November 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 0.3 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices decreased 0.4 percent in October and 0.5 percent in September. On an unadjusted basis, the final demand index fell 1.1 percent for the 12 months ended in November, the tenth consecutive 12-month decline. (See table A.)

The November rise in the final demand index can be traced to prices for final demand services, which advanced 0.5 percent. In contrast, the index for final demand goods moved down 0.1 percent.

Within intermediate demand, the index for processed goods fell 0.6 percent, prices for unprocessed goods dropped 5.1 percent, and the index for services was unchanged. (See tables B and C.)

Final Demand

Final demand services: The index for final demand services advanced 0.5 percent in November following two consecutive decreases. Nearly 80 percent of the broad-based increase can be traced to margins for final demand trade services, which climbed 1.2 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand services less trade, transportation, and warehousing and for final demand transportation and warehousing services also moved higher, rising 0.1 percent and 0.3 percent, respectively.

Product detail: Over 40 percent of the November advance in prices for final demand services is attributable to a 6.2-percent increase in margins for apparel, jewelry, footwear, and accessories retailing. The indexes for machinery and equipment wholesaling, loan services (partial), fuels and lubricants retailing, portfolio management, and long-distance motor carrying also moved higher. Conversely, prices for securities brokerage, dealing, investment advice, and related services fell 3.9 percent. The indexes for food and alcohol retailing and for water transportation of freight also fell. (See table 4.)

Final demand goods: The index for final demand goods inched down 0.1 percent in November, the fifth consecutive decrease. Over 90 percent of the November decline can be traced to prices for final demand energy, which fell 0.6 percent. The index for final demand goods less foods and energy edged down 0.1 percent. In contrast, prices for final demand foods rose 0.3 percent.

Product detail: Half of the November decrease in the index for final demand goods is attributable to prices for gasoline, which fell 1.3 percent. The indexes for residential natural gas, electric power, carbon steel scrap, and corn also moved lower. Conversely, prices for fresh fruits and melons jumped 11.6 percent. The indexes for eggs for fresh use, jet fuel, and pharmaceutical preparations also increased.

Special grouping, Final demand less foods, energy, and trade: The index for final demand less foods, energy, and trade services inched up 0.1 percent in November. For the 12 months ended in November, prices for final demand less foods, energy, and trade services advanced 0.3 percent.

Intermediate Demand by Commodity Type

Processed goods for intermediate demand: Prices for processed goods for intermediate demand moved down 0.6 percent in November, the fifth straight decline. In November, nearly half of the broad-based decrease can be traced to the index for processed energy goods, which fell 1.7 percent. Prices for processed materials less foods and energy and for processed foods and feeds both declined 0.4 percent. For the 12 months ended in November, the index for processed goods for intermediate demand fell 7.1 percent, the smallest decline since a 7.0-percent decrease in the 12 months ended August 2015. (See table B.)

Product detail: A major factor in the November decline in prices for processed goods for intermediate demand was the index for electric power, which fell 1.2 percent. Prices for iron and steel, primary basic organic chemicals, natural gas to electric utilities, diesel fuel, and soybean cake and meal also decreased. In contrast, the index for jet fuel increased 3.9 percent. Prices for softwood lumber and for beef and veal also advanced. (See table 5.)

Unprocessed goods for intermediate demand: Prices for unprocessed goods for intermediate demand fell 5.1 percent in November following no change in the previous month. About 60 percent broad-based decline can be traced to the index for unprocessed energy materials, which dropped 9.2 percent. Prices for unprocessed foodstuffs and feedstuffs and for unprocessed nonfood materials less energy moved down 3.0 percent and 3.4 percent, respectively. For the 12 months ended in November, the index for unprocessed goods for intermediate demand fell 26.6 percent, the largest decrease since a 31.7-percent drop for the 12 months ended in September 2009.

Product detail: About 30 percent of the November decline in the index for unprocessed goods for intermediate demand can be attributed to prices for crude petroleum, which fell 10.4 percent. The indexes for natural gas, slaughter barrows and gilts, slaughter cattle, carbon steel scrap, and corn also moved lower. Conversely, the index for raw milk advanced 4.1 percent. Prices for strawberries and iron ores also increased.

Services for intermediate demand: The index for services for intermediate demand was unchanged in November following two consecutive decreases. In November, prices for transportation and warehousing services for intermediate demand rose 0.2 percent, and the index for services less trade, transportation, and warehousing for intermediate demand edged up 0.1 percent. In contrast, margins for trade services for intermediate demand inched down 0.1 percent. For the 12 months ended in November, prices for services for intermediate demand advanced 0.5 percent. (See table C.)

