June 2019 Producer Price Index

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The Producer Price Index for final demand advanced 0.1 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.1 percent in May and 0.2 percent in April. (See table A.) On an unadjusted basis, the final demand index rose 1.7 percent for the 12 months ended in June, the lowest rate of increase since advancing 1.7 percent in January 2017.

In June, the rise in final demand prices is attributable to a 0.4-percent increase in the index for final demand services. Conversely, prices for final demand goods fell 0.4 percent.

The index for final demand less foods, energy, and trade services was unchanged in June following advances of 0.4 percent in both April and May. For the 12 months ended in June, prices for final demand less foods, energy, and trade services climbed 2.1 percent.

Final Demand

Final demand services: The index for final demand services rose 0.4 percent in June, the largest increase since climbing 0.8 percent in October 2018. Most of the June advance is attributable to margins for final demand trade services, which moved up 1.3 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services rose 0.3 percent, while the index for final demand services less trade, transportation, and warehousing was unchanged.

Product detail: Over a quarter of the June increase in prices for final demand services can be traced to margins for fuels and lubricants retailing, which jumped 12.2 percent. The indexes for health, beauty, and optical goods retailing; apparel, footwear, and accessories retailing; machinery, equipment, parts, and supplies wholesaling; loan services (partial); and truck transportation of freight also moved higher. In contrast, prices for traveler accommodation services fell 4.0 percent. The indexes for jewelry retailing and airline passenger services also declined. (See table 4.)

Final demand goods: Prices for final demand goods moved down 0.4 percent in June, the largest decrease since falling 0.6 percent in January. The June decline is attributable to a 3.1-percent drop in the index for final demand energy. Conversely, prices for final demand foods climbed 0.6 percent. The index for final demand goods less foods and energy was unchanged.

Product detail: Nearly 60 percent of the June decrease in the index for final demand goods can be traced to a 5.0-percent decline in prices for gasoline. The indexes for diesel fuel, meats, liquefied petroleum gas, iron and steel scrap, and residual fuels also moved lower. In contrast, corn prices rose 19.9 percent. The indexes for ethanol and residential electric power also increased.

Intermediate Demand by Commodity Type

Within intermediate demand in June, prices for processed goods declined 1.1 percent, the index for unprocessed goods fell 3.3 percent, and prices for services advanced 0.2 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand moved down 1.1 percent in June, the largest decline since falling 1.2 percent in December 2018. Most of the broad-based decrease in June can be traced to prices for processed energy goods, which dropped 4.9 percent. The indexes for processed materials less foods and energy and for processed foods and feeds moved down 0.1 percent and 0.3 percent, respectively. For the 12 months ended in June, the index for processed goods for intermediate demand decreased 2.1 percent, the largest decline since falling 3.0 percent for the 12 months ended in August 2016.

Product detail: About half of the June decline in the index for processed goods for intermediate demand can be attributed to diesel fuel prices, which dropped 13.3 percent. The indexes for gasoline, steel mill products, electric power, liquefied petroleum gas, and meats also moved lower. Conversely, prices for ethanol advanced 14.7 percent. The indexes for lubricating oil base stocks and prepared animal feeds also increased. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand fell 3.3 percent in June following a 5.1-percent decrease in May. Most of the broad-based June decline is attributable to prices for unprocessed energy materials, which moved down 7.5 percent. The indexes for unprocessed nonfood materials less energy and for unprocessed foodstuffs and feedstuffs fell 0.5 percent and 0.1 percent, respectively. For the 12 months ended in June, prices for unprocessed goods for intermediate demand dropped 11.0 percent, the largest decline since decreasing 12.8 percent for the 12 months ended in May 2016.

Product detail: Leading the June decline in the index for unprocessed goods for intermediate demand, crude petroleum prices dropped 14.7 percent. The indexes for slaughter hogs, slaughter poultry, iron and steel scrap, hay and hayseeds, and wastepaper also moved lower. In contrast, prices for corn jumped 19.9 percent. The indexes for natural gas and gold ores also advanced.

Services for intermediate demand: The index for services for intermediate demand rose 0.2 percent in June after no change in May. Over three-quarters of the broad-based increase can be attributed to margins for trade services for intermediate demand, which advanced 1.1 percent. Prices for services less trade, transportation, and warehousing for intermediate demand and for transportation and warehousing services for intermediate demand both inched up 0.1 percent. For the 12 months ended in June, the index for services for intermediate demand rose 2.6 percent.

