April 2013 Producer Price Index

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The Producer Price Index for finished goods decreased 0.7 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods fell 0.6 percent in March and increased 0.7 percent in February. At the earlier stages of processing, prices received by manufacturers of intermediate goods declined 0.6 percent, and the crude goods index moved down 0.4 percent. On an unadjusted basis, prices for finished goods advanced 0.6 percent for the 12 months ended April 2013, the smallest 12-month rise since a 0.5-percent increase in July 2012. (See table A.)

Stage-of-Processing Analysis

Finished goods

In April, over eighty percent of the decrease in the finished goods index can be traced to a 2.5- percent drop in prices for finished energy goods. Also contributing to the decline in finished goods prices, the index for finished consumer foods fell 0.8 percent. By contrast, prices for finished goods less foods and energy advanced 0.1 percent in April.

Finished energy: The index for finished energy goods moved down 2.5 percent in April after falling 3.4 percent in March. Over ninety percent of the April decrease is attributable to gasoline prices, which dropped 6.0 percent. Lower prices for home heating oil and residential electric power also were factors in the decline in the index for finished energy goods. (See table 2.)

Finished foods: Prices for finished consumer foods moved down 0.8 percent in April, the largest decrease since a 1.0-percent drop in May 2011. Half of the April decline can be traced to the index for fresh and dry vegetables, which fell 10.6 percent. Lower meat prices also were a major factor in the decrease in the index for finished consumer foods.

Finished core: The index for finished goods less foods and energy inched up 0.1 percent in April following increases of 0.2 percent in each of the previous four months. Leading the April rise, prices for pharmaceutical preparations climbed 0.6 percent.

Intermediate goods

The Producer Price Index for intermediate materials, supplies, and components fell 0.6 percent in April subsequent to a 0.9-percent decrease a month earlier. Accounting for over two-thirds of the broad-based decline in April, prices for intermediate energy goods dropped 2.1 percent. The index for intermediate goods less foods and energy moved down 0.2 percent, and prices for intermediate foods and feeds fell 0.9 percent. For the 12 months ended in April, the intermediate goods index decreased 1.0 percent, the largest year-over-year decline since a 1.0- percent drop in August 2012. (See table B.)

Intermediate energy: Prices for intermediate energy goods fell 2.1 percent in April after a 4.7- percent decline in March. A major factor in the April decrease was the index for diesel fuel, which moved down 3.5 percent. Lower prices for gasoline and jet fuel also contributed significantly to the decline in the index for intermediate energy goods. (See table 2.)

Intermediate core: The index for intermediate goods less foods and energy moved down 0.2 percent in April following four consecutive advances. Leading this decline, prices for primary basic organic chemicals dropped 5.3 percent. Falling prices for plastic resins and materials also contributed to the decrease in the intermediate core index.

Intermediate foods: Prices for intermediate foods and feeds moved down 0.9 percent in April following a 0.1-percent increase in the prior month. Nearly three-quarters of the April decline was the result of a 2.6-percent decrease in the prepared animal feeds index.

Crude goods

The Producer Price Index for crude materials for further processing declined 0.4 percent in April. For the 3 months ended in April, crude goods prices moved down 3.2 percent subsequent to a 2.6-percent increase for the 3 months ended in January. The April monthly decrease was led by the index for crude foodstuffs and feedstuffs, which fell 2.6 percent. Prices for crude nonfood materials less energy moved down 2.8 percent. By contrast, the crude energy materials index advanced 3.7 percent. (See table B.)

Crude foods: Prices for crude foodstuffs and feedstuffs moved down 2.6 percent in April. From January to April, the index for crude foods decreased 2.9 percent compared with a 0.5- percent rise from October to January. In April, about seventy percent of the monthly decline is attributable to prices for corn, which fell 11.5 percent. Decreases in the indexes for hay, hayseeds, and oilseeds and for fresh vegetables, except potatoes, also were factors in the drop in crude foods prices. (See table 2.)

Crude core: In April, prices for crude nonfood materials less energy decreased 2.8 percent. For the 3 months ended in April, the crude core index fell 3.5 percent after rising 2.8 percent in the previous 3-month period. Accounting for more than one-third of the monthly decline in April, nonferrous metals prices moved down 2.6 percent. Lower prices for corn also were a factor in the crude core decrease.

Crude energy: The index for crude energy materials increased 3.7 percent in April. From January to April, crude energy prices dropped 3.0 percent compared with a 4.7-percent climb for the 3 months ended in January. The April monthly advance is mostly attributable to a 15.5- percent jump in the index for natural gas.

Services Analysis

Trade industries: The Producer Price Index for the net output of total trade industries advanced 1.6 percent in April, the largest increase since a 1.6-percent increase in August 2011. (Trade indexes measure changes in margins received by wholesalers and retailers.) Forty percent of the April rise is attributable to margins received by merchant wholesalers of durable goods, which advanced 2.7 percent. Higher margins received by discount department stores and gasoline stations also contributed to the increase in the total trade industries index.

Transportation and warehousing industries: The Producer Price Index for the net output of transportation and warehousing industries moved down 0.3 percent in April after rising 0.7 percent in March. Leading the decrease, prices for scheduled air transportation fell 1.8 percent. Lower prices received by the industry groups for truck transportation and inland water transportation also were factors in the decline in the transportation and warehousing industries index.

Services less trade, transportation, and warehousing: The Producer Price Index for the net output of services less trade, transportation, and warehousing moved up 0.4 percent in April after declining 0.3 percent in March. Nearly a quarter of this increase is attributable to a 4.3- percent advance in the index for wireless telecommunications carriers. Higher prices received by the industries for portfolio management and commercial banking also contributed to the rise in the index for services less trade, transportation, and warehousing.