February 2019 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 edged up 0.1 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices fell 0.1 percent in both January and December. (See table A.) On an unadjusted basis, the final demand index moved up 1.9 percent for the 12 months ended in February.

In February, the increase in the final demand index can be traced to a 0.4-percent rise in prices for final demand goods. The index for final demand services was unchanged.

The index for final demand less foods, energy, and trade services inched up 0.1 percent in February following a 0.2-percent advance in January. For the 12 months ended in February, prices for final demand less foods, energy, and trade services climbed 2.3 percent.

Final Demand

Final demand goods: The index for final demand goods increased 0.4 percent in February following three consecutive declines. Over 80 percent of the advance can be traced to prices for final demand energy, which rose 1.8 percent. The index for final demand goods less foods and energy edged up 0.1 percent. Conversely, prices for final demand foods fell 0.3 percent.

Product detail: Forty percent of the increase in the index for final demand goods is attributable to a 3.3-percent rise in gasoline prices. The indexes for diesel fuel, jet fuel, integrated microcircuits, residual fuels, and beef and veal also moved higher. In contrast, prices for fresh and dry vegetables declined 12.8 percent. The indexes for iron and steel scrap and for residential natural gas also decreased. (See table 4.)

Final demand services: Prices for final demand services were unchanged in February following a 0.3-percent rise in January. In February, a 0.3-percent increase in the index for final demand services less trade, transportation, and warehousing offset a decline of 0.4 percent in margins for final demand trade services and a 1.3-percent decrease in the index for final demand transportation and warehousing services. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: In February, prices for traveler accommodation services rose 5.3 percent. The indexes for machinery, equipment, parts, and supplies wholesaling; food retailing; portfolio management; and legal services also moved higher. Conversely, margins for fuels and lubricants retailing fell 10.5 percent. The indexes for apparel, jewelry, footwear, and accessories retailing; airline passenger services; health, beauty, and optical goods retailing; and nonresidential real estate services also declined.

Intermediate Demand by Commodity Type

Within intermediate demand in February, prices for processed goods rose 0.4 percent, the index for unprocessed goods fell 4.6 percent, and prices for services inched down 0.1 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand climbed 0.4 percent in February following three straight declines. Over 80 percent of the rise can be traced to prices for processed energy goods, which increased 1.6 percent. The index for processed goods less foods and energy inched up 0.1 percent. In contrast, prices for processed foods and feeds decreased 0.1 percent. For the 12 months ended in February, the index for processed goods for intermediate demand advanced 0.6 percent.

Product detail: In February, nearly two-thirds of the rise in the index for processed goods for intermediate demand is attributable to a 7.2-percent jump in diesel fuel prices. The indexes for industrial chemicals, gasoline, jet fuel, commercial electric power, and dairy products also moved higher. Conversely, prices for soybean cake and meal fell 5.7 percent. The indexes for steel mill products and utility natural gas also declined. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand fell 4.6 percent in February after decreasing 9.3 percent in January. Most of the broad-based decline in February can be traced to prices for unprocessed energy materials, which dropped 10.7 percent. The indexes for unprocessed foodstuffs and feedstuffs and for unprocessed nonfood materials less energy moved down 1.0 percent and 0.7 percent, respectively. For the 12 months ended in February, prices for unprocessed goods for intermediate demand decreased 8.8 percent, the largest decline since falling 10.8 percent for the 12 months ended June 2016.

Product detail: In February, over 90 percent of the decrease in the index for unprocessed goods for intermediate demand is attributable to a 25.8-percent drop in natural gas prices. The indexes for slaughter barrows and gilts, slaughter chickens, carbon steel scrap, fresh vegetables (except potatoes), and coal also moved lower. In contrast, crude petroleum prices rose 2.6 percent. The indexes for hay, hayseeds, and oilseeds and nonferrous scrap also increased.

Services for intermediate demand: The index for services for intermediate demand edged down 0.1 percent in February, the first decrease since a 0.3-percent decline in August 2016. In February, 40 percent of the decline can be traced to the index for transportation and warehousing services for intermediate demand, which moved down 0.1 percent. Margins for trade services for intermediate demand also fell 0.1 percent. Prices for services less trade, transportation, and warehousing for intermediate demand were unchanged. For the 12 months ended in February, the index for services for intermediate demand increased 2.6 percent.

