September 2011 Producer Price Index

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The Producer Price Index for finished goods rose 0.8 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Finished goods prices were unchanged in August and increased 0.2 percent in July. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 0.6 percent in September, and the crude goods index advanced 2.8 percent. On an unadjusted basis, prices for finished goods climbed 6.9 percent for the 12 months ended September 2011. (See table A.)

Stage-of-Processing Analysis

Finished goods

In September, the increase in the index for finished goods was broad based, with prices for finished energy goods rising 2.3 percent, the index for finished goods less foods and energy moving up 0.2 percent, and prices for finished consumer foods advancing 0.6 percent.

Finished energy: The index for finished energy goods advanced 2.3 percent in September after decreasing in each of the previous three months. Nearly seventy percent of this rise can be attributed to the gasoline index, which increased 4.2 percent. Higher prices for liquefied petroleum gas and diesel fuel also were factors in the rise in the finished energy goods index. (See table 2.)

Finished core: The index for finished goods less foods and energy moved up 0.2 percent in September, the tenth straight increase. In September, one-third of the advance can be traced to prices for light motor trucks, which rose 0.6 percent. Higher prices for household detergents also contributed to the increase in the finished core index.

Finished foods: Prices for finished consumer foods climbed 0.6 percent in September, the fourth consecutive monthly increase. Accounting for over eighty percent of the September advance, prices for fresh and dry vegetables increased 10.0 percent.

Intermediate goods

The Producer Price Index for intermediate materials, supplies, and components climbed 0.6 percent in September after falling 0.5 percent in August. Over two-thirds of this broad-based advance can be traced to prices for intermediate energy goods, which rose 1.7 percent in September. The indexes for intermediate goods less foods and energy and for intermediate foods and feeds also contributed to the increase in intermediate goods prices, moving up 0.2 percent and 0.9 percent, respectively. For the 12 months ending September 2011, the intermediate goods index jumped 10.5 percent. (See table B.)

Intermediate energy: Prices for intermediate energy goods increased 1.7 percent in September following a 2.3-percent drop in August. A major factor in this rise was the index for diesel fuel, which rose 7.3 percent. Higher prices for gasoline and liquefied petroleum gas also were significant contributors in the advance in the intermediate energy goods index. (See table 2.)

Intermediate core: The index for intermediate goods less foods and energy moved up 0.2 percent in September after edging down 0.1 percent in August. Leading this increase, prices for primary basic organic chemicals rose 2.4 percent in September. An advance in the index for plastic resins and materials also contributed to higher intermediate core prices.

Intermediate foods: The index for intermediate foods and feeds climbed 0.9 percent in September, the fourth straight advance. A 3.2-percent increase in prices for prepared animal feeds accounted for over eighty percent of the September rise in the intermediate foods index.

Crude goods

The Producer Price Index for crude materials for further processing moved up 2.8 percent in September. For the 3-month period ending in September, prices for crude materials advanced 1.8 percent following a 1.1-percent decrease from March to June. In September, the monthly increase in the crude goods index is mostly attributable to prices for crude energy materials, which jumped 7.7 percent. Also contributing to the September climb was the index for crude nonfood materials less energy, which advanced 1.0 percent. By contrast, prices for crude foodstuffs and feedstuffs moved down 0.9 percent. (See table B.)

Crude energy: The index for crude energy materials rose 7.7 percent in September. From June to September, prices for crude energy materials declined 0.5 percent subsequent to a 5.1-percent decrease for the three months ending in June. The monthly advance in September was led by a 23.0-percent jump in the crude petroleum index. Higher prices for coal also were a factor in the rise in the crude energy index. (See table 2.)

Crude core: The index for crude nonfood materials less energy rose 1.0 percent in September. For the 3 months ending in September, crude core prices advanced 3.3 percent after climbing 2.5 percent from March to June. In September, over eighty-five percent of the monthly increase is attributable to the gold ore index, which rose 8.4 percent. A rise in raw cotton prices also contributed to the advance in the crude core index.

Crude foods: The index for crude foodstuffs and feedstuffs fell 0.9 percent in September. From June to September, prices for crude foods moved up 2.9 percent following a 1.4-percent increase for the 3-month period ending in June. A major factor in the September monthly decrease was a 7.4-percent decline in the fluid milk index. Lower prices for slaughter hogs also contributed to the crude foods decrease.

Services Analysis

Trade industries: The Producer Price Index for the net output of total trade industries inched up 0.1 percent in September, the second consecutive increase. (Trade indexes measure changes in margins received by wholesalers and retailers.) Leading the September advance were margins received by clothing stores, which moved up 11.1 percent. Higher margins received by merchant wholesalers of nondurable goods and discount department stores also were factors in the rise in the total trade industries index.

Transportation and warehousing industries: The Producer Price Index for the net output of transportation and warehousing industries declined 0.9 percent in September after increasing in each of the last 11 months. Nearly all of the September decline can be traced to a 5.7-percent drop in the index for scheduled passenger air transportation. Lower prices for long-distance general freight trucking (truckload) and air transportation support activities also contributed to the decrease in the transportation and warehousing industries index.

Traditional service industries: The Producer Price Index for the net output of total traditional service industries edged up 0.1 percent in September, the fourth consecutive advance. The index for the commercial banking industry led the September increase, rising 1.5 percent. Higher prices received by offices of physicians and by non-casino hotels and motels also were factors in the advance in the index for total traditional service industries.