February 2013 Producer Price Index

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The Producer Price Index for finished goods increased 0.7 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods moved up 0.2 percent in January and declined 0.3 percent in December. At the earlier stages of processing, the index for intermediate goods advanced 1.3 percent in February, and crude goods prices decreased 0.3 percent. On an unadjusted basis, the finished goods index moved up 1.7 percent for the 12 months ended February 2013, the largest 12-month increase since a 2.3-percent rise in October 2012. (See table A.)

Stage-of-Processing Analysis

Finished goods

In February, the advance in finished goods prices was led by the index for finished energy goods, which rose 3.0 percent. Also contributing to the increase in finished goods prices, the index for finished goods less foods and energy moved up 0.2 percent. By contrast, prices for finished consumer foods fell 0.5 percent.

Finished energy: The index for finished energy goods climbed 3.0 percent in February after four straight decreases. Gasoline prices accounted for most of this advance, jumping 7.2 percent. The indexes for home heating oil and diesel fuel also were factors in the increase in finished energy goods prices. (See table 2.)

Finished core: The index for finished goods less foods and energy rose 0.2 percent, the fourth consecutive advance. About twenty percent of the February increase can be traced to prices for pharmaceutical preparations, which moved up 0.2 percent. An advance in the index for plastic products also contributed to higher prices for finished goods less foods and energy.

Finished foods: Prices for finished consumer foods declined 0.5 percent in February subsequent to moving up 0.7 percent in the previous month. The index for fresh and dry vegetables accounted for most of the decrease, falling 18.0 percent.

Intermediate goods

The Producer Price Index for intermediate materials, supplies, and components moved up 1.3 percent in February, the largest increase since a 1.4-percent jump in April 2011. Nearly two-thirds of the February increase can be attributed to higher prices for intermediate energy goods, which climbed 3.6 percent. The index for intermediate materials less foods and energy rose 0.7 percent, while prices for intermediate foods and feeds were unchanged. For the 12 months ended in February, the index for intermediate goods moved up 1.2 percent, the largest increase since a 2.9- percent advance in March 2012. (See table B.)

Intermediate energy: Prices for intermediate energy goods advanced 3.6 percent in February, the largest increase since a 5.6-percent rise in January 2010. A major factor in the February advance was a 6.1-percent jump in the diesel fuel index. Higher prices for gasoline and jet fuel also contributed to the increase in the intermediate energy goods index. (See table 2.)

Intermediate core: The index for intermediate goods less foods and energy rose 0.7 percent in February, the largest advance since a 0.7-percent climb in March 2012. About eighty percent of the February increase can be attributed to a 5.4-percent jump in prices for basic organic chemicals. A rise in the index for plastic resins and materials also contributed to higher intermediate core prices.

Intermediate foods: Prices for intermediate foods and feeds were unchanged in February following three consecutive declines. In February, an advance in the index for prepared animal feeds offset decreases in prices for natural, processed, and imitation cheese and for flour and flour-base mixes and doughs.

Crude goods

The Producer Price Index for crude materials for further processing moved down 0.3 percent in February. For the 3 months ended in February, prices for crude goods advanced 1.9 percent compared with a 2.0-percent increase for the 3 months ended in November. The monthly decrease in February was led by the index for crude foodstuffs and feedstuffs, which fell 2.1 percent. Prices for crude nonfood materials less energy declined 1.7 percent. By contrast, the index for crude energy materials rose 2.2 percent. (See table B.)

Crude foods: The index for crude foodstuffs and feedstuffs fell 2.1 percent in February. From November to February, prices for crude foodstuffs and feedstuffs moved down 2.1 percent subsequent to a 3.4-percent advance from August to November. In February, nearly half of the monthly decrease can be traced to a 5.7-percent drop in corn prices. Lower prices for fresh vegetables (except potatoes) and slaughter poultry also were major factors in the decline in the index for crude foodstuffs and feedstuffs. (See table 2.)

Crude core: Prices for crude nonfood materials less energy decreased 1.7 percent in February. For the 3 months ended in February, the index for crude nonfood materials less energy moved down 0.6 percent compared with a 0.7-percent advance for the 3 months ended in November. Nearly half of the monthly decline in February is attributable to prices for carbon steel scrap, which fell 3.7 percent. Lower prices for iron ore also were a contributor to the decrease in the crude core index.

Crude energy: Prices for crude energy materials rose 2.2 percent in February. From November to February, the index for crude energy materials climbed 7.2 percent subsequent to a 1.7-percent advance from August to November. In February, the over-the-month rise can be traced to a 6.3- percent jump in the index for crude petroleum.

Services Analysis

Trade industries: The Producer Price Index for the net output of total trade industries moved down 0.8 percent in February, the third straight decline. (Trade indexes measure changes in margins received by wholesalers and retailers.) Leading the February decrease, margins received by wholesale trade industries fell 1.8 percent. Lower margins received by discount department stores and by electronic shopping and mail-order houses also contributed 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 was unchanged in February following a 1.0-percent rise in January. In February, higher prices received by the U.S. Postal Service and the truck transportation industry group offset lower prices received by the air transportation industry group and inland water freight transporters.

Services less trade, transportation, and warehousing: The Producer Price Index for the net output of services less trade, transportation, and warehousing rose 0.3 percent in February subsequent to a 0.5-percent advance a month earlier. Accounting for over thirty percent of the February increase, prices received by general medical and surgical hospitals moved up 0.7 percent. Higher prices received by the industries for commercial banking and passenger car rental also contributed to the increase in the index for services less trade, transportation, and warehousing.