June 2013 Producer Price Index

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The Producer Price Index for finished goods increased 0.8 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods rose 0.5 percent in May and fell 0.7 percent in April. At the earlier stages of processing, prices received by manufacturers of intermediate goods advanced 0.5 percent in June, and the crude goods index was unchanged. On an unadjusted basis, prices for finished goods moved up 2.5 percent for the 12 months ended June 2013, the largest 12-month rise since a 2.8-percent increase in March 2012. (See table A.)

Stage-of-Processing Analysis

Finished goods

In June, most of the broad-based rise in finished goods prices can be traced to the index for finished energy goods, which increased 2.9 percent. Also contributing to the advance in finished goods prices, the indexes for finished goods less foods and energy and for finished consumer foods both moved up 0.2 percent.

Finished energy: Prices for finished energy goods climbed 2.9 percent in June, the largest rise since a 3.2-percent increase in February 2013. The June advance is mostly attributable to a 7.2- percent jump in the index for gasoline. Higher prices for home heating oil and diesel fuel also contributed to 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 June, the eighth consecutive advance. A major contributor to the June increase were prices for passenger cars, which rose 0.8 percent. An advance in the index for light motor trucks also was a factor in higher finished core prices.

Finished foods: Prices for finished consumer foods advanced 0.2 percent in June following a 0.6-percent increase in May. The June rise was led by the index for meats, which moved up 4.2 percent.

Intermediate goods

The Producer Price Index for intermediate materials, supplies, and components advanced 0.5 percent in June after three consecutive declines. Accounting for over eighty percent of the broad-based increase, prices for intermediate energy goods rose 2.0 percent. The index for intermediate materials less foods and energy inched up 0.1 percent, and prices for intermediate foods and feeds climbed 0.7 percent. For the 12 months ended in June, the intermediate goods index advanced 1.1 percent, the first 12-month increase since a 1.3-percent rise in February 2013. (See table B.)

Intermediate energy: Prices for intermediate energy goods increased 2.0 percent in June following a 0.5-percent rise in May. A major factor in the June advance was the electric power index, which moved up 0.5 percent. Higher prices for gasoline and jet fuel also were factors in the increase in the intermediate energy goods index. (See table 2.)

Intermediate core: The index for intermediate materials less foods and energy inched up 0.1 percent in June after two consecutive declines. Most of the June rise can be attributed to a 1.1- percent increase in the index for basic organic chemicals. Higher prices for converted paper and paperboard products also contributed significantly to the advance in the intermediate core index.

Intermediate foods: Prices for intermediate foods and feeds climbed 0.7 percent in June following a 1.1-percent rise in the prior month. A major factor in the June increase was a 1.5- percent advance in the index for processed poultry. Higher prices for meats also contributed significantly to the rise in the index for intermediate foods and feeds.

Crude goods

The Producer Price Index for crude materials for further processing was unchanged in June. For the 3 months ended in June, prices for crude goods moved up 1.7 percent after falling 1.8 percent for the 3 months ended in March. On a monthly basis in June, a 0.3-percent increase in the crude energy materials index and a 0.1-percent advance in prices for crude nonfood materials less energy offset a 0.3-percent decrease in the index for crude foodstuffs and feedstuffs. (See table B.)

Crude energy: Prices for crude energy materials rose 0.3 percent in June. In the second quarter of 2013, the index for crude energy materials jumped 9.2 percent compared with a 4.0-percent decrease in the first quarter. The monthly advance in June can be traced to prices for crude petroleum, which increased 1.7 percent. (See table 2.)

Crude core: The index for crude nonfood materials less energy inched up 0.1 percent in June. From March to June, crude core prices fell 4.9 percent subsequent to a 0.9-percent decline in the prior quarter. In June, the monthly advance was led by a 2.0-percent increase in the index for nonferrous scrap. Higher prices for construction sand, gravel, and crushed stone also contributed to the rise in the crude core index.

Crude foods: Prices for crude foodstuffs and feedstuffs decreased 0.3 percent in June. In the second quarter, the index for crude foods moved down 0.9 percent after falling 0.6 percent for the 3 months ended in March. The monthly decline in June was led by a 3.8-percent drop in prices for slaughter steers and heifers. Lower prices for raw milk and unprocessed finfish also were factors in the decrease in the index for crude foodstuffs and feedstuffs.

Services Analysis

Trade industries: The Producer Price Index for the net output of total trade industries moved down 0.5 percent in June following a 0.9-percent decrease a month earlier. (Trade indexes measure changes in margins received by wholesalers and retailers.) Leading the June decline, margins received by discount department stores fell 15.2 percent. Lower margins received by family clothing stores and merchant wholesalers of durable goods 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 rose 0.6 percent in June after a 0.6-percent decrease in May. Most of the increase is attributable to a 3.0-percent jump in prices received by the industry for scheduled passenger air transportation. Higher prices received by the industries for long distance general freight trucking and freight transportation arrangement also were factors in the advance 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 June, the third consecutive increase. Accounting for about forty percent of the June advance, prices received by the industry group for depository credit intermediation rose 1.9 percent. Higher prices received by investment bankers and securities dealers and by the passenger car rental industry also contributed to the advance in the index for services less trade, transportation, and warehousing.