February 2020 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 fell 0.6 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.5 percent in January and 0.2 percent in December. (See table A.) On an unadjusted basis, the final demand index increased 1.3 percent for the 12 months ended in February.

In February, 60 percent of the decline in the final demand index can be traced to a 0.9-percent decrease in prices for final demand goods. The index for final demand services moved down 0.3 percent.

Prices for final demand less foods, energy, and trade services inched down 0.1 percent in February, the first decline since falling 0.1 percent in June 2019. For the 12 months ended in February, the index for final demand less foods, energy, and trade services rose 1.4 percent.

Final Demand

Final demand goods: The index for final demand goods fell 0.9 percent in February, the largest decline since moving down 1.1 percent in September 2015. Over 60 percent of the broad-based February decrease can be traced to prices for final demand energy, which dropped 3.6 percent. The indexes for final demand foods and for final demand goods less foods and energy declined 1.6 percent and 0.1 percent, respectively.

Product detail: Nearly one-third of the February decrease in the index for final demand goods is attributable to gasoline prices, which dropped 6.5 percent. The indexes for fresh and dry vegetables, diesel fuel, jet fuel, meats, and light motor trucks also moved lower. In contrast, prices for chicken eggs rose 27.8 percent. The indexes for pharmaceutical preparations and electric power also increased. (See table 4.)

Final demand services: The index for final demand services fell 0.3 percent in February, the largest decline since moving down 0.3 percent in September 2019. In February, over 70 percent of the broad-based decrease can be traced to margins for final demand trade services, which dropped 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 declined 0.1 percent and 0.6 percent, respectively.

Product detail: Leading the February decrease in prices for final demand services, margins for apparel, jewelry, footwear, and accessories retailing dropped 11.7 percent. The indexes for guestroom rental; loan services (partial); food and alcohol wholesaling; health, beauty, and optical goods retailing; and airline passenger services also moved lower. Conversely, margins for machinery, equipment, parts, and supplies wholesaling increased 1.3 percent. The indexes for outpatient care (partial) and wireless telecommunication services also advanced.

Intermediate Demand by Commodity Type

Within intermediate demand in February, prices for processed goods fell 0.9 percent, the index for unprocessed goods dropped 7.7 percent, and prices for services edged down 0.1 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand fell 0.9 percent in February, the largest decline since moving down 1.0 percent in June 2019. Over three-quarters of the broad-based February decrease can be attributed to prices for processed energy goods, which dropped 4.0 percent. The index for processed materials less foods and energy moved down 0.2 percent, and prices for processed foods and feeds declined 0.6 percent. For the 12 months ended in February, the index for processed goods for intermediate demand fell 2.1 percent.

Product detail: Nearly 40 percent of the February decline in prices for processed goods for intermediate demand can be traced to a 10.0-percent drop in the index for diesel fuel. Prices for gasoline, jet fuel, basic organic chemicals, nonferrous mill shapes, and meats also fell. In contrast, the index for motor vehicle parts advanced 0.4 percent. Prices for natural cheese (except cottage cheese) and lubricating oil base stocks also rose. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand fell 7.7 percent in February, the largest decline since moving down 9.5 percent in January 2015. Nearly two-thirds of the February decrease can be attributed to prices for unprocessed energy materials, which dropped 13.6 percent. The index for unprocessed foodstuffs and feedstuffs declined 5.8 percent. Prices for unprocessed nonfood materials less energy moved down 1.5 percent. For the 12 months ended in February, the index for unprocessed goods for intermediate demand decreased 8.2 percent.

Product detail: Over 40 percent of the February decrease in prices for unprocessed goods for intermediate demand can be attributed to a 16.3-percent drop in the index for crude petroleum. Prices for natural gas, slaughter steers and heifers, raw milk, slaughter poultry, and iron and steel also fell. Conversely, the index for corrugated wastepaper jumped 7.0 percent. Prices for slaughter cows and bulls and for strawberries also moved up.

