April 2016 Producer Price Index

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The Producer Price Index for final demand rose 0.2 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices declined 0.1 percent in March and 0.2 percent in February. On an unadjusted basis, the final demand index was unchanged for the 12 months ended in April. (See table A.)

In April, prices for final demand services edged up 0.1 percent, and the index for final demand goods advanced 0.2 percent.

The index for final demand less foods, energy, and trade services moved up 0.3 percent in April following no change in March. For the 12 months ended in April, prices for final demand less foods, energy, and trade services rose 0.9 percent.

Final Demand

Final demand services: The index for final demand services edged up 0.1 percent in April following a 0.2-percent decline in March. The increase can be traced to prices for final demand services less trade, transportation, and warehousing, which climbed 0.3 percent. In contrast, the indexes for final demand transportation and warehousing services and for final demand trade services decreased 0.4 percent and 0.1 percent, respectively.

Product detail: A major factor in the April advance in the index for final demand services was prices for portfolio management, which climbed 4.5 percent. The indexes for fuels and lubricants retailing, residential real estate loans (partial), chemicals and allied products wholesaling, and truck transportation of freight also increased. Conversely, prices for airline passenger services fell 1.7 percent. The indexes for health, beauty, and optical goods retailing; machinery and equipment wholesaling; and services related to securities brokerage and dealing also moved lower. (See table 4.)

Final demand goods: The index for final demand goods advanced 0.2 percent in April, the same as in March. Most of the April rise can be traced to prices for final demand goods less foods and energy, which climbed 0.3 percent. The index for final demand energy moved up 0.2 percent. In contrast, prices for final demand foods declined 0.3 percent.

Product detail: A contributor to the April increase in prices for final demand goods was the index for carbon steel scrap, which jumped 22.1 percent. Prices for gasoline, electric power, pharmaceutical preparations, beef and veal, and prepared poultry also advanced. Conversely, prices for chicken eggs dropped 33.9 percent. The indexes for home heating oil and jet fuel also fell.

Intermediate Demand by Commodity Type

Within intermediate demand in April, prices for processed goods advanced 0.3 percent, the index for unprocessed goods rose 2.6 percent, and prices for services moved up 0.1 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand increased 0.3 percent in April following nine straight declines. Over three-quarters of the advance can be traced to prices for processed materials less foods and energy, which rose 0.3 percent. The index for processed energy goods increased 0.5 percent. In contrast, prices for processed foods and feeds fell 0.3 percent. For the 12 months ended in April, the index for processed goods for intermediate demand declined 4.6 percent.

Product detail: A major factor in the April advance in prices for processed goods for intermediate demand was the index for primary basic organic chemicals, which rose 2.9 percent. Prices for gasoline, electric power, steel mill products, biological products, and meat and bone meal also moved higher. Conversely, the index for processed eggs dropped 15.5 percent. Prices for jet fuel and for paving mixtures and blocks also decreased. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand advanced 2.6 percent in April after increasing 2.5 percent in March. Most of the rise in April is attributable to prices for unprocessed energy materials, which jumped 9.0 percent. The index for unprocessed nonfood materials less energy moved up 3.5 percent. In contrast, prices for unprocessed foodstuffs and feedstuffs fell 1.9 percent. For the 12 months ended in April, the index for unprocessed goods for intermediate demand dropped 12.3 percent.

Product detail: Eighty percent of the April advance in prices for unprocessed goods for intermediate demand can be attributed to the index for crude petroleum, which rose 17.6 percent. Prices for carbon steel scrap, natural gas, slaughter hogs, copper ores, and oilseeds also moved higher. Conversely, the index for slaughter cattle declined 3.5 percent. Prices for corn and coal also fell.

Services for intermediate demand: The index for services for intermediate demand inched up 0.1 percent in April following a 0.3-percent decline in March. Leading the advance, prices for services less trade, transportation, and warehousing for intermediate demand increased 0.1 percent. In addition, the index for trade services for intermediate demand rose 0.4 percent. In contrast, prices for transportation and warehousing services for intermediate demand fell 0.5 percent. For the 12 months ended in April, the index for services for intermediate demand moved up 0.9 percent.

Product detail: A major contributor to the rise in prices for services for intermediate demand was the index for business loans (partial), which climbed 0.9 percent. The indexes for portfolio management, chemicals and allied products wholesaling, passenger car rental, and truck transportation of freight also moved higher. Conversely, prices for U.S. postal services fell 3.5 percent. The indexes for services related to securities brokerage and dealing; legal services; and hardware, building materials, and supplies retailing also decreased.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand advanced 0.3 percent in April following two straight declines. In April, prices for total services inputs to stage 4 intermediate demand climbed 0.4 percent, and the index for total goods inputs rose 0.2 percent. (See table D.) Increases in the indexes for portfolio management, electric power, chemicals and allied products wholesaling, biological products, gasoline, and ready-mix concrete outweighed falling prices for services related to securities brokerage and dealing, U.S. postal services, and paving mixtures and blocks. (See table 6.) For the 12 months ended in April, the index for stage 4 intermediate demand moved down 0.9 percent.

Stage 3 intermediate demand: The index for stage 3 intermediate demand edged down 0.1 percent in April following no change in March. In April, prices for total goods inputs to stage 3 intermediate demand decreased 0.3 percent, while the index for total services inputs was unchanged. Lower prices for jet fuel, slaughter cattle, U.S. postal services, ungraded chicken eggs, and services related to securities brokerage and dealing outweighed increases in the indexes for gasoline, slaughter hogs, primary basic organic chemicals, and chemicals and allied products wholesaling. For the 12 months ended in April, the index for stage 3 intermediate demand fell 4.1 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand climbed 0.9 percent in April after rising 0.5 percent in March. In April, prices for total goods inputs to stage 2 intermediate demand jumped 2.5 percent. In contrast, the index for total services inputs fell 0.2 percent. Higher prices for crude petroleum, natural gas, portfolio management, steel mill products, thermoplastic resins and materials, and carbon steel scrap outweighed decreases in the indexes for services related to securities brokerage and dealing, U.S. postal services, and non-corrugated paperboard. For the 12 months ended in April, the index for stage 2 intermediate demand moved down 3.0 percent.

Stage 1 intermediate demand: The index for stage 1 intermediate demand rose 0.7 percent in April following no change in March. In April, prices for total goods inputs to stage 1 intermediate demand advanced 1.1 percent, and the index for total services inputs moved up 0.3 percent. Increases in the indexes for carbon steel scrap, primary basic organic chemicals, crude petroleum, electric power, chemicals and allied products wholesaling, and portfolio management outweighed lower prices for services related to securities brokerage and dealing, diesel fuel, and airline passenger services. For the 12 months ended in April, the index for stage 1 intermediate demand dropped 4.4 percent.