June 2018 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 rose 0.3 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.5 percent in May and 0.1 percent in April. (See table A.) On an unadjusted basis, the final demand index moved up 3.4 percent for the 12 months ended in June, the largest 12-month increase since climbing 3.7 percent in November 2011.

In June, most of the rise in the index for final demand is attributable to a 0.4-percent advance in prices for final demand services. The index for final demand goods edged up 0.1 percent.

Prices for final demand less foods, energy, and trade services moved up 0.3 percent in June after rising 0.1 percent in May. For the 12 months ended in June, the index for final demand less foods, energy, and trade services climbed 2.7 percent.

Final Demand

Final demand services: Prices for final demand services moved up 0.4 percent in June, the largest advance since a 0.5-percent rise in January. In June, half of the broad-based increase in the index for final demand services can be traced to margins for final demand trade services, which climbed 0.7 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 rose 0.3 percent and 0.5 percent, respectively.

Product detail: Over 40 percent of the advance in the index for final demand services is attributable to a 21.8-percent jump in the index for fuels and lubricants retailing. The indexes for hospital outpatient care; health, beauty, and optical goods retailing; truck transportation of freight; automobiles and automobile parts retailing; and food retailing also moved higher. Conversely, prices for apparel, footwear, and accessories retailing declined 2.9 percent. The indexes for inpatient care and airline passenger services also decreased. (See table 4.)

Final demand goods: Prices for final demand goods edged up 0.1 percent in June following a 1.0- percent rise in May. Leading the June increase, the index for final demand goods less foods and energy advanced 0.3 percent. Prices for final demand energy climbed 0.8 percent. In contrast, the index for final demand foods fell 1.1 percent.

Product detail: A major factor in the June increase in prices for final demand goods was the index for motor vehicles, which moved up 0.4 percent. Prices for diesel fuel, electric power, industrial chemicals, and fresh fruits and melons also advanced. Conversely, prices for fresh and dry vegetables dropped 13.8 percent. The indexes for corn, pharmaceutical preparations, and residential natural gas also moved lower.

Intermediate Demand by Commodity Type

With intermediate demand in June, prices for processed goods advanced 0.7 percent, the index for unprocessed goods fell 1.0 percent, and prices for services edged up 0.1 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand increased 0.7 percent in June, the third consecutive rise. About two-thirds of the June advance can be attributed to prices for processed materials less foods and energy, which climbed 0.7 percent. The index for processed energy goods moved up 1.8 percent. In contrast, prices for processed foods and feeds dropped 1.1 percent. For the 12 months ended in June, the index for processed goods for intermediate demand increased 6.8 percent, the largest 12-month rise since jumping 7.2 percent in November 2011.

Product detail: A major factor in the advance in the index for processed goods for intermediate demand was prices for industrial chemicals, which rose 2.1 percent. The indexes for diesel fuel, commercial electric power, industrial electric power, thermoplastic resins and materials, and hot rolled steel sheet and strip also moved higher. Conversely, prices for prepared animal feeds decreased 1.6 percent. The indexes for utility natural gas and for inedible fats and oils also fell. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand declined 1.0 percent in June after rising 2.5 percent in May. Leading the decrease, prices for unprocessed energy materials fell 2.6 percent. The index for unprocessed nonfood materials less energy moved down 0.2 percent. In contrast, prices for unprocessed foodstuffs and feedstuffs advanced 0.2 percent. For the 12 months ended in June, the index for unprocessed goods for intermediate demand increased 5.8 percent.

Product detail: Most of the June decline in the index for unprocessed goods for intermediate demand can be traced to a 9.5-percent drop in prices for crude petroleum. The indexes for corn, oilseeds, carbon steel scrap, fresh and dry vegetables, and slaughter cows and bulls also declined. Conversely, prices for raw milk rose 4.4 percent. The indexes for natural gas and nonferrous scrap also advanced.

Services for intermediate demand: The index for services for intermediate demand moved up 0.1 percent in June, the smallest advance since edging up 0.1 percent in July 2017. In June, the increase was led by prices for transportation and warehousing services for intermediate demand, which rose 0.2 percent. Margins for trade services for intermediate demand advanced 0.1 percent, while prices for services less trade, transportation, and warehousing for intermediate demand were unchanged. For the 12 months ended in June, the index for services for intermediate demand increased 2.9 percent.