Services for intermediate demand: The index for services for intermediate demand edged down 0.1 percent in February, the first decline since falling 0.6 percent in October 2019. Nearly two-thirds of the February decrease can be traced to margins for trade services for intermediate demand, which moved down 0.4 percent. The index for transportation and warehousing services for intermediate demand fell 0.2 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 rose 1.4 percent.

Product detail: In February, margins for food and alcohol wholesaling fell 1.5 percent. The indexes for nonresidential real estate services, guestroom rental, deposit services (partial), and water transportation of freight also moved lower. In contrast, prices for securities brokerage, dealing, investment advice, and related services rose 3.6 percent. The indexes for wireless telecommunications services; information technology provisioning services; and hardware, building materials, and supplies retailing also increased.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand fell 0.4 percent in February, the largest decrease since moving down 0.5 percent in September 2015. In February, the index for total goods inputs to stage 4 intermediate demand fell 0.5 percent, and prices for total services inputs declined 0.3 percent. (See table D.) Decreases in the indexes for diesel fuel, nonresidential real estate services, gasoline, food and alcohol wholesaling, unprocessed finfish, and basic organic chemicals outweighed advances in the indexes for securities brokerage, dealing, investment advice, and related services; motor vehicle parts; and legal services. (See table 6.) For the 12 months ended in February, prices for stage 4 intermediate demand rose 0.9 percent.

Stage 3 intermediate demand: The index for stage 3 intermediate demand declined 1.4 percent in February, the largest decrease since falling 1.7 percent in September 2015. In February, prices for total goods inputs to stage 3 intermediate demand dropped 2.8 percent, and prices for total services inputs moved down 0.2 percent. Declines in the indexes for jet fuel, gasoline, raw milk, slaughter steers and heifers, slaughter poultry, and nonresidential real estate services outweighed rising prices for securities brokerage, dealing, investment advice, and related services; information technology provisioning services; and slaughter cows and bulls. For the 12 months ended in February, the index for stage 3 intermediate demand moved down 0.5 percent.

Stage 2 intermediate demand: Prices for stage 2 intermediate demand moved down 2.1 percent in February, the largest decline since a 4.4-percent decrease in January 2015. In February, the index for total goods inputs to stage 2 intermediate demand dropped 5.4 percent. Conversely, prices for total services inputs rose 0.2 percent. Decreases in the indexes for crude petroleum; gas fuels; guestroom rental; hay, hayseeds, and oilseeds; non-corrugated paperboard; and corn outweighed rising prices for securities brokerage, dealing, investment advice, and related services; wireless telecommunication services; and hot rolled steel sheet and strip. For the 12 months ended in February, the index for stage 2 intermediate demand fell 3.0 percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand dropped 1.6 percent in February, the largest decrease since declining 3.0 percent in January 2015. In February, the index for total goods inputs to stage 1 intermediate demand fell 2.5 percent, and prices for total services inputs moved down 0.5 percent. Declines in the indexes for diesel fuel, iron and steel scrap, basic organic chemicals, crude petroleum, guestroom rental, and nonresidential real estate services outweighed advances in prices for securities brokerage, dealing, investment advice, and related services; wireless communication services; and corrugated wastepaper. For the 12 months ended in February, the index for stage 1 intermediate demand fell 2.4 percent.

Resampling of Industries

Effective with the release of data for February 2020, the Producer Price Index (PPI) includes data for 15 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 2020, see the current issue of the PPI Detailed Report online at www.bls.gov/ppi/ppidr202002.pdf, or contact the PPI Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-7705.

NAICS Code Industry 311224 Soybean and other oilseed processing 311411 Frozen fruit and vegetable manufacturing 311999 All other miscellaneous food manufacturing 316210 Footwear manufacturing 323117 Books printing 323120 Support activities for printing 324122 Asphalt shingle and coating materials manufacturing 325411 Medicinal and botanical manufacturing 325992 Photographic film and chemical manufacturing 332313 Plate work manufacturing 332912 Fluid power valve and hose fitting manufacturing 333514 Special tool, die, jig, and fixture manufacturing 334112 Computer storage device manufacturing 721110 Hotels and motels, except casino hotels 721120 Casino hotels