices received by the industry group for securities, commodity contracts, and other financial investment and related activities, as well as by general medical and surgical hospitals, also were major factors in the advance in the total traditional service industries index.

Some 12-month percent change figures for November 2010 in this release are noted as being revised. This note refers to revisions made to November 2009 index values, which were posted on April 29, 2010. For additional information, see http://www.bls.gov/ppi/nov2009revision.htm or call the Division of Industrial Prices and Price Indexes, Section of Index Analysis and Public Information at (202) 691-7705.

Recalculated Seasonal Adjustment Factors and Relative Importance Figures to be Available on February 14, 2011

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 14, 2011 (2 workdays prior to the release of PPI data for January 2011 on February 16):

* Direct seasonal factors for commodity indexes for the year 2011, * Recalculated seasonal factors for the last 5 years (2006-2010) for the commodity indexes, * Recalculated seasonal factors for the last 5 years (2006-2010) for the stage-of-processing indexes.

In addition to recalculated seasonal factors, December 2010 relative importance figures also will be available on February 14, 2011.

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.