March 2015 Producer Price Index

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

The Producer Price Index for final demand increased 0.2 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved down 0.5 percent in February and 0.8 percent in January. On an unadjusted basis, the index for final demand decreased 0.8 percent for the 12 months ended in March. (See table A.)

In March, more than half of the rise in final demand prices can be attributed to a 0.3-percent advance in the index for final demand goods. Prices for final demand services moved up 0.1 percent.

Within intermediate demand, prices for processed goods edged down 0.1 percent, the index for unprocessed goods dropped 1.7 percent, and prices for services rose 0.2 percent. (See tables B and C.)

Final Demand

Final demand goods: The index for final demand goods moved up 0.3 percent in March following eight consecutive decreases. A major factor in the advance was prices for final demand energy, which rose 1.5 percent. The index for final demand goods less foods and energy increased 0.2 percent in March. In contrast, prices for final demand foods fell 0.8 percent.

Product detail: Leading the March advance in prices for final demand goods, the index for gasoline jumped 7.2 percent. Prices for motor vehicles, jet fuel, pharmaceutical preparations, basic organic chemicals, and beef and veal also moved higher. Conversely, the index for pork declined 5.1 percent. Prices for utility natural gas and for plastic resins and materials also fell. (See table 4.)

Final demand services: The index for final demand services inched up 0.1 percent in March following a 0.5-percent decrease in February. The advance can be traced to prices for final demand services less trade, transportation, and warehousing, which rose 0.3 percent. In contrast, the indexes for final demand transportation and warehousing services and for final demand trade services both declined 0.2 percent in March. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Over 60 percent of the March increase in the index for final demand services can be attributed to prices for portfolio management, which jumped 4.1 percent. The indexes for loan services (partial), food wholesaling, wireless telecommunication services, and gaming receipts (partial) also moved higher. Conversely, margins for machinery, equipment, parts, and supplies wholesaling decreased 0.7 percent. The indexes for apparel, jewelry, footwear, and accessories retailing; physician care; and rail transportation of freight and mail also declined.

Special grouping, Final demand less foods, energy, and trade: The index for final demand less foods, energy, and trade services advanced 0.2 percent in March after no change in February. For the 12 months ended in March, prices for final demand less foods, energy, and trade services rose 0.8 percent.

Intermediate Demand by Commodity Type

Processed goods for intermediate demand: The index for processed goods for intermediate demand edged down 0.1 percent in March, the eighth consecutive decline. Leading the March decrease, prices for processed materials less foods and energy moved down 0.2 percent. The index for processed foods and feeds fell 0.8 percent. In contrast, prices for processed energy goods rose 0.5 percent. For the 12 months ended in March, the index for processed goods for intermediate demand dropped 6.7 percent, the largest 12-month decrease since a 7.7-percent decline in October 2009. (See table B.)

Product detail: In March, a 4.0-percent decrease in prices for plastic resins and materials accounted for three-quarters of the decline in the index for processed goods for intermediate demand. The indexes for electric power, steel mill products, utility natural gas, and prepared animal feeds also moved lower. Conversely, prices for gasoline advanced 7.2 percent. The indexes for basic organic chemicals, jet fuel, and beef and veal also increased. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand fell 1.7 percent in March, the sixth straight decrease. Leading the broad-based decline in March, prices for unprocessed foodstuffs and feedstuffs moved down 1.4 percent. The indexes for unprocessed nonfood materials less energy and for unprocessed energy materials fell 2.3 percent and 1.4 percent, respectively. For the 12 months ended in March, the index for unprocessed goods for intermediate demand decreased 26.5 percent, the largest 12-month decline since a 31.7-percent drop in September 2009.

Product detail: A major factor in the March decline in the index for unprocessed goods for intermediate demand was prices for hay, hayseeds, and oilseeds, which fell 4.2 percent. The indexes for crude petroleum, iron and steel scrap, corn, raw milk, and unprocessed finfish also decreased. In contrast, the index for slaughter poultry moved up 3.4 percent. Prices for natural gas and copper ores also moved higher.

