February 2021 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 increased 0.5 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This rise followed advances of 1.3 percent in January and 0.3 percent in December. (See table A.) On an unadjusted basis, the final demand index moved up 2.8 percent for the 12 months ended in February, the largest increase since rising 3.1 percent for the 12 months ended October 2018.

Most of the February advance in prices for final demand can be traced to a 1.4-percent rise in the index for final demand goods. Prices for final demand services increased 0.1 percent.

Prices for final demand less foods, energy, and trade services moved up 0.2 percent in February, the tenth consecutive advance. For the 12 months ended in February, the index for final demand less foods, energy, and trade services rose 2.2 percent, the largest increase since a 2.4-percent advance for the 12 months ended May 2019.

Final Demand

Final demand goods: The index for final demand goods rose 1.4 percent in February, the same as in January. Over two-thirds of the broad-based February increase can be traced to prices for final demand energy, which climbed 6.0 percent. The indexes for final demand goods less foods and energy and for final demand foods advanced 0.3 percent and 1.3 percent, respectively.

Product detail: Forty percent of the February increase in the index for final demand goods is attributable to gasoline prices, which jumped 13.1 percent. The indexes for diesel fuel, beef and veal, basic organic chemicals, residential electric power, and chicken eggs also moved higher. Conversely, prices for fresh and dry vegetables fell 16.7 percent. The indexes for iron and steel scrap and for distilled and bottled liquor (except brandy) also declined. (See table 4.)

Final demand services: The index for final demand services inched up 0.1 percent in February after increasing 1.3 percent in January. Two-thirds of the February advance in prices for final demand services can be traced to a 1.1-percent rise in the index for final demand transportation and warehousing services. Margins for final demand trade services edged up 0.1 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) The index for final demand services less trade, transportation, and warehousing was unchanged.

Product detail: A 3.6-percent increase in the index for transportation of passengers (partial) was a major factor in the February advance in prices for final demand services. The indexes for securities brokerage, dealing, and investment advice; machinery and equipment parts and supplies wholesaling; health, beauty, and optical goods retailing; and hardware, building materials, and supplies retailing also moved higher. In contrast, margins for apparel, jewelry, footwear, and accessories retailing decreased 6.5 percent. The indexes for traveler accommodation services, machinery and vehicle wholesaling, and portfolio management also declined.

Intermediate Demand by Commodity Type

Within intermediate demand in February, prices for processed goods increased 2.7 percent, the index for unprocessed goods rose 4.3 percent, and prices for services moved up 0.7 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand jumped 2.7 percent in February, the largest rise since a 2.7-percent advance in July 2008. Half of the broad-based February increase can be traced to a 1.8-percent advance in prices for processed materials less foods and energy. The indexes for processed energy goods and for processed foods and feeds also moved up 6.5 percent and 2.2 percent, respectively. For the 12 months ended in February, prices for processed goods for intermediate demand jumped 6.6 percent, the largest advance since increasing 6.7 percent for the 12 months ended July 2018.

Product Detail: A major factor in the February increase in the index for processed goods for intermediate demand was an 11.8-percent jump in prices for steel mill products. The indexes for diesel fuel, gasoline, basic organic chemicals, plastic resins and materials, and beef and veal also moved higher. Conversely, prices for distilled and bottled liquor (excluding brandy) dropped 8.3 percent. The indexes for pork and for industrial electric power also declined. (See table 5.)

Unprocessed goods for intermediate demand: Prices for unprocessed goods for intermediate demand increased 4.3 percent in February, the tenth consecutive rise. Over three-quarters of the February advance can be traced to a 9.8-percent jump in the index for unprocessed energy materials. Prices for unprocessed foodstuffs and feedstuffs rose 3.5 percent. In contrast, the index for unprocessed nonfood materials less energy decreased 1.3 percent. For the 12 months ended in February, prices for unprocessed goods for intermediate demand jumped 19.0 percent, the largest increase since advancing 19.2 percent for the 12 months ended February 2017.

