June 2017 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 0.1 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in May and rose 0.5 percent in April. (See table A.) On an unadjusted basis, the final demand index advanced 2.0 percent for the 12 months ended in June.

In June, almost 80 percent of the rise in the final demand index is attributable to prices for final demand services, which increased 0.2 percent. The index for final demand goods edged up 0.1 percent.

Prices for final demand less foods, energy, and trade services increased 0.2 percent in June. For the 12 months ended in June, the index for final demand less foods, energy, and trade services advanced 2.0 percent.

Final Demand

Final demand services: Prices for final demand services moved up 0.2 percent in June, the fourth consecutive increase. Most of the June rise can be attributed to a 0.3-percent advance in the index for final demand services less trade, transportation, and warehousing. Prices for final demand transportation and warehousing services edged up 0.1 percent. In contrast, the index for final demand trade services moved down 0.2 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: A major factor in the June increase in the index for final demand services was prices for securities brokerage, dealing, investment advice, and related services, which rose 4.0 percent. The indexes for machinery and equipment wholesaling, loan services (partial), insurance, inpatient care, and truck transportation of freight also advanced. Conversely, margins for apparel, footwear, and accessories retailing declined 3.7 percent. The indexes for motor vehicle maintenance and repair (partial) and for airline passenger services also fell. (See table 4.)

Final demand goods: Prices for final demand goods edged up 0.1 percent in June, after falling 0.5 percent in the previous month. Most of the June advance can be attributed to the index for final demand foods, which climbed 0.6 percent. Prices for final demand goods less foods and energy inched up 0.1 percent. In contrast, the index for final demand energy declined 0.5 percent.

Product detail: Leading the June advance in the index for final demand goods, prices for meats increased 5.5 percent. The indexes for pharmaceutical preparations, light motor trucks, young chickens, potatoes, and butter also moved higher. Conversely, prices for gasoline moved down 1.1 percent. The indexes for fresh vegetables (except potatoes), plastic resins and materials, and unprocessed finfish also fell.

Intermediate demand by Commodity Type

Within intermediate demand in June, prices for processed goods moved down 0.2 percent, the index for unprocessed goods rose 1.5 percent, and prices for services increased 0.6 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand fell 0.2 percent in June, the largest decrease since a 0.3 percent drop in March. Most of the June decline is attributable to prices for processed materials less foods and energy, which moved down 0.2 percent. Additionally, the index for processed energy goods fell 0.6 percent. In contrast, prices for processed foods and feeds increased 1.2 percent. For the 12 months ended in June, the index for processed goods for intermediate demand rose 3.8 percent.

Product detail: About 40 percent of the June decline in the index for processed goods for intermediate demand can be traced to prices for primary basic organic chemicals, which fell 2.3 percent. The indexes for plastic resins and materials, industrial electric power, commercial electric power, prepared animal feeds, and diesel fuel also moved lower. Conversely, prices for meats rose 5.5 percent. The indexes for paperboard and natural gas to electric utilities also increased. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand rose 1.5 percent in June following a 3.0-percent decline in May. Over 80 percent of the increase can be attributed to prices for unprocessed energy materials, which advanced 3.6 percent. The indexes for unprocessed foodstuffs and feedstuffs and for unprocessed nonfood materials less energy moved up 0.3 percent and 0.5 percent, respectively. For the 12 months ended in June, the index for unprocessed goods for intermediate demand climbed 6.3 percent.

Product detail: Leading the June advance in the index for unprocessed goods for intermediate demand, prices for crude petroleum increased 8.9 percent. The indexes for slaughter barrows and gilts, slaughter chickens, hay and hayseeds, wheat, and wastepaper also rose. In contrast, prices for oilseeds dropped 5.1 percent. The indexes for unprocessed finfish and raw cotton also declined.

Services for intermediate demand: The index for services for intermediate demand advanced 0.6 percent in June after no change in May. Leading the increase, prices for services less trade, transportation, and warehousing for intermediate demand rose 0.8 percent. Margins for trade services for intermediate demand increased 0.3 percent, while the index for transportation and warehousing services for intermediate demand was unchanged. For the 12 months ended in June, prices for services for intermediate demand climbed 2.9 percent, the largest rise since advancing 2.9 percent in the 12 months ended December 2012.