Product detail: In June, prices for truck transportation of freight advanced 1.3 percent. The indexes for business loans (partial); fuels and lubricants retailing; hardware, building materials, and supplies retailing; and securities brokerage, dealing, and investment advice also moved higher. In contrast, nonresidential real estate rents fell 2.4 percent. The indexes for television advertising time sales, financial auditing, and chemicals and allied products wholesaling also decreased.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand increased 0.3 percent in June, the eleventh consecutive advance. In June, the index for total goods inputs to stage 4 intermediate demand rose 0.5 percent. Prices for total services inputs were unchanged. (See table D.) Increases in the indexes for diesel fuel; business loans (partial); commercial electric power; fabricated structural metal; hardware, building materials, and supplies retailing; and industrial chemicals outweighed declines in the indexes for nonresidential real estate rents, chemicals and allied products wholesaling, and corn. (See table 6.) For the 12 months ended in June, prices for stage 4 intermediate demand climbed 3.9 percent.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand advanced 0.5 percent in June, the third straight rise. In June, the index for total goods inputs to stage 3 intermediate demand increased 1.1 percent, and prices for total services inputs were unchanged. Advances in the indexes for raw milk, diesel fuel, industrial chemicals, slaughter steers and heifers, asphalt, and fuels and lubricants retailing outweighed declines in prices for nonresidential real estate rents, jet fuel, and slaughter cows and bulls. For the 12 months ended in June, prices for stage 3 intermediate demand moved up 5.4 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand edged down 0.1 percent in June after advancing 1.2 percent in May. In June, prices for total goods inputs to stage 2 intermediate demand fell 0.5 percent. Conversely, the index for total services inputs increased 0.2 percent. Lower prices for crude petroleum, oilseeds, corn, financial auditing, and prepared animal feeds outweighed advances in the indexes for tax preparation and planning, natural gas, thermoplastic resins and materials, and industrial chemicals. For the 12 months ended in June, prices for stage 2 intermediate demand rose 5.5 percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand moved up 0.7 percent in June, the third consecutive rise. In June, the index for total goods inputs to stage 1 intermediate demand advanced 1.1 percent, and prices for total services inputs inched up 0.1 percent. Increases in the indexes for diesel fuel, industrial chemicals, nonferrous scrap, natural gas, fuels and lubricants retailing, and business loans (partial) outweighed decreases in prices for crude petroleum, carbon steel scrap, and nonresidential real estate rents. For the 12 months ended in June, the index for stage 1 intermediate demand rose 7.3 percent, the largest 12-month advance since climbing 8.1 percent in October 2011.

Resampling of Industries

Effective with the release of data for June 2018, the Producer Price Index (PPI) includes data for 30 resampled industries classified according to the 2017 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 2018, see the current issue of the PPI Detailed Report online at www.bls.gov/ppi/ppidr201806.pdf, or contact the PPI Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-7705.

NAICS Code Industry 212290 Other metal ore mining 213114 Support activities for metal mining 236221 New warehouse building construction 311314 Cane sugar manufacturing 311813 Frozen cakes and other pastries manufacturing 311830 Tortilla manufacturing 313240 Knit fabric mills 325611 Soap and other detergent manufacturing 326140 Polystyrene foam product manufacturing 326150 Urethane and other foam product manufacturing 327993 Mineral wool manufacturing 331524 Aluminum foundries, except die-casting 332112 Nonferrous forging 332117 Powder metallurgy part manufacturing 333112 Lawn and garden equipment manufacturing 333914 Measuring, dispensing, and other pumping equipment manufacturing 335921 Fiber optic cable manufacturing 335929 Other communication and energy wire manufacturing 336120 Heavy duty truck manufacturing 336390 Other motor vehicle parts manufacturing 337125 Household furniture, except wood or metal, manufacturing 339999 All other miscellaneous manufacturing 453210 Office supplies and stationery stores 484121 General freight trucking, long-distance TL 484122 General freight trucking, long-distance LTL 488310 Port and harbor operations 511191 Greeting card publishers 531120 Lessors of nonresidential buildings 562111 Solid waste collection 621210 Offices of dentists