Product detail: In November, prices for courier, messenger, and U.S. postal services climbed 0.8 percent. The indexes for loan services (partial); portfolio management; metals, minerals, and ores wholesaling; and hardware and building materials and supplies retailing also advanced. Conversely, margins for paper and plastics products wholesaling fell 3.7 percent. The indexes for securities brokerage, dealing, investment advice, and related services; television advertising time sales; machinery and equipment parts and supplies wholesaling; and inland waterways transportation of freight also moved lower.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand edged down 0.1 percent in November, the third consecutive decrease. In November, prices for total goods inputs to stage 4 intermediate demand fell 0.3 percent. In contrast, the index for total services inputs moved up 0.2 percent. Decreases in the indexes for commercial electric power; securities brokerage, dealing, investment advice, and related services; paper and plastics products wholesaling; machinery and equipment parts and supplies wholesaling; and steel mill products outweighed increases in the indexes for portfolio management; loan services (partial); metals, minerals, and ores wholesaling; and strawberries. (See table 6.) For the 12 months ended in November, prices for stage 4 intermediate demand decreased 1.5 percent, the eleventh straight 12-month decline.

Stage 3 intermediate demand: The index for stage 3 intermediate demand fell 0.6 percent in November, the fifth consecutive decrease. In November, prices for total goods inputs to stage 3 intermediate demand declined 1.2 percent. Conversely, the index for total services inputs inched up 0.1 percent. Falling prices for slaughter barrows and gilts; slaughter cattle; securities brokerage, dealing, investment advice, and related services; slaughter chickens; primary basic organic chemicals; and steel mill products outweighed advances in the indexes for loan services (partial), raw milk, and jet fuel. For the 12 months ended in November, the stage 3 intermediate demand index dropped 7.6 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand moved down 1.3 percent in November after no change in October. In November, prices for total goods inputs to stage 2 intermediate demand declined 3.0 percent, and the index for total services inputs fell 0.2 percent. Declines in the indexes for crude petroleum; natural gas; securities brokerage, dealing, investment advice, and related services; steel mill products; television advertising time sales; and oilseeds outweighed increases in prices for portfolio management; courier, messenger, and U.S. postal services; and non-corrugated paperboard. For the 12 months ended in November, prices for stage 2 intermediate demand fell 9.7 percent.

Stage 1 intermediate demand: The index for stage 1 intermediate demand declined 1.0 percent in November, the fifth straight decrease. In November, prices for total goods inputs to stage 1 intermediate demand fell 1.7 percent. In contrast, the index for total services inputs edged up 0.1 percent. Decreases in the indexes for carbon steel scrap; nonferrous scrap; primary basic organic chemicals; securities brokerage, dealing, investment advice, and related services; diesel fuel; and natural gas outweighed increases in the indexes for loan services (partial); metals, minerals, and ores wholesaling; and cyclic intermediate chemicals and dyes. For the 12 months ended in November, the stage 1 intermediate demand index fell 8.5 percent.

Recalculated Seasonal Adjustment Factors and Relative Importance Figures to be Available on February 12, 2016

Each year with the release of PPI data for January, seasonal adjustment factors and relative importance figures are recalculated to reflect price movements from the just-completed calendar year. The following seasonal information will be available on February 12, 2016 (2 workdays prior to the release of PPI data for January 2016 on February 17):

* Direct seasonal factors for PPI commodity indexes for the year 2016, * Recalculated seasonal factors for the last 5 years (2011-2015) for PPI commodity indexes, * Recalculated seasonal factors for the last 5 years (2011-2015) for PPI Final Demand- Intermediate Demand indexes, * Recalculated seasonal data for the last 5 years (2011-2015) for Final Demand-Intermediate Demand and commodity indexes. This revision to seasonally adjusted indexes for the previous 5 years will be posted to the PPI database on the BLS website.

In addition, the following relative importance tables as of December 2015 will be available on February 12, 2016:

* Final demand by individual commodities * Final demand by component series * Individual commodities of intermediate demand by commodity type * Component series of intermediate demand by commodity type * Individual commodities of intermediate demand by production flow * Component series of intermediate demand by production flow * Commodities, all levels * Wherever-provided services and construction

To obtain this information, visit the PPI website at www.bls.gov/ppi, e-mail PPI at ppi- info@bls.gov, or call the Division of Industrial Prices and Price Indexes, Section of Index Analysis and Public Information at (202) 691-7705.