Product detail: In June, nearly half of the increase in prices for services for intermediate demand can be traced to the index for securities brokerage, dealing, investment advice, and related services, which rose 4.0 percent. The indexes for business loans (partial); metals, minerals, and ores wholesaling; portfolio management; insurance; and chemicals and allied products wholesaling also moved higher. Conversely, margins for food and alcohol wholesaling fell 1.0 percent. The indexes for cable network advertising time sales and for warehousing, storage, and related services also declined.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand moved up 0.3 percent in June following a 0.2-percent increase in May. In June, prices for total services inputs to stage 4 intermediate demand rose 0.5 percent, and the index for total goods inputs was unchanged. (See table D.) Advances in the indexes for securities brokerage, dealing investment advice and related services; business loans (partial); meats; metals, minerals, and ores wholesaling; paper boxes and containers; and portfolio management outweighed decreases in the indexes for industrial electric power, unprocessed finfish, and food and alcohol wholesaling. (See table 6.) For the 12 months ended in June, prices for stage 4 intermediate demand climbed 2.8 percent.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand rose 0.3 percent in June the largest advance since a 0.9-pecrcent increase in February. In June, the index for total services inputs to stage 3 intermediate demand climbed 0.5 percent, while prices for total goods inputs were unchanged. Increases in the indexes for securities brokerage, dealing, investment, advice and related services; slaughter barrows and gilts; slaughter chickens; business loans (partial); metals, minerals, and ores wholesaling; and salughter cows and bulls outweighed declines in the indexes for primary basic organic chemicals, slaughter steers and heifers, and food and alcohol wholesaling. For the 12 months ended in June, prices for stage 3 intermediate demand rose 3.3 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand moved up 0.5 percent in June after dropping 1.0 percent in May. In June, prices for total goods inputs to stage 2 intermediate demand increased 0.7 percent, and the index for total services inputs advanced 0.4 percent. Higher prices for crude petroleum; securities brokerage, dealing, investment advice and related services; paperboard, portfolio management; temporary help services; and wheat outweighed decreases in the indexes for plastic resins and materials, oilseeds, and cable network advertising time sales. For the 12 months ended in June, the index for stage 2 intermediate demand rose 4.2 percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand increased 0.2 percent in June following a 0.3-percent decrease in May. In June, the index for total services inputs to stage 1 intermediate demand advanced 0.9 percent, and prices for total goods inputs moved down 0.4 percent. Increases in the indexes for business loans (partial); securities brokerage, dealing, investment advice and related services; wastepaper; metals, minerals, and ores wholesaling; crude petroleum; and chemicals and allied products wholesaling outweighed decreases in the indexes for primary basic organic chemicals, diesel fuel, and cleaning supplies and paper products retailing. For the 12 months ended in June, prices for stage 1 intermediate demand rose 4.5 percent.

Resampling of Industries

Effective with the release of data for June 2017, the Producer Price Index (PPI) includes data for 30 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. Subsequent efforts have been completed at regular intervals.

For information on index additions, deletions, and recodes effective June 2017, see the current issue of the PPI Detailed Report online at www.bls.gov/ppi/ppidr201706.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 236224 New health care building construction 311513 Cheese manufacturing 311615 Poultry processing 311920 Coffee and tea manufacturing 311942 Spice and extract manufacturing 313310 Textile and fabric finishing mills 315210 Cut and sew apparel contractors 322211 Corrugated and solid fiber box manufacturing 325412 Pharmaceutical preparation manufacturing 325414 Other biological product manufacturing 325612 Polish and other sanitation good manufacturing 325910 Printing ink manufacturing 325920 Explosives manufacturing 326121 Unlaminated plastics profile shape manufacturing 326220 Rubber and plastics hose and belting manufacturing 327320 Ready-mix concrete manufacturing 327420 Gypsum product manufacturing 327910 Abrasive product manufacturing 331529 Other nonferrous metal foundries, except die-casting 332323 Ornamental and architectural metal work manufacturing 334510 Electromedical apparatus manufacturing 335932 Noncurrent-carrying wiring device manufacturing 336110 Automobile, light truck and utility vehicle manufacturing 336330 Motor vehicle steering and suspension parts manufacturing 336340 Motor vehicle brake system manufacturing 336350 Motor vehicle power train components manufacturing 337211 Wood office furniture manufacturing 339950 Sign manufacturing 493120 Refrigerated warehousing and storage 524126 Direct property and casualty insurers