June 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 June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This decrease followed a 0.4-percent increase in May and a 1.3-percent decline in April. (See table A.) On an unadjusted basis, the final demand index moved down 0.8 percent for the 12 months ended in June.

In June, the decrease in the final demand index is attributable to a 0.3-percent decline in prices for final demand services. In contrast, the index for final demand goods rose 0.2 percent.

Prices for final demand less foods, energy, and trade services advanced 0.3 percent in June, the largest increase since a 0.3-percent rise in January. For the 12 months ended in June, prices for final demand less foods, energy, and trade services edged down 0.1 percent.

Final Demand

Final demand services: The index for final demand services moved down 0.3 percent in June, the largest decrease since falling 0.3 percent in February. The June decline can be attributed to margins for final demand trade services, which dropped 1.8 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Conversely, the indexes for final demand services less trade, transportation, and warehousing and for final demand transportation and warehousing services increased 0.3 percent and 0.9 percent, respectively.

Product detail: Eighty percent of the June decline in the index for final demand services can be traced to a 7.3-percent drop in margins for machinery and vehicle wholesaling. The indexes for apparel, jewelry, footwear, and accessories retailing; fuels and lubricants retailing; dental care; deposit services (partial); and long-distance motor carrying also fell. In contrast, prices for hospital inpatient care rose 0.8 percent. The indexes for transportation of passengers (partial) and automobile retailing (partial) also increased. (See table 4.)

Final demand goods: The index for final demand goods rose 0.2 percent in June after increasing 1.6 percent in May. Leading the June advance, prices for final demand energy jumped 7.7 percent. The index for final demand goods less foods and energy inched up 0.1 percent. Conversely, prices for final demand foods dropped 5.2 percent.

Product detail: In June, a major factor in the increase in prices for final demand goods was the gasoline index, which rose 26.3 percent. Prices for diesel fuel; jet fuel; natural, processed, and imitation cheese; basic organic chemicals; and fresh and dry vegetables also advanced. In contrast, prices for meats dropped 27.7 percent. The indexes for residential electric power and light motor trucks also declined.

Intermediate Demand by Commodity Type

Within intermediate demand in June, prices for processed goods rose 0.9 percent, the index for unprocessed goods increased 3.1 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 increased 0.9 percent in June, the largest rise since moving up 1.1 percent in May 2018. Leading the June advance, prices for processed energy goods jumped 7.2 percent. The index for processed materials less foods and energy moved up 0.5 percent. Conversely, the index for processed foods and feeds decreased 5.5 percent. For the 12 months ended in June, prices for processed goods for intermediate demand declined 5.0 percent.

Product Detail: More than half of the June increase in prices for processed goods for intermediate demand can be attributed to the index for diesel fuel, which rose 28.0 percent. Prices for gasoline; basic organic chemicals; jet fuel; natural, processed, and imitation cheese; and residual fuels also advanced. In contrast, the index for meats fell 27.7 percent. Prices for lubricating oil base stocks and steel pipe and tube also decreased. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand increased 3.1 percent in June, following an 8.9-percent rise in May. Leading the June advance, prices for unprocessed energy materials jumped 16.8 percent. The index for unprocessed nonfood materials less energy rose 1.1 percent. Conversely, prices for unprocessed foodstuffs and feedstuffs decreased 5.6 percent. For the 12 months ended in June, the index for unprocessed goods for intermediate demand declined 14.6 percent.

Product Detail: A major factor in the June increase in prices for unprocessed goods for intermediate demand was the index for crude petroleum, which jumped 71.9 percent. Prices for corn, nonferrous scrap, hay and hayseeds, ungraded chicken eggs, and fresh vegetables (except potatoes) also moved higher. In contrast, the index for slaughter barrows and gilts dropped 39.8 percent. Prices for natural gas and carbon steel scrap also decreased.

Services for intermediate demand: Prices for services for intermediate demand moved up 0.2 percent in June, the first increase since a 0.2-percent rise in January. The June advance can be traced to the index for services less trade, transportation, and warehousing for intermediate demand, which climbed 0.4 percent. Conversely, margins for trade services for intermediate demand fell 0.5 percent, and prices for transportation and warehousing services for intermediate demand decreased 0.2 percent. For the 12 months ended in June, the index for services for intermediate demand moved down 1.5 percent.

