April 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 fell 0.4 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.2 percent in March and decreased 0.5 percent in February. On an unadjusted basis, the index for final demand declined 1.3 percent for the 12 months ended in April. (See table A.)

In April, more than 70 percent of the decrease in final demand prices can be attributed to a 0.7- percent decline in the index for final demand goods. Prices for final demand services edged down 0.1 percent.

Within intermediate demand, prices for processed goods fell 1.1 percent, the index for unprocessed goods moved up 0.9 percent, and prices for services advanced 0.5 percent. (See tables B and C.)

Final Demand

Final demand goods: The index for final demand goods moved down 0.7 percent in April following a 0.3-percent rise in March. Leading the broad-based decline, prices for final demand energy fell 2.9 percent. The indexes for final demand foods and for final demand goods less foods and energy decreased 0.9 percent and 0.1 percent, respectively.

Product detail: Over 30 percent of the April decline in prices for final demand goods can be attributed to the index for gasoline, which decreased 4.7 percent. Prices for diesel fuel, jet fuel, utility natural gas, pork, and industrial chemicals also moved lower. In contrast, the index for pharmaceutical preparations advanced 0.5 percent. Prices for fresh and dry vegetables and for raw cotton also moved up. (See table 4.)

Final demand services: The index for final demand services edged down 0.1 percent in April after inching up 0.1 percent in March. Leading the decrease, margins for final demand trade services fell 0.8 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) The index for final demand transportation and warehousing services declined 0.1 percent. Conversely, prices for final demand services less trade, transportation, and warehousing rose 0.2 percent.

Product detail: Over 40 percent of the April decrease in the index for final demand services can be traced to margins for machinery and equipment wholesaling, which declined 1.0 percent. The indexes for automotive fuels and lubricants retailing; health, beauty, and optical goods retailing; portfolio management; and food and alcohol retailing also moved lower. In contrast, prices for securities brokerage, dealing, investment advice, and related services climbed 4.0 percent. The indexes for food wholesaling, inpatient care, and passenger car rental also advanced.

Special grouping, Final demand less foods, energy, and trade: The index for final demand less foods, energy, and trade services edged up 0.1 percent in April after rising 0.2 percent in March. For the 12 months ended in April, prices for final demand less foods, energy, and trade services climbed 0.7 percent.

Intermediate Demand by Commodity Type

Processed goods for intermediate demand: The index for processed goods for intermediate demand fell 1.1 percent in April, the ninth consecutive decline. Accounting for over half of the broad-based April decrease, prices for processed energy goods dropped 3.4 percent. The index for processed materials less foods and energy moved down 0.5 percent, and prices for processed foods and feeds fell 1.7 percent. For the 12 months ended in April, the index for processed goods for intermediate demand dropped 7.8 percent, the largest 12-month decrease since a 12.0-percent decline in September 2009. (See table B.)

Product detail: In April, a 12.0-percent decrease in prices for diesel fuel accounted for nearly a quarter of the decline in the index for processed goods for intermediate demand. The indexes for industrial chemicals, gasoline, steel mill products, jet fuel, and prepared animal feeds also moved lower. Conversely, prices for ready-mix concrete advanced 2.2 percent. The indexes for lubricating oil base stocks and prepared poultry also increased. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand moved up 0.9 percent in April, following six straight decreases. Over 70 percent of the advance can be attributed to prices for unprocessed energy materials, which rose 1.7 percent. The index for unprocessed foodstuffs and feedstuffs moved up 0.5 percent, and prices for unprocessed nonfood materials less energy were unchanged. For the 12 months ended in April, the index for unprocessed goods for intermediate demand decreased 26.6 percent, the largest 12-month decline since a 31.7-percent drop in September 2009.

Product detail: Leading the April increase in the index for unprocessed goods for intermediate demand, prices for crude petroleum jumped 13.1 percent. The indexes for slaughter chickens, raw cotton, slaughter steers and heifers, slaughter barrows and gilts, and carbon steel scrap also moved higher. In contrast, the index for natural gas fell 11.8 percent. Prices for corn and ungraded chicken eggs also dropped.

Services for intermediate demand: The index for services for intermediate demand moved up 0.5 percent in April, the third consecutive increase. Leading the April advance, prices for services less trade, transportation, and warehousing for intermediate demand rose 0.7 percent. The index for transportation and warehousing services for intermediate demand edged up 0.1 percent. Conversely, margins for trade services for intermediate demand inched down 0.1 percent. For the 12 months ended in April, the index for services for intermediate demand advanced 1.8 percent, the largest 12- month increase since a 1.8-percent rise in December 2014. (See table C.)

Product detail: In April, a 4.0-percent advance in the index for securities brokerage, dealing, investment advice, and related services accounted for half of the rise in prices for services for intermediate demand. The indexes for loan services (partial), television advertising time sales, passenger car rental, food wholesaling, and air courier and package delivery services (excluding USPS) also moved higher. In contrast, margins for hardware, building materials, and supplies retailing fell 2.3 percent. The indexes for portfolio management and long-distance motor carrying also decreased.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand declined 0.2 percent in April after inching up 0.1 percent in March. In April, prices for total goods inputs to stage 4 intermediate demand fell 0.6 percent. Conversely, the index for total services inputs rose 0.2 percent. (See table D.) Declines in the indexes for diesel fuel; portfolio management; gasoline; industrial chemicals; hardware, building materials, and supplies retailing; and steel mill products outweighed advances in the indexes for securities brokerage, dealing, investment advice, and related services; loan services (partial); and ready-mix concrete. (See table 6.) For the 12 months ended in April, prices for stage 4 intermediate demand fell 1.3 percent, the fourth consecutive 12-month decline.

Stage 3 intermediate demand: The index for stage 3 intermediate demand moved down 0.5 percent in April following a 0.2-percent rise a month earlier. In April, prices for total goods inputs to stage 3 intermediate demand fell 1.1 percent. In contrast, the index for total services inputs increased 0.3 percent. Decreases in the indexes for jet fuel, gasoline, diesel fuel, industrial chemicals, ungraded chicken eggs, and chemicals and allied products wholesaling outweighed increases in prices for slaughter chickens; securities brokerage, dealing, investment advice, and related services; and slaughter barrows and gilts. For the 12 months ended in April, prices for stage 3 intermediate demand moved down 6.2 percent, the fourth consecutive 12-month decline.

Stage 2 intermediate demand: The index for stage 2 intermediate demand edged up 0.1 percent in April following a 0.5-percent decline in March. In April, prices for total services inputs to stage 2 intermediate demand rose 0.6 percent. Conversely, the index for total goods inputs decreased 0.2 percent. Advances in the indexes for securities brokerage, dealing, investment advice, and related services; crude petroleum; television advertising time sales; network compensation from broadcast and cable television; and investment banking outweighed lower prices for natural gas, steel mill products, industrial chemicals, and portfolio management. For the 12 months ended in April, the index for stage 2 intermediate demand dropped 13.5 percent, the tenth consecutive 12-month decline.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand fell 0.7 percent in April, the eighth straight decline. In April, the index for total goods inputs to stage 1 intermediate demand dropped 1.7 percent. In contrast, prices for total services inputs moved up 0.6 percent. Declines in the indexes for diesel fuel, industrial chemicals, natural gas, gasoline, aluminum base scrap, and chemicals and allied products wholesaling outweighed rising prices for securities brokerage, dealing, investment advice, and related services; crude petroleum; and loan services (partial). For the 12 months ended in April, prices for stage 1 intermediate demand dropped 8.0 percent, the sixth consecutive 12-month decrease.

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.