November 2016 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 0.4 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in October and advanced 0.3 percent in September. (See table A.) On an unadjusted basis, the final demand index climbed 1.3 percent for the 12 months ended November 2016, the largest rise since moving up 1.3 percent for the 12 months ended November 2014.

In November 2016, over 80 percent of the advance in the final demand index is attributable to a 0.5-percent rise in prices for final demand services. The index for final demand goods increased 0.2 percent.

Prices for final demand less foods, energy, and trade services moved up 0.2 percent in November after edging down 0.1 percent in October. For the 12 months ended in November, the index for final demand less foods, energy, and trade services climbed 1.8 percent, the largest rise since advancing 1.8 percent for the 12 months ended August 2014.

Final Demand

Final demand services: The index for final demand services moved up 0.5 percent in November, the largest rise since increasing 0.9 percent in January 2016. Over 80 percent of the November advance can be traced to margins for final demand trade services, which climbed 1.3 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 both inched up 0.1 percent.

Product detail: A quarter of the November increase in prices for final demand services is attributable to margins for apparel, jewelry, footwear, and accessories retailing, which advanced 4.2 percent. The indexes for fuels and lubricants retailing; machinery, equipment, parts, and supplies wholesaling; food and alcohol retailing; food and alcohol wholesaling; and inpatient care also moved higher. In contrast, prices for guestroom rental fell 3.3 percent. The indexes for cleaning supplies and paper products retailing and for portfolio management also decreased. (See table 4.)

Final demand goods: Prices for final demand goods moved up 0.2 percent in November following a 0.4-percent increase in October. Leading the November advance, the index for final demand goods less foods and energy rose 0.2 percent. Prices for final demand foods also moved higher, climbing 0.6 percent. Conversely, the index for final demand energy declined 0.3 percent.

Product detail: In November, prices for iron and steel scrap jumped 11.4 percent. The indexes for beef and veal, fresh fruits and melons, pharmaceutical preparations, electric power, and cigarettes also increased. In contrast, gasoline prices fell 2.9 percent. The indexes for fresh and dry vegetables and for light motor trucks also decreased.

Intermediate Demand by Commodity Type

Within intermediate demand in November, prices for processed goods advanced 0.3 percent, the index for unprocessed goods was unchanged, and prices for services rose 0.2 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand moved up 0.3 percent in November, the third consecutive increase. Most of the November advance is attributable to a 0.4-percent rise in prices for processed materials less foods and energy. The index for processed foods and feeds climbed 0.8 percent. Conversely, prices for processed energy goods declined 0.8 percent. For the 12 months ended in November, the index for processed goods for intermediate demand moved up 0.2 percent, the first increase since a similar 0.2-percent advance in the 12 months ended October 2014.

Product detail: Leading the November advance in the index for processed goods for intermediate demand, prices for primary basic organic chemicals increased 9.5 percent. The indexes for beef and veal, copper and brass mill shapes, residual fuels, natural cheese (except cottage cheese), and commercial electric power also moved higher. In contrast, prices for natural gas to electric utilities dropped 5.9 percent. The indexes for steel mill products and prepared poultry also decreased. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand was unchanged in November following a 0.6-percent decline in October. In November, prices for unprocessed foodstuffs and feedstuffs increased 3.5 percent, and the index for unprocessed nonfood materials less energy rose 2.4 percent. Conversely, prices for unprocessed energy materials fell 5.0 percent. For the 12 months ended in November, the index for unprocessed goods for intermediate demand climbed 0.2 percent, the first increase since rising 0.9 percent for the 12 months ended July 2014.

Product detail: In November, the index for slaughter steers and heifers rose 10.7 percent. Prices for slaughter poultry; iron and steel scrap; hay, hayseeds, and oilseeds; strawberries; and coal also increased. In contrast, the index for crude petroleum decreased 11.6 percent. Prices for raw milk and for logs, bolts, timber, pulpwood, and wood chips also moved lower.