Product Detail: Leading the June increase in prices for services for intermediate demand, the index for gross rents for retail properties rose 14.8 percent. The indexes for portfolio management; chemicals and allied products wholesaling; securities brokerage, dealing, investment advice, and related services; transportation of passengers (partial); and staffing services also moved up. In contrast, margins for metals, minerals, and ores wholesaling fell 4.5 percent. The indexes for investment banking and services related to air transportation also decreased.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand moved up 0.3 percent in June, the largest increase since a 0.3-percent rise in December 2019. In June, the index for total services inputs to stage 4 intermediate demand climbed 0.5 percent, and prices for total goods inputs advanced 0.3 percent. (See table D.) Increases in the indexes for gross rents for retail properties; diesel fuel; natural, processed, and imitation cheese; portfolio management; gasoline; and chemicals and allied products wholesaling outweighed decreases in the indexes for meats; machinery and equipment parts and supplies wholesaling; and metals, minerals, and ores wholesaling. (See table 6.) For the 12 months ended in June, prices for stage 4 intermediate demand declined 1.2 percent.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand advanced 0.4 percent in June, the largest increase since a 0.5-percent rise in October 2019. In June, the index for total goods inputs to stage 3 intermediate demand moved up 0.8 percent, while prices for total services inputs were unchanged. Increases in the indexes for gasoline, diesel fuel, gross rents for retail properties, basic organic chemicals, chemicals and allied products wholesaling, and heating oil outweighed declines in the indexes for slaughter barrows and gilts, raw milk, and machinery and equipment parts and supplies wholesaling. For the 12 months ended in June, prices for stage 3 intermediate demand fell 6.9 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand moved up 1.9 percent in June, the same as in May. In June, prices for total goods inputs to stage 2 intermediate demand advanced 4.9 percent, and the index for total services inputs increased 0.3 percent. Rising prices for crude petroleum; portfolio management; plastic resins and materials; basic organic chemicals; securities brokerage, dealing, investment advice, and related services; and transportation of passengers (partial) outweighed decreases in the indexes for investment banking, natural gas, and lubricating oil base stocks. For the 12 months ended in June, prices for stage 2 intermediate demand fell 5.2 percent.

Stage 1 intermediate demand: The index for stage 1 intermediate demand advanced 1.7 percent in June, the largest increase since rising 1.9 percent in January 2011. Prices for total goods inputs to stage 1 intermediate demand jumped 3.2 percent, and the index for total services inputs moved up 0.3 percent. Advances in prices for diesel fuel, basic organic chemicals, crude petroleum, gross rents for retail properties, gasoline, and nonferrous scrap outweighed decreases in the indexes for metals, minerals, and ores wholesaling; natural gas; and meats. For the 12 months ended in June, the index for stage 1 intermediate demand fell 5.7 percent.

Resampling of Industries

Effective with the release of data for June 2020, 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 2020, see the current issue of the PPI Detailed Report online at www.bls.gov/ppi/ppidr202006.pdf, or contact the PPI Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-7705.

NAICS Code Industry 236223 New office building construction 311119 Other animal food manufacturing 312120 Breweries 312140 Distilleries 315110 Hosiery and sock mills 321214 Truss manufacturing 325110 Petrochemical manufacturing 333921 Elevator and moving stairway manufacturing 333991 Power-driven handtool manufacturing 334290 Other communications equipment manufacturing 335313 Switchgear and switchboard apparatus manufacturing 336412 Aircraft engine and engine parts manufacturing 336611 Ship building and repairing 441210 Recreational vehicle dealers 441222 Boat dealers 493110 General warehousing and storage 561380 Staffing services (except PEOs)

Check out the latest PPI Monthly Labor Review article, Producer price inflation slows in 2019, as prices for both services and goods decelerate from a year earlier, online at www.bls.gov/opub/mlr/2020/article/producer-price-inflation-slows-in-2019.htm.