March 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 0.2 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices declined 0.6 percent in February and increased 0.5 percent in January. (See table A.) On an unadjusted basis, the final demand index advanced 0.7 percent for the 12 months ended in March.

In March, the decrease in the final demand index can be traced to a 1.0-percent drop in prices for final demand goods. The index for final demand services moved up 0.2 percent.

Prices for final demand less foods, energy, and trade services declined 0.2 percent in March, the largest decrease since falling 0.2 percent in October 2015. For the 12 months ended in March, the index for final demand less foods, energy, and trade services rose 1.0 percent.

Final Demand

Final demand goods: The index for final demand goods fell 1.0 percent in March, the largest decline since moving down 1.1 percent in September 2015. The March decrease can be attributed to prices for final demand energy, which dropped 6.7 percent. In contrast, the index for final demand goods less foods and energy advanced 0.2 percent. Prices for final demand foods were unchanged.

Product detail: Eighty percent of the March decrease in the index for final demand goods can be traced to prices for gasoline, which dropped 16.8 percent. The indexes for diesel fuel, meats, jet fuel, liquefied petroleum gas, and industrial chemicals also moved lower. Conversely, prices for motor vehicles rose 0.8 percent. The indexes for chicken eggs and frozen specialty foods also increased. (See table 4.)

Final demand services: The index for final demand services rose 0.2 percent in March after declining 0.3 percent in February. In March, the increase can be traced to margins for final demand trade services, which moved up 1.4 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) In contrast, the index for final demand transportation and warehousing services decreased 3.3 percent. Prices for final demand services less trade, transportation, and warehousing were unchanged.

Product detail: Leading the March increase in the index for final demand services, margins for apparel, jewelry, footwear, and accessories retailing jumped 8.1 percent. The indexes for fuels and lubricants retailing; securities brokerage, dealing, and investment advice; loan services (partial); food retailing; and inpatient care also moved higher. Conversely, prices for airline passenger services decreased 10.0 percent. The indexes for deposit services (partial) and health, beauty, and optical goods retailing also declined.

Intermediate Demand by Commodity Type

Within intermediate demand in March, prices for processed goods fell 1.1 percent, the index for unprocessed goods dropped 8.0 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 1.1 percent in March, the largest decline since moving down 1.3 percent in December 2018. Most of the broad-based March decrease can be attributed to a 5.9-percent drop in prices for processed energy goods. The indexes for processed foods and feeds and for processed materials less foods and energy moved down 0.8 percent and 0.1 percent, respectively. For the 12 months ended in March, prices for processed goods for intermediate demand declined 3.7 percent.

Product Detail: A major factor in the March decrease in prices for processed goods for intermediate demand was the index for diesel fuel, which declined 12.6 percent. Prices for gasoline, industrial chemicals, lubricating oil base stocks, jet fuel, and meats also fell. In contrast, the index for cold rolled steel sheet and strip rose 4.1 percent. Prices for lumber and industrial electric power also increased. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand fell 8.0 percent in March, the largest decrease since moving down 9.5 percent in January 2015. Over 80 percent of the March decline can be traced to a 19.1-percent drop in prices for unprocessed energy materials. The index for unprocessed foodstuffs and feedstuffs moved down 3.6 percent. Conversely, prices for unprocessed nonfood materials less energy advanced 1.3 percent. For the 12 months ended in March, the index for unprocessed goods for intermediate demand declined 15.4 percent, the largest decrease since a 16.4-percent drop in February 2016.

Product Detail: More than 80 percent of the March decrease in prices for unprocessed goods for intermediate demand is attributable to a 34.6-percent drop in the index for crude petroleum. Prices for slaughter cattle; slaughter chickens; coal; hay, hayseeds, and oilseeds; and copper base scrap also declined. In contrast, the index for carbon steel scrap increased 3.8 percent. Prices for ungraded chicken eggs and gold ores also rose.

Services for intermediate demand: The index for services for intermediate demand edged down 0.1 percent in March, the same as in February. Leading the March decline, prices for transportation and warehousing services for intermediate demand fell 1.3 percent. The index for services less trade, transportation, and warehousing for intermediate demand decreased 0.1 percent. Conversely, margins for trade services for intermediate demand advanced 0.7 percent. For the 12 months ended in March, the index for services for intermediate demand rose 1.0 percent.

Product detail: A 10.0-percent decline in the index for airline passenger services was a major factor in the March decrease in prices for services for intermediate demand. The indexes for services related to securities brokerage and dealing (partial), deposit services (partial), marketing consulting services, and machinery and equipment parts and supplies wholesaling also moved lower. In contrast, margins for metals, minerals, and ores wholesaling climbed 3.0 percent. The indexes for securities brokerage, dealing, and investment advice; business loans (partial); and fuels and lubricants retailing also advanced.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand moved down 0.3 percent in March, the third consecutive decline. In March, the index for total goods inputs to stage 4 intermediate demand fell 0.4 percent, while prices for total services inputs were unchanged. (See table D.) Decreases in the indexes for diesel fuel, gasoline, services related to securities brokerage and dealing (partial), deposit services (partial), machinery and equipment parts and supplies wholesaling, and marketing consulting services outweighed rising prices for securities brokerage, dealing, and investment advice; business loans (partial); and particleboard and fiberboard. (See table 6.) For the 12 months ended in March, the index for stage 4 intermediate demand advanced 0.2 percent.

Stage 3 intermediate demand: The index for stage 3 intermediate demand decreased 1.4 percent in March, the same as in February. In March, prices for total goods inputs to stage 3 intermediate demand dropped 2.9 percent. Conversely, the index for total services inputs increased 0.2 percent. Falling prices for gasoline, slaughter cattle, slaughter chickens, diesel fuel, jet fuel, and services related to securities brokerage and dealing (partial) outweighed advances in the indexes for securities brokerage, dealing, and investment advice; ungraded chicken eggs; and slaughter hogs. For the 12 months ended in March, prices for stage 3 intermediate demand declined 2.5 percent, the largest 12- month decrease since moving down 3.7 percent in August 2016.

Stage 2 intermediate demand: Prices for stage 2 intermediate demand moved down 2.6 percent in March, the largest decline since dropping 4.4 percent in January 2015. In March, the index for total goods inputs to stage 2 intermediate demand fell 6.3 percent, and prices for total services inputs inched down 0.1 percent. Decreases in the indexes for crude petroleum, services related to securities brokerage and dealing (partial), gas fuels, airline passenger services, marketing consulting services, and coal outweighed rising prices for securities brokerage, dealing, and investment advice; investment banking; and cold rolled steel sheet and strip. For the 12 months ended in March, the index for stage 2 intermediate demand declined 5.6 percent, the largest decrease since dropping 8.3 percent for the 12 months ended December 2015.

Stage 1 intermediate demand: The index for stage 1 intermediate demand moved down 1.2 percent in March following a 1.6-percent decline in February. In March, prices for total goods inputs to stage 1 intermediate demand decreased 2.2 percent, and the index for total services inputs fell 0.2 percent. Lower prices for diesel fuel, crude petroleum, industrial chemicals, airline passenger services, gasoline, and deposit services (partial) outweighed increases in the indexes for securities brokerage, dealing, and investment advice; carbon steel scrap; and business loans (partial). For the 12 months ended in March, the index for stage 1 intermediate demand declined 4.4 percent.