Product detail: A major factor in the decrease in the index for services for intermediate demand was prices for airline passenger services, which fell 4.2 percent. The indexes for nonresidential real estate services; hardware, building materials, and supplies retailing; fuels and lubricants retailing; and food wholesaling also moved down. Conversely, prices for portfolio management increased 2.1 percent. The indexes for legal services; chemicals and allied products wholesaling; and courier, messenger, and U.S. postal services also advanced.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand moved up 0.2 percent in February after falling 0.2 percent in January. In February, prices for total goods inputs to stage 4 intermediate demand increased 0.3 percent. The index for total services inputs was unchanged. (See table D.) Rising indexes for diesel fuel, portfolio management, legal services, machinery and equipment parts and supplies wholesaling, chemicals and allied products wholesaling, and commercial electric power outweighed declines in the indexes for nonresidential real estate services; hardware, building materials, and supplies retailing; and steel mill products. (See table 6.) For the 12 months ended in February, prices for stage 4 intermediate demand moved up 2.3 percent.

Stage 3 intermediate demand: The index for stage 3 intermediate demand increased 0.2 percent in February following three consecutive declines. In February, prices for total goods inputs to stage 3 intermediate demand advanced 0.6 percent. In contrast, the index for total services inputs moved down 0.1 percent. Increases in prices for jet fuel; gasoline; diesel fuel; raw milk; industrial chemicals; and courier, messenger, and U.S. postal services outweighed decreases in the indexes for nonresidential real estate services, slaughter barrows and gilts, and slaughter chickens. For the 12 months ended in February, prices for stage 3 intermediate demand advanced 0.4 percent.

Stage 2 intermediate demand: Prices for stage 2 intermediate demand dropped 1.6 percent in February after falling 3.8 percent in January. In February, the index for total goods inputs to stage 2 intermediate demand decreased 3.9 percent. Conversely, prices for total services inputs moved up 0.2 percent. Declines in the indexes for natural gas; steel mill products; airline passenger services; thermoplastic resins and materials; hardware, building materials, and supplies retailing; and non- corrugated paperboard outweighed advances in prices for portfolio management, crude petroleum, and legal services. For the 12 months ended in February, prices for stage 2 intermediate demand dropped 1.6 percent, the first decline since a 0.4-percent decrease in July 2016.

Stage 1 intermediate demand: The index for stage 1 intermediate demand moved up 0.1 percent in February following three consecutive declines. In February, prices for total goods inputs to stage 1 intermediate demand moved up 0.3 percent. In contrast, the index for total services inputs fell 0.2 percent. Rising indexes for diesel fuel, industrial chemicals, traveler accommodation services, chemicals and allied products wholesaling, and nonferrous scrap outweighed decreases in prices for nonresidential real estate services, natural gas, carbon steel scrap, and airline passenger services. For the 12 months ended in February, prices for stage 1 intermediate demand advanced 0.1 percent.

Resampling of Industries

Effective with the release of data for February 2019, the Producer Price Index (PPI) includes data for 18 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 February 2019, see the current issue of the PPI Detailed Report online at www.bls.gov/ppi/ppidr201902.pdf, or contact the PPI Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691- 7705.

NAICS Code Industry 212399 All other nonmetallic mineral mining 213111 Drilling oil and gas wells 213112 Support activities for oil and gas operations 321219 Reconstituted wood product manufacturing 322230 Stationery product manufacturing 325120 Industrial gas manufacturing 326111 Plastics bag and pouch manufacturing 326112 Plastics packaging film and sheet mfg. 326113 Nonpackaging plastics film and sheet mfg. 332111 Iron and steel forging 333111 Farm machinery and equipment mfg. 333415 Air-conditioning, refrigeration, and forced air heating equipment mfg. 333511 Industrial mold mfg. 333997 Scale and balance mfg. 334610 Manufacturing and reproducing magnetic and optical media 335314 Relay and industrial control mfg. 335912 Primary battery mfg. 561720 Janitorial services