June 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 advanced 0.4 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.5 percent in May and declined 0.4 percent in April. On an unadjusted basis, the final demand index moved down 0.7 percent for the 12 months ended in June, the fifth straight 12-month decrease. (See table A.)

In June, nearly two-thirds of the increase in the final demand index can be attributed to prices for final demand goods, which rose 0.7 percent. The index for final demand services advanced 0.3 percent.

Within intermediate demand, prices for processed goods climbed 0.7 percent, the index for unprocessed goods jumped 1.2 percent, and prices for services moved up 0.4 percent. (See tables B and C.)

Final Demand

Final demand goods: The index for final demand goods moved up 0.7 percent in June after rising 1.3 percent a month earlier. Almost 60 percent of the broad-based advance in June is attributable to prices for final demand energy, which climbed 2.4 percent. The indexes for final demand goods less foods and energy and for final demand foods increased 0.4 percent and 0.6 percent, respectively.

Product detail: Thirty percent of the June advance in prices for final demand goods can be traced to the gasoline index, which rose 4.3 percent. Prices for chicken eggs, pharmaceutical preparations, residential electric power, residential natural gas, and cigarettes also moved higher. In contrast, the index for fresh and dry vegetables fell 6.0 percent. Prices for liquefied petroleum gas and electronic computers also decreased. (See table 4.)

Final demand services: The index for final demand services moved up 0.3 percent in June following no change in May. Over half of the broad-based advance can be traced to a 0.2-percent increase in the index for final demand services less trade, transportation, and warehousing. Margins for final demand trade services rose 0.2 percent, and the index for final demand transportation and warehousing services advanced 0.6 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Thirty percent of the June increase in the index for final demand services can be attributed to prices for loan services (partial), which climbed 2.4 percent. The indexes for machinery and equipment wholesaling, fuels and lubricants retailing, truck transportation of freight, deposit services (partial), and portfolio management also moved higher. Conversely, margins for food and alcohol wholesaling declined 3.7 percent. The indexes for traveler accommodation services and passenger car rental also declined.

Special grouping, Final demand less foods, energy, and trade: The index for final demand less foods, energy, and trade services rose 0.3 percent in June after edging down 0.1 percent in May. For the 12 months ended in June, prices for final demand less foods, energy, and trade services increased 0.7 percent.

Intermediate Demand by Commodity Type

Processed goods for intermediate demand: The index for processed goods for intermediate demand climbed 0.7 percent in June following a 1.0-percent rise in May. In June, over two-thirds of the broad-based advance is attributable to prices for processed energy goods, which increased 2.8 percent. The indexes for processed materials less foods and energy and for processed foods and feeds moved up 0.2 percent and 1.4 percent, respectively. For the 12 months ended in June, the index for processed goods for intermediate demand decreased 6.3 percent, the eighth consecutive 12-month drop. (See table B.)

Product detail: In June, a 2.6-percent rise in prices for electric power accounted for over a quarter of the increase in the index for processed goods for intermediate demand. Prices for processed eggs, basic organic chemicals, gasoline, lubricating oil base stocks, and utility natural gas also advanced. In contrast, the index for nonferrous mill shapes fell 2.6 percent. Prices for liquefied petroleum gas and prepared animal feeds also moved lower. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand moved up 1.2 percent in June after a 3.3-percent jump in May. In June, 60 percent of the broad-based increase can be traced to prices for unprocessed energy materials, which climbed 2.2 percent. The index for unprocessed foodstuffs and feedstuffs rose 1.0 percent, and prices for unprocessed nonfood materials less energy advanced 0.3 percent. For the 12 months ended in June, the index for unprocessed goods for intermediate demand fell 21.7 percent, the eleventh straight 12- month decline.

Product detail: In June, a 12.9-percent increase in natural gas prices accounted for over 80 percent of the rise in the index for unprocessed goods for intermediate demand. Prices for ungraded chicken eggs; carbon steel scrap; slaughter hogs; hay, hayseeds, and oilseeds; and raw milk also advanced. Conversely, the index for slaughter steers and heifers decreased 4.3 percent. Prices for crude petroleum and nonferrous scrap also moved down.

Services for intermediate demand: The index for services for intermediate demand moved up 0.4 percent in June following a 0.5-percent decline in May. The increase was primarily due to a 0.6- percent advance in prices for services less trade, transportation, and warehousing for intermediate demand. The index for transportation and warehousing services for intermediate demand also rose 0.6 percent. In contrast, the index for trade services for intermediate demand fell 0.4 percent. For the 12 months ended in June, prices for services for intermediate demand climbed 1.6 percent. (See table C.)

