March 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 rose 0.6 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices edged up 0.1 percent in February and decreased 0.1 percent in January. (See table A.) On an unadjusted basis, the final demand index increased 2.2 percent for the 12 months ended in March, the largest 12-month rise since a 2.5-percent advance in December 2018.

In March, over 60 percent of the increase in the index for final demand can be traced to a 1.0- percent advance in prices for final demand goods. The index for final demand services moved up 0.3 percent.

The index for final demand less foods, energy, and trade services was unchanged in March following a 0.1-percent advance in February. For the 12 months ended in March, prices for final demand less foods, energy, and trade services rose 2.0 percent.

Final demand

Final demand goods: The index for final demand goods moved up 1.0 percent in March, the largest advance since a 1.0-percent rise in May 2015. In March, over 80 percent of the broad-based increase can be traced to prices for final demand energy, which jumped 5.6 percent. The index for final demand goods less foods and energy rose 0.2 percent. Prices for final demand foods advanced 0.3 percent.

Product detail: Over 60 percent of the increase in the index for final demand goods is attributable to a 16.0-percent jump in gasoline prices. The indexes for diesel fuel, fresh and dry vegetables, cigarettes, beverages and beverage materials, and residential electric power also moved higher. In contrast, prices for pork declined 8.7 percent. The indexes for light motor trucks and liquefied petroleum gas also decreased. (See table 4.)

Final demand services: Prices for final demand services rose 0.3 percent in March after no change in February. The increase is attributable to the index for final demand trade services, which advanced 1.1 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Conversely, prices for final demand transportation and warehousing services declined 0.8 percent. The index for final demand less trade, transportation, and warehousing was unchanged.

Product detail: Nearly a third of the increase in the index for final demand services can be traced to margins for apparel, jewelry, footwear, and accessories retailing, which rose 4.2 percent. The indexes for machinery, equipment, parts, and supplies wholesaling; deposit services (partial); food and alcohol retailing; health, beauty, and optical goods retailing; and portfolio management also advanced. In contrast, prices for long-distance motor carrying fell 1.2 percent. The indexes for fuels and lubricants retailing and for residential real estate loans (partial) also declined.

Intermediate Demand by Commodity Type

Within intermediate demand in March, prices for processed goods rose 0.8 percent, the index for unprocessed goods advanced 2.3 percent, and prices for services moved up 0.4 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand climbed 0.8 percent in March following a 0.4-percent rise in February. The March increase was the result of a 4.3-percent advance in prices for processed energy goods. Conversely, the index for processed foods and feeds fell 0.3 percent. Prices for processed materials less foods and energy were unchanged. For the 12 months ended in March, the index for processed goods for intermediate demand climbed 1.3 percent.

Product detail: In March, nearly 60 percent of the rise in the index for processed goods for intermediate demand is attributable to a 12.6-percent jump in diesel fuel prices. The indexes for gasoline, jet fuel, primary basic organic chemicals, residual fuels, and natural cheese (except cottage cheese) also moved higher. In contrast, prices for pork fell 8.7 percent. The indexes for natural gas to electric utilities and for plastic resins and materials also declined. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand advanced 2.3 percent following two consecutive decreases. Most of the increase can be traced to a 7.3-percent rise in prices for unprocessed energy materials. The index for unprocessed nonfood materials less energy moved up 1.2 percent. Conversely, prices for unprocessed foodstuffs and feedstuffs fell 2.3 percent. For the 12 months ended in March, the index for unprocessed goods for intermediate demand declined 3.5 percent.

Product detail: Leading the March increase in the index for unprocessed goods for intermediate demand, prices for crude petroleum jumped 15.3 percent. The indexes for raw milk, carbon steel scrap, natural gas, fresh and dry vegetables, and unprocessed finfish also moved higher. In contrast, prices for slaughter poultry fell 7.6 percent. The indexes for hay, hayseeds, and oilseeds and corrugated wastepaper also moved lower.

Services for intermediate demand: The index for services for intermediate demand climbed 0.4 percent in March, the largest increase since advancing 0.6 percent in October 2018. Nearly two-thirds of the March rise can be traced to prices for services less trade, transportation, and warehousing for intermediate demand, which moved up 0.3 percent. Margins for trade services for intermediate demand increased 0.8 percent. Conversely, the index for transportation and warehousing services for intermediate demand declined 0.2 percent. For the 12 months ended in March, prices for services for intermediate demand advanced 2.6 percent.

Product detail: About 30 percent of the rise in prices for services for intermediate demand is attributable to the index for staffing services, which climbed 1.8 percent. The indexes for deposit services (partial); portfolio management; machinery and equipment parts and supplies wholesaling; cable network advertising time sales; and courier, messenger, and U.S. postal services also moved higher. In contrast, prices for long-distance motor carrying fell 1.2 percent. The indexes for loan services (partial) and metals, minerals, and ores wholesaling also decreased.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand increased 0.5 percent in March, the largest advance since rising 0.6 percent in October 2018. In March, the index for total goods inputs to stage 4 intermediate demand moved up 0.5 percent, and prices for total services inputs climbed 0.4 percent. (See table D.) Increases in the indexes for diesel fuel, gasoline, machinery and equipment parts and supplies wholesaling, portfolio management, staffing services, and deposit services (partial) outweighed decreasing prices for gross rents for retail properties, pork, and loan services (partial). (See table 6.) For the 12 months ended in March, the index for stage 4 intermediate demand moved up 2.3 percent.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand advanced 0.8 percent in March, the largest rise since a 1.4-percent jump in October 2018. In March, the index for total goods inputs to stage 3 intermediate demand climbed 1.3 percent, and prices for total services inputs moved up 0.3 percent. Increases in the indexes for gasoline, raw milk, diesel fuel, jet fuel, machinery and equipment parts and supplies wholesaling, and deposit services (partial) outweighed declines in the indexes for slaughter poultry; slaughter steers and heifers; and metals, minerals, and ores wholesaling. For the 12 months ended in March, prices for stage 3 intermediate demand advanced 1.2 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand rose 1.1 percent in March following two consecutive declines. In March, prices for total goods inputs to stage 2 intermediate demand jumped 2.2 percent, and the index for total services inputs moved up 0.4 percent. Higher prices for crude petroleum, staffing services, natural gas, cable network advertising time sales, portfolio management, and diesel fuel outweighed falling prices for plastic resins and materials; hay, hayseeds, and oilseeds; and airline passenger services. For the 12 months ended in March, the index for stage 2 intermediate demand advanced 0.8 percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand climbed 1.1 percent in March, the largest increase since a 1.1-percent rise in October 2018. In March, the index for total goods inputs to stage 1 intermediate demand jumped 1.8 percent, and total services inputs moved up 0.2 percent. Advancing prices for diesel fuel, carbon steel scrap, gasoline, crude petroleum, deposit services (partial), and primary basic organic chemicals outweighed decreases in the indexes for corrugated wastepaper, corn, and airline passenger services. For the 12 months ended in March, prices for stage 1 intermediate demand increased 1.0 percent.