April 2019 Producer Price Index

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The Producer Price Index for final demand rose 0.2 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.6 percent in March and 0.1 percent in February. (See table A.) On an unadjusted basis, the final demand index increased 2.2 percent for the 12 months ended in April.

Leading the April rise in the index for final demand, prices for final demand goods climbed 0.3 percent. The index for final demand services edged up 0.1 percent, and prices for final demand construction advanced 1.6 percent.

The index for final demand less foods, energy, and trade services moved up 0.4 percent in April, the largest increase since rising 0.5 percent in January 2018. For the 12 months ended in April, prices for final demand less foods, energy, and trade services advanced 2.2 percent.

Final Demand

Final demand goods: The index for final demand goods moved up 0.3 percent in April, the third consecutive increase. The April advance can be traced to prices for final demand energy, which rose 1.8 percent. In contrast, the index for final demand foods fell 0.2 percent. Prices for final demand goods less foods and energy were unchanged.

Product detail: Most of the April rise in the index for final demand goods is attributable to prices for gasoline, which increased 5.9 percent. The indexes for meats; search, detection, navigation, guidance systems, and related equipment; electric power; pharmaceutical preparations; and processed young chickens also moved higher. Conversely, prices for fresh and dry vegetables decreased 11.6 percent. The indexes for thermoplastic resins and materials and for liquefied petroleum gas also declined. (See table 4.)

Final demand services: Prices for final demand services inched up 0.1 percent in April following a 0.3-percent advance in March. Leading the increase in April, the index for final demand services less trade, transportation, and warehousing rose 0.3 percent. Prices for final demand transportation and warehousing services climbed 1.0 percent. In contrast, margins for final demand trade services fell 0.5 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Most of the April advance in the index for final demand services can be traced to prices for portfolio management, which jumped 5.3 percent. The indexes for hospital outpatient care; transportation of passengers (partial); machinery, equipment, parts, and supplies wholesaling; and fuels and lubricants retailing also moved higher. Conversely, margins for food and alcohol retailing decreased 3.1 percent. The indexes for traveler accommodation services; health, beauty, and optical goods retailing; and long-distance motor carrying also declined.

Intermediate Demand by Commodity Type

Within intermediate demand in April, prices for processed goods fell 0.1 percent, the index for unprocessed goods advanced 2.7 percent, and prices for services moved up 0.3 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand fell 0.1 percent in April following two consecutive increases. The decrease was the result of a 0.4-percent decline in prices for processed materials less foods and energy. In contrast, the indexes for processed energy goods and for processed foods and feeds both rose 0.6 percent. For the 12 months ended is April, prices for processed goods for intermediate demand moved up 0.7 percent.

Product detail: Leading the April decline in the index for processed goods for intermediate demand, prices for thermoplastic resins and materials fell 6.7 percent. The indexes for diesel fuel, hot rolled steel sheet and strip, primary basic organic chemicals, and agricultural chemicals and chemical products also moved lower. Conversely, prices for gasoline advanced 5.9 percent. The indexes for meats, commercial electric power, and motor vehicle parts also increased. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand increased 2.7 percent in April, the largest rise since a 3.7-percent advance in December 2018. In April, prices for unprocessed energy materials and for unprocessed foodstuffs and feedstuffs both increased 3.7 percent. In contrast, the index for unprocessed nonfood materials less energy fell 1.2 percent. For the 12 months ended in April, prices for unprocessed goods for intermediate demand decreased 2.0 percent.

Product detail: A major factor in the increase in prices for unprocessed goods for intermediate demand was the index for crude petroleum, which jumped 13.9 percent. Prices for slaughter hogs; hay, hayseeds, and oilseeds; slaughter steers and heifers; aluminum base scrap; and slaughter poultry also increased. Conversely, the index for carbon steel scrap declined 3.7 percent. Prices for natural gas and for slaughter cows and bulls also fell.

Services for intermediate demand: The index for services for intermediate demand climbed 0.3 percent in April after rising 0.4 percent in March. Over 40 percent of the broad-based increase in April 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 advanced 0.7 percent, and the index for transportation and warehousing services for intermediate demand climbed 0.6 percent. For the 12 months ended in April, prices for services for intermediate demand moved up 2.8 percent.

Product detail: A major factor in the rise in prices for services for intermediate demand was the index for securities brokerage, dealing, investment advice, and related services, which advanced 1.2 percent. The indexes for portfolio management; metals, minerals, and ores wholesaling; machinery and equipment parts and supplies wholesaling; transportation of passengers (partial); and hardware, building materials, and supplies retailing also moved higher. In contrast, prices for staffing services fell 1.2 percent. The indexes for business loans (partial) and for paper and plastics products wholesaling also declined.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand increased 0.3 percent in April, the third consecutive rise. In April, the index for total services inputs to stage 4 intermediate demand advanced 0.5 percent, and prices for total goods inputs edged up 0.1 percent. (See table D.) Increases in the indexes for portfolio management; machinery and equipment parts and supplies wholesaling; metals, minerals, and ores wholesaling; gasoline; engineering services; and meats outweighed decreasing prices for diesel fuel, staffing services, and legal services. (See table 6.) For the 12 months ended in April, the index for stage 4 intermediate demand moved up 2.5 percent.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand advanced 0.9 percent in April, the largest rise since a 1.4-percent jump in October 2018. In April, 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 slaughter hogs; gasoline; metals, minerals, and ores wholesaling; slaughter steers and heifers; slaughter poultry; and asphalt outweighed declines in the indexes for agricultural chemicals and chemical products, slaughter cows and bulls, and business loans (partial). For the 12 months ended in April, prices for stage 3 intermediate demand advanced 1.9 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand rose 0.5 percent in April following a 1.1-percent increase in March. In April, prices for total goods inputs to stage 2 intermediate demand climbed 0.7 percent, and the index for total services inputs moved up 0.3 percent. Advances in the indexes for crude petroleum; portfolio management; securities brokerage, dealing, investment advice, and related services; transportation of passengers (partial); hay, hayseeds, and oilseeds; and hardware, building materials, and supplies retailing outweighed falling prices for natural gas, thermoplastic resins and materials, and staffing services. For the 12 months ended in April, the index for stage 2 intermediate demand climbed 0.4 percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand were unchanged in April following a 1.1-percent increase in March. In April, the index for total services inputs to stage 1 intermediate demand moved up 0.6 percent. Conversely, prices for total goods inputs fell 0.4 percent. Advances in the indexes for metals, minerals, and ores wholesaling; crude petroleum; aluminum base scrap; transportation of passengers (partial); and gasoline offset lower prices for diesel fuel, carbon steel scrap, wastepaper, traveler accommodation services, and natural gas. For the 12 months ended in April, the index for stage 1 intermediate demand increased 0.6 percent.