Product detail: In June, a 1.2-percent advance in the index for portfolio management was a major factor in the increase in prices for services for intermediate demand. The indexes for loan services (partial); courier, messenger, and U.S. postal services; deposit services (partial); co-employment staffing services; and fuels and lubricants retailing also moved up. Conversely, margins for food and alcohol wholesaling fell 3.7 percent. The indexes for securities brokerage, dealing, and investment advice and for machinery and equipment parts and supplies wholesaling also moved lower.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand moved up 0.4 percent in June, the largest increase since a 0.5-percent advance in March 2014. In June, prices for total goods inputs to stage 4 intermediate demand climbed 0.5 percent, and the index for total services inputs moved up 0.3 percent. (See table D.) Higher prices for electric power, loan services (partial), portfolio management, biological products, gasoline, and processed eggs outweighed declines in the indexes for machinery and equipment parts and supplies wholesaling; food and alcohol wholesaling; and strawberries. (See table 6.) For the 12 months ended in June, the stage 4 intermediate demand index decreased 0.9 percent, the sixth consecutive 12-month decline.

Stage 3 intermediate demand: The index for stage 3 intermediate demand advanced 0.7 percent in June following a 1.2-percent rise a month earlier. In June, prices for total goods inputs to stage 3 intermediate demand increased 1.2 percent, and the index for total services inputs moved up 0.2 percent. Higher prices for ungraded chicken eggs; gasoline; slaughter hogs; primary basic organic chemicals; raw milk; and courier, messenger, and U.S. postal services outweighed declines in the indexes for slaughter steers and heifers, slaughter chickens, and food and alcohol wholesaling. For the 12 months ended in June, prices for stage 3 intermediate demand decreased 4.2 percent, the sixth consecutive 12-month decline.

Stage 2 intermediate demand: The index for stage 2 intermediate demand increased 0.5 percent in June, the third consecutive advance. In June, prices for total goods inputs to stage 2 intermediate demand rose 0.6 percent, and the index for total services inputs advanced 0.4 percent. Increases in the indexes for natural gas; plastic resins and materials; co-employment staffing services; courier, messenger, and U.S. postal services; hay, hayseeds, and oilseeds; and portfolio management outweighed lower prices for crude petroleum; securities brokerage, dealing, and investment advice; and liquefied petroleum gas. For the 12 months ended in June, the stage 2 intermediate demand index fell 12.2 percent.

Stage 1 intermediate demand: The index for stage 1 intermediate demand moved up 0.7 percent in June after a 0.6-percent rise in May. In June, the index for total goods inputs to stage 1 intermediate demand increased 1.0 percent, and prices for total services inputs moved up 0.3 percent. Higher prices for carbon steel scrap, primary basic organic chemicals, electric power, loan services (partial), processed eggs, and gasoline outweighed declines in the indexes for nonferrous scrap, corn, and passenger car rental. For the 12 months ended in June, the index for stage 1 intermediate demand dropped 7.4 percent, the eighth consecutive 12-month decrease.

Resampling of Industries

Effective with the release of data for June 2015, the Producer Price Index (PPI) includes data for 29 resampled industries classified according to the 2012 North American Industry Classification System (NAICS). The Bureau of Labor Statistics periodically updates the sample of producers providing data for the PPI to reflect current conditions more accurately when the structure, membership, technology, or product mix of an industry shifts. The first results of this systematic process were published in July 1986, with subsequent efforts having been completed at semi-annual intervals through January 2015. Effective with this release, 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 results in indexes that better represent current industry production and improves data quality.

For information on specific index additions, deletions, and recodes effective this month, see the June 2015 issue of the PPI Detailed Report online at www.bls.gov/ppi/ppidr201506.pdf, or contact the PPI's Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-7705.

NAICS Code Industry 212113 Anthracite mining 212311 Dimension stone mining and quarrying 212319 Other crushed and broken stone mining 311225 Fats and oils refining and blending 311351 Chocolate and confectionery manufacturing from cacao 311930 Flavoring syrup and concentrate manufacturing 312111 Soft drink manufacturing 314120 Curtain and linen mills 316998 All other leather and allied good manufacturing 324110 Petroleum refineries 324121 Asphalt paving mixture and block manufacturing 324199 All other petroleum and coal products manufacturing 325991 Custom compounding of purchased resins 327120 Clay building material and refractories manufacturing 327310 Cement manufacturing 327999 Miscellaneous nonmetallic mineral products manufacturing 332721 Precision turned product manufacturing 332999 Miscellaneous fabricated metal product manufacturing 334413 Semiconductors and related device manufacturing 335129 Other lighting equipment manufacturing 335311 Electric power and specialty transformer manufacturing 335999 Miscellaneous electrical equipment manufacturing 336320 Motor vehicle electrical and electronic equipment manufacturing 336413 Other aircraft parts and equipment manufacturing 337124 Metal household furniture manufacturing 443141 Household appliance stores 448100 Clothing stores* 482111 Line-haul railroads 488320 Marine cargo handling

* This code combines data formerly included under NAICS 448110, 448120, and 448140.