Services for intermediate demand: The index for services for intermediate demand advanced 0.2 percent in March following a 0.1-percent rise in February. Leading the March increase, prices for services less trade, transportation, and warehousing for intermediate demand climbed 0.4 percent. The index for trade services for intermediate demand rose 0.2 percent. Conversely, prices for transportation and warehousing services for intermediate demand fell 0.4 percent. For the 12 months ended in March, the index for services for intermediate demand advanced 1.0 percent, the smallest 12-month increase since a 1.0-percent rise in April 2014. (See table C.)

Product detail: In March, a 2.3-percent advance in the index for loan services (partial) was a major factor in the rise in prices for services for intermediate demand. The indexes for portfolio management; food wholesaling; securities brokerage, dealing, and investment advice; gross rents for office buildings; and wireless telecommunication services also moved higher. In contrast, prices for courier, messenger, and U.S. postal services fell 0.5 percent. The indexes for building materials, paint, and hardware wholesaling and for deposit services (partial) also decreased. Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand edged up 0.1 percent in March following four consecutive declines. In March, prices for total services inputs to stage 4 intermediate demand rose 0.5 percent. Conversely, the index for total goods inputs decreased 0.2 percent. (See table D.) Increases in the indexes for portfolio management, gasoline, diesel fuel, food wholesaling, and gross rents for office buildings outweighed declines in the indexes for electric power; building materials, paint, and hardware wholesaling; unprocessed finfish; and plastic packaging products. (See table 6.) For the 12 months ended in March, prices for stage 4 intermediate demand fell 1.1 percent.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand moved up 0.2 percent in March following five straight decreases. In March, the index for total goods inputs to stage 3 intermediate demand climbed 0.3 percent while prices for total services inputs were unchanged. Increases in the indexes for gasoline, jet fuel, slaughter poultry, basic organic chemicals, loan services (partial), and food wholesaling outweighed declines in prices for raw milk; slaughter hogs; and courier, messenger, and U.S. postal services. For the 12 months ended in March, prices for stage 3 intermediate demand moved down 5.6 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand decreased 0.5 percent in March following a 0.2-percent decline in February. In March, prices for total goods inputs to stage 2 intermediate demand fell 1.5 percent. In contrast, the index for total services inputs moved up 0.2 percent. Lower prices for crude petroleum; plastic resins and materials; steel mill products; hay, hayseeds, and oilseeds; prepared animal feeds; and courier, messenger, and U.S. postal services outweighed higher prices for portfolio management, natural gas, and basic organic chemicals. For the 12 months ended in March, the index for stage 2 intermediate demand dropped 13.7 percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand fell 0.2 percent in March, the seventh straight decline. In March, the index for total goods inputs to stage 1 intermediate demand decreased 0.4 percent. Conversely, prices for total services inputs moved up 0.2 percent. Decreases in the indexes for iron and steel scrap; nonferrous scrap; electric power; building materials, paint, and hardware wholesaling; corn; and utility natural gas outweighed advances in prices for loan services (partial), basic organic chemicals, and diesel fuel. For the 12 months ended in March, prices for stage 1 intermediate demand decreased 7.5 percent.

PPI to Update Samples More Frequently

The Producer Price Index (PPI) periodically updates the sample of producers providing index data in order to reflect current conditions more accurately when the structure, membership, technology, or product mix of an industry shifts. Since 1986, these sample changes have been updated at semi-annual intervals, with the release of data for January and July. Effective with the release of PPI data for June 2015 on July 15, 2015, PPI will update samples on a tri-annual basis, coinciding with the release of data for February, June, and October (in March, July, and November, respectively). This accelerated approach to replacing industry samples will result in indexes that better represent current industry production and will improve data quality.

With each sample update, PPI will continue to publish a notice listing the impacted industries in both the PPI News Release and PPI Detailed Report. In addition, PPI will continue to publish information on specific index additions, deletions, and recodes associated with the updated samples in the PPI Detailed Report.