Services for intermediate demand: The index for services for intermediate demand advanced 0.2 percent in November following a 0.6-percent decline in October. Eighty percent of the increase can be traced to prices for services less trade, transportation, and warehousing for intermediate demand, which climbed 0.3 percent. Margins for trade services for intermediate demand moved up 0.2 percent, and the index for transportation and warehousing services for intermediate demand was unchanged. For the 12 months ended in November, prices for services for intermediate demand advanced 2.3 percent.

Product detail: Nearly 80 percent of the November increase in the index for services for intermediate demand is attributable to prices for business loans (partial), which rose 3.2 percent. The indexes for television advertising time sales; food and alcohol wholesaling; fuels and lubricants retailing; hardware, building materials, and supplies retailing; and advertising sales in periodicals also increased. Conversely, margins for paper and plastics products wholesaling fell 2.6 percent. The indexes for services related to securities brokerage and dealing and for services related to air transportation also moved lower.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand increased 0.2 percent in November following a 0.2-percent decline in October. In November, prices for total goods inputs to stage 4 intermediate demand moved up 0.3 percent, and the index for total services inputs advanced 0.2 percent. (See table D.) Increases in the indexes for beef and veal, business loans (partial), primary basic organic chemicals, food and alcohol wholesaling, strawberries, and natural cheese (except cottage cheese) outweighed decreases in the indexes for paper and plastics products wholesaling, portfolio management, and fabricated structural metal. For the 12 months ended in November, prices for stage 4 intermediate demand rose 0.9 percent, the largest increase since a 0.9-percent advance in the 12 months ended November 2014.

Stage 3 intermediate demand: The index for stage 3 intermediate demand moved up 0.5 percent in November following a 0.7-percent decline in October. In November, prices for total goods inputs to stage 3 intermediate demand advanced 0.7 percent, and the index for total services inputs edged up 0.1 percent. Increases in the indexes for slaughter steers and heifers, slaughter poultry, primary basic organic chemicals, business loans (partial), slaughter barrows and gilts, and food and alcohol wholesaling outweighed declines in the indexes for raw milk; gasoline; and metals, minerals, and ores wholesaling. For the 12 months ended in November, prices for stage 3 intermediate demand fell 0.8 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand moved down 0.5 percent in November following a 0.6-percent advance in October. In November, prices for total goods inputs to stage 2 intermediate demand fell 1.2 percent, and prices for total services inputs were unchanged. Lower prices for crude petroleum, liquefied petroleum gas, steel mill products, services related to securities brokerage and dealing, portfolio management, and guestroom rental outweighed increases in prices for hay, hayseeds, and oilseeds; television advertising time sales; and copper and brass mill shapes. For the 12 months ended in November, the index for stage 2 intermediate demand advanced 3.6 percent, the largest rise since a 3.6-percent increase in the 12 months ended February 2014.

Stage 1 intermediate demand: The index for stage 1 intermediate demand climbed 0.7 percent in November following a 0.2-percent decline in October. In November, prices for total goods inputs to stage 1 intermediate demand moved up 1.1 percent, and the index for total services inputs advanced 0.3 percent. Increases in the indexes for primary basic organic chemicals, iron and steel scrap, business loans (partial), nonferrous scrap, fuels and lubricants retailing, and residual fuels outweighed declines in the indexes for crude petroleum; metals, minerals, and ores wholesaling; and paper and plastics products wholesaling. For the 12 months ended in November, the index for stage 1 intermediate demand advanced 1.7 percent, the largest rise since a 1.8-percent increase in the 12 months ended September 2014.

Recalculated Seasonal Adjustment Factors and Relative Importance Figures to be Available on February 10, 2017

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 10, 2017 (2 workdays prior to the release of PPI data for January 2017 on February 14):

* Direct seasonal factors for PPI commodity indexes for the year 2017, * Recalculated seasonal factors for the last 5 years (2012-2016) for PPI commodity indexes, * Recalculated seasonal factors for the last 5 years (2012-2016) for PPI Final Demand- Intermediate Demand indexes, * Recalculated seasonal index data for the last 5 years (2012-2016) 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 2016 will be available on February 10, 2017:

* 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, or contact the PPI Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-7705.