Product detail: In June, a major factor in the advance in the index for services for intermediate demand was margins for machinery and equipment parts and supplies wholesaling, which moved up 2.5 percent. The indexes for nonresidential real estate rents, loan services (partial), fuels and lubricants retailing, truck transportation of freight, and paper and plastics products wholesaling also rose. Conversely, prices for portfolio management dropped 1.8 percent. The indexes for architectural and engineering services and for hardware, building materials, and supplies retailing also decreased.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand declined 0.1 percent in June following a 0.2-percent decrease in the previous month. In June, prices for total goods inputs to stage 4 intermediate demand moved down 0.5 percent. In contrast, the index for total services inputs increased 0.4 percent. (See table D.) Lower prices for diesel fuel, portfolio management, electric power, gasoline, and architectural and engineering services outweighed increases in the indexes for nonresidential real estate rents, machinery and equipment parts and supplies wholesaling, corn, and loan services (partial). (See table 6.) For the 12 months ended in June, prices for stage 4 intermediate demand moved up 1.4 percent.

Stage 3 intermediate demand: The index for stage 3 intermediate demand declined 0.6 percent in June, the largest decrease since falling 1.2 percent in December 2018. In June, prices for total goods inputs to stage 3 intermediate demand dropped 1.8 percent. Conversely, the index for total services inputs advanced 0.4 percent. Decreasing prices for slaughter hogs, gasoline, slaughter poultry, diesel fuel, jet fuel, and architectural and engineering services outweighed increases in the indexes for nonresidential real estate rents, machinery and equipment parts and supplies wholesaling, and raw milk. For the 12 months ended in June, prices for stage 3 intermediate demand fell 0.5 percent, the largest decline since moving down 1.8 percent for the 12 months ended in October 2016.

Stage 2 intermediate demand: The index for stage 2 intermediate demand decreased 1.3 percent in June following a 1.1-percent decline in May. In June, prices for total goods inputs to stage 2 intermediate demand dropped 2.7 percent, and the index for total services inputs fell 0.3 percent. Lower prices for crude petroleum, liquefied petroleum gas, portfolio management, cable network advertising time sales, diesel fuel, and traveler accommodation services outweighed increases in the indexes for corn; thermoplastic resins and materials; and securities brokerage, dealing, and investment advice. For the 12 months ended in June, prices for stage 2 intermediate demand declined 3.3 percent, the largest drop since decreasing 3.3 percent for the 12 months ended in April 2016.

Stage 1 intermediate demand: The index for stage 1 intermediate demand declined 1.0 percent in June, the same as in May. In June, prices for total goods inputs to stage 1 intermediate demand decreased 2.2 percent. In contrast, the index for total services inputs rose 0.4 percent. Lower prices for diesel fuel, iron and steel scrap, crude petroleum, wastepaper, electric power, and traveler accommodation services outweighed rising indexes for nonresidential real estate rents, corn, and ethanol. For the 12 months ended in June, prices for stage 1 intermediate demand declined 2.8 percent, the largest decrease since falling 3.1 percent for 12 months ended in July 2016.

Resampling of Industries

Effective with the release of data for June 2019, the Producer Price Index (PPI) includes data for 17 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 2019, see the current issue of the PPI Detailed Report online at www.bls.gov/ppi/ppidr201906.pdf, or contact the PPI Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-7705.

NAICS Code Industry 213113 Support activities for coal mining 236222 New school building construction 423100 Motor vehicle and parts merchant wholesalers* 423200 Furniture and home furnishing merchant wholesalers* 423300 Lumber and other construction materials merchant wholesalers* 423400 Professional and commercial equipment and supplies merchant wholesalers* 423500 Metal and mineral (except petroleum) merchant wholesalers* 423600 Household appliances and electrical and electronic goods merchant wholesalers* 423700 Hardware, plumbing, and heating equipment and supplies merchant wholesalers* 423800 Machinery and supply merchant wholesalers* 423900 Miscellaneous durable goods, except recyclable material, merchant wholesalers* 442110 Furniture stores 442210 Floor covering stores 488330 Navigational services to shipping 488510 Freight transportation arrangement 531130 Miniwarehouse and self-storage unit operators 623210 Residential developmental disability homes

* These retail trade industries were formerly organized under a single NAICS code, 423000.