September 2012 Producer Price Index

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The Producer Price Index for finished goods rose 1.1 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods advanced 1.7 percent in August and moved up 0.3 percent in July. At the earlier stages of processing, prices received by manufacturers of intermediate goods rose 1.5 percent in September, and the crude goods index advanced 2.8 percent. On an unadjusted basis, prices for finished goods climbed 2.1 percent for the 12 months ended September 2012, the largest rise since a 2.8-percent increase for the 12 months ended March 2012. (See table A.)

Stage-of-Processing Analysis

Finished goods

In September, the rise in finished goods prices was led by the index for finished energy goods, which advanced 4.7 percent. Also contributing to higher finished goods prices, the index for finished consumer foods moved up 0.2 percent. Prices for finished goods less foods and energy were unchanged in September.

Finished energy: Prices for finished energy goods advanced 4.7 percent in September after rising 6.4 percent in August. A 9.8-percent jump in the gasoline index accounted for over eighty percent of the September increase. Advances in the indexes for diesel fuel and residential natural gas also contributed to the rise in finished energy goods prices. (See table 2.)

Finished foods: The index for finished consumer foods moved up 0.2 percent in September, the fourth consecutive increase. Leading the September advance, prices for dairy products climbed 2.8 percent. Higher prices for fresh fruits and melons also were a major factor in the increase in the finished consumer foods index.

Finished core: Prices for finished goods less foods and energy were unchanged in September after rising 0.2 percent a month earlier. Higher prices for light motor trucks were offset by declining prices for communication and related equipment.

Intermediate goods

The Producer Price Index for intermediate materials, supplies, and components moved up 1.5 percent in September, the largest advance since a 1.7-percent jump in February 2011. Leading the broad-based rise in September, prices for intermediate energy goods increased 4.3 percent. Also contributing to this advance, the index for intermediate goods less foods and energy rose 0.6 percent, and prices for intermediate foods and feeds climbed 2.0 percent. For the 12 months ended in September, the index for intermediate materials, supplies, and components edged down 0.1 percent, the fifth consecutive 12-month decline. (See table B.)

Intermediate energy: The index for intermediate energy goods increased 4.3 percent in September following a 4.4-percent advance in August. A 9.2-percent jump in diesel fuel prices was a major contributor to the September rise. Higher prices for gasoline and jet fuel also were significant factors in the increase in the intermediate energy goods index. (See table 2.)

Intermediate core: Prices for intermediate goods less foods and energy moved up 0.6 percent in September following four straight declines. Over half of this advance is attributable to the index for basic organic chemicals, which climbed 3.0 percent. An increase in prices for primary nonferrous metals also was a factor in the rise in the index for intermediate goods less foods and energy.

Intermediate foods: The index for intermediate foods and feeds advanced 2.0 percent in September, the seventh consecutive increase. Over three-fourths of the September rise can be traced to a 5.1-percent jump in prices for prepared animal feeds.

Crude goods

The Producer Price Index for crude materials for further processing moved up 2.8 percent in September. For the 3-month period ended in September, prices for crude materials advanced 10.7 percent following a 10.8-percent decrease from March to June. In September, the monthly increase in the crude goods index was broad based and led by prices for crude energy materials, which rose 4.4 percent. The indexes for crude foodstuffs and feedstuffs and for crude nonfood materials less energy both advanced 1.6 percent. (See table B.)

Crude energy: The index for crude energy materials increased 4.4 percent in September. From June to September, prices for crude energy materials moved up 15.2 percent subsequent to a 16.5-percent decrease for the 3 months ended in June. The monthly advance in September was led by an 11.4-percent jump in the crude petroleum index. Higher prices for coal also were a factor in the rise in the crude energy goods index. (See table 2.)

Crude foods: The index for crude foodstuffs and feedstuffs moved up 1.6 percent in September. From June to September, prices for crude foodstuffs and feedstuffs climbed 11.8 percent following a 7.0-percent decrease for the 3-month period ended in June. Nearly sixty percent of the September monthly increase can be traced to a 6.8-percent rise in prices for hay, hayseeds, and oilseeds. An advance in the index for slaughter steers and heifers also contributed to higher crude foods prices.

Crude core: The index for crude nonfood materials less energy rose 1.6 percent in September. For the 3 months ended in September, crude core prices advanced 2.6 percent after falling 6.9 percent from March to June. In September, nearly eighty-five percent of the monthly increase is attributable to the nonferrous metals index, which rose 2.5 percent. Higher prices for construction sand, gravel, and crushed stone also contributed to the advance in the crude core index.

Services Analysis

Trade industries: The Producer Price Index for the net output of total trade industries rose 0.9 percent in September following a 1.3-percent drop in August. (Trade indexes measure changes in margins received by wholesalers and retailers.) Leading this increase, margins received by wholesale trade industries moved up 1.6 percent. Higher margins received by grocery stores and by electronic shopping and mail-order houses also contributed to the advance in the total trade industries index.

Transportation and warehousing industries: The Producer Price Index for the net output of transportation and warehousing industries declined 1.0 percent in September following a 0.4- percent rise in August. This decrease can be mostly attributed to prices received by the scheduled passenger air transportation industry, which fell 7.3 percent. The indexes for deep sea freight transportation and nonscheduled air passenger chartering also were factors in the decline in the transportation and warehousing industries index.

Traditional service industries: The Producer Price Index for the net output of total traditional service industries decreased 0.2 percent in September after a 0.6-percent advance in August. Prices received by general medical and surgical hospitals, which moved down 1.1 percent, accounted for about seventy percent of this decline. Lower prices received by the industries for investment banking and securities dealing and for commercial banking also contributed to the decrease in the total traditional service industries index.