April 2018 Producer Price Index

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The Producer Price Index for final demand rose 0.1 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.3 percent in March and 0.2 percent in February. (See table A.) On an unadjusted basis, the final demand index increased 2.6 percent for the 12 months ended in April.

In April, the index for final demand services advanced 0.1 percent, and prices for final demand goods were unchanged.

The index for final demand less foods, energy, and trade services edged up 0.1 percent in April after increasing 0.4 percent in March. For the 12 months ended in April, prices for final demand less foods, energy, and trade services advanced 2.5 percent.

Final Demand

Final demand services: Prices for final demand services inched up 0.1 percent in April, the fourth straight rise. The advance in April was led by the index for final demand trade services, which increased 0.2 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services rose 0.6 percent. Conversely, the index for final demand services less trade, transportation, and warehousing services declined 0.1 percent.

Product detail: A major factor in the April advance in prices for final demand services was the index for machinery, equipment, parts, and supplies wholesaling, which climbed 0.9 percent. The indexes for services related to securities brokerage and dealing (partial), residential real estate loans (partial), airline passenger services, and wireless telecommunication services also moved higher. In contrast, prices for traveler accommodation services fell 3.2 percent. The indexes for health, beauty, and optical goods retailing; legal services; and apparel wholesaling also decreased. (See table 4.)

Final demand goods: Prices for final demand goods were unchanged in April after increasing 0.3 percent in March. In April, a 0.3-percent rise in the index for final demand goods less foods and energy and a 0.1-percent advance in prices for final demand energy offset a 1.1-percent drop in the index for final demand foods.

Product detail: Among prices for final demand goods in April, the index for tobacco products jumped 2.6 percent. The indexes for carbon steel scrap; search, detection, navigation, and guidance systems; pharmaceutical preparations; diesel fuel; and prepared poultry products also increased. Conversely, prices for fresh and dry vegetables fell 17.8 percent. The indexes for chicken eggs, beef and veal, residential electric power, and basic organic chemicals also moved lower.

Intermediate Demand by Commodity Type

Within intermediate demand in April, prices for processed goods increased 0.5 percent, the index for unprocessed goods advanced 0.9 percent, and prices for services rose 0.3 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand moved up 0.5 percent in April following a 0.3-percent decline in March. Over half of the broad-based increase can be traced to prices for processed energy goods, which advanced 1.3 percent. The indexes for processed materials less foods and energy and for processed foods and feeds also moved higher, both increasing 0.3 percent. For the 12 months ended in April, prices for processed goods for intermediate demand advanced 4.7 percent.

Product detail: In April, a major factor in the increase in prices for processed goods for intermediate demand was the index for natural gas to electric utilities, which climbed 5.4 percent. Prices for steel mill products; diesel fuel; commercial electric power; structural, architectural, and pre-engineered metal products; and processed eggs also moved higher. In contrast, the index for basic organic chemicals fell 2.1 percent. Prices for beef and veal and for asphalt also decreased. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand advanced 0.9 percent in April following a 4.8-percent decline in March. Most of the increase is attributable to prices for unprocessed energy materials, which rose 3.8 percent. The index for unprocessed nonfood materials less energy climbed 0.7 percent. Conversely, prices for unprocessed foodstuffs and feedstuffs declined 2.1 percent. For the 12 months ended in April, the index for unprocessed goods for intermediate demand advanced 3.2 percent.

Product detail: Leading the April increase in the index for unprocessed goods for intermediate demand, crude petroleum prices jumped 7.2 percent. The indexes for slaughter chickens; raw milk; carbon steel scrap; hay, hayseeds, and oilseeds; and iron ores also advanced. In contrast, prices for slaughter cattle fell 6.3 percent. The indexes for slaughter hogs and wastepaper also declined.

Services for intermediate demand: The index for services for intermediate demand increased 0.3 percent in April, the third consecutive rise. Over 40 percent of the broad-based advance in April can be traced to margins for trade services for intermediate demand, which moved up 0.9 percent. Prices for services less trade, transportation, and warehousing for intermediate demand and for transportation and warehousing services for intermediate demand climbed 0.2 percent and 0.5 percent, respectively. For the 12 months ended in April, the index for services for intermediate demand increased 3.1 percent.

Product detail: One-third of the April advance in prices for services for intermediate demand is attributable to a 10.0-percent jump in margins for metals, minerals, and ores wholesaling. The indexes for services related to securities brokerage and dealing (partial); accounting services (partial); business loans (partial); broadcast and network television advertising time sales; and courier, messenger, and U.S. postal services also moved higher. Conversely, prices for legal services fell 1.2 percent. The indexes for portfolio management and for paper and plastics products wholesaling also decreased.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand increased 0.3 percent in April, the ninth consecutive advance. In April, the index for total goods inputs to stage 4 intermediate demand rose 0.4 percent, and prices for total services inputs moved up 0.2 percent. (See table D.) Increases in the indexes for structural, architectural, and pre-engineered metal products; metals, minerals, and ores wholesaling; accounting services (partial); services related to securities brokerage and dealing (partial); diesel fuel; and asphalt felts and coatings outweighed declines in prices for legal services, portfolio management, and beef and veal. (See table 6.) For the 12 months ended in April, the index for stage 4 intermediate demand climbed 3.4 percent.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand advanced 0.2 percent in April after decreasing 0.5 percent in March. In April, the index for total services inputs to stage 3 intermediate demand rose 0.5 percent. In contrast, prices for total goods inputs fell 0.2 percent. Increases in the indexes for metals, minerals, and ores wholesaling; raw milk; slaughter chickens; steel mill products; services related to securities brokerage and dealing (partial); and accounting services (partial) outweighed declines in the indexes for slaughter cattle, slaughter hogs, and paper and plastics products wholesaling. For the 12 months ended in April, prices for stage 3 intermediate demand moved up 3.9 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand increased 1.0 percent in April following a 1.7-percent drop in March. In April, prices for total goods inputs to stage 2 intermediate demand jumped 1.8 percent, and the index for total services inputs advanced 0.3 percent. Higher prices for crude petroleum; steel mill products; accounting services (partial); services related to securities brokerage and dealing (partial); cable network advertising time sales; and staffing services outweighed declines in the indexes for legal services, portfolio management, and basic organic chemicals. For the 12 months ended in April, prices for stage 2 intermediate demand rose 3.9 percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand moved up 0.5 percent in April after falling 0.2 percent in March. In April, the index for total goods inputs to stage 1 intermediate demand climbed 0.4 percent, and prices for total services inputs advanced 0.5 percent. Increases in the indexes for carbon steel scrap; metals, minerals, and ores wholesaling; diesel fuel; crude petroleum; steel mill products; and business loans (partial) outweighed decreasing prices for basic organic chemicals, wastepaper, and traveler accommodation services. For the 12 months ended in April, the index for stage 1 intermediate demand rose 5.4 percent.