Product Detail: Forty percent of the February increase in the index for unprocessed goods for intermediate demand can be traced to a 14.5-percent rise in prices for natural gas. The indexes for crude petroleum, slaughter chickens, corn, raw milk, and slaughter cattle also advanced. Conversely, prices for iron and steel scrap decreased 10.3 percent. The indexes for fresh vegetables (except potatoes) and for coal also fell.

Services for intermediate demand: The index for services for intermediate demand increased 0.7 percent in February after rising 1.3 percent in January. Over 60 percent of the broad-based advance in February is attributable to margins for trade services for intermediate demand, which jumped 2.0 percent. Prices for transportation and warehousing services for intermediate demand increased 1.5 percent, and the index for services less trade, transportation, and warehousing for intermediate demand edged up 0.1 percent. For the 12 months ended in February, prices for services for intermediate demand climbed 3.7 percent, the largest advance since 12-month data were first calculated in November 2010.

Product detail: Over 40 percent of the February rise in prices for services for intermediate demand can be traced to margins for machinery and equipment parts and supplies wholesaling, which moved up 4.7 percent. The indexes for metals, minerals, and ores wholesaling; securities brokerage, dealing, and investment advice; hardware, building materials, and supplies retailing; arrangement of freight and cargo transportation; and gross rents of office buildings also increased. In contrast, prices for gross rents of retail properties fell 7.7 percent. The indexes for marketing consulting services and for food and alcohol wholesaling also declined.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand advanced 1.1 percent in February following a 1.4-percent rise in January. In February, the index for total goods inputs to stage 4 intermediate demand jumped 1.6 percent, and prices for total services inputs climbed 0.9 percent. (See table D.) Increases in the indexes for steel mill products; machinery and equipment parts and supplies wholesaling; securities brokerage, dealing, and investment advice; metals, minerals, and ores wholesaling; gasoline; and gross rents of office buildings outweighed decreasing prices for gross rents of retail properties, distilled and bottled liquor (excluding brandy), and portfolio management. (See table 6.) For the 12 months ended in February, the index for stage 4 intermediate demand moved up 5.1 percent, the largest advance since rising 5.4 percent for the 12 months ended September 2011.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand rose 2.2 percent in February, the largest advance since the index began in December 2009. In February, the index for total goods inputs to stage 3 intermediate demand jumped 4.1 percent, and prices for total services inputs moved up 0.6 percent. Increases in the indexes for diesel fuel; steel mill products; metals, minerals, and ores wholesaling; arrangement of freight and cargo transportation; slaughter chickens; and raw milk outweighed falling prices for gross rents of retail properties, marketing consulting services, and slaughter turkeys. For the 12 months ended in February, the index for stage 3 intermediate demand rose 4.8 percent, the largest advance since climbing 5.5 percent for the 12 months ended October 2018.

Stage 2 intermediate demand: Prices for stage 2 intermediate demand moved up 2.0 percent in February following a 2.7-percent jump in January. In February, the index for total goods inputs to stage 2 intermediate demand increased 4.4 percent, and prices for total services inputs rose 0.2 percent. Advances in the indexes for gas fuels, crude petroleum, basic organic chemicals, arrangement of freight and cargo transportation, machinery and equipment parts and supplies wholesaling, and steel mill products outweighed declines in the indexes for iron and steel scrap, business loans (partial), and food and alcohol wholesaling. For the 12 months ended in February, prices for stage 2 intermediate demand moved up 8.6 percent, the largest increase since rising 11.8 percent for the 12 months ended September 2011.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand rose 1.9 percent in February, the ninth consecutive increase. In February, the index for total goods inputs to stage 1 intermediate demand jumped 2.8 percent, and prices for total services inputs climbed 1.0 percent. Advances in the indexes for diesel fuel; steel mill products; metals, minerals, and ores wholesaling; hardware, building materials, and supplies retailing; basic organic chemicals; and securities brokerage, dealing, and investment advice outweighed decreases in prices for gross rents of retail properties, traveler accommodation services, and iron and steel scrap. For the 12 months ended in February, the index for stage 1 intermediate demand moved up 7.0 percent, the largest increase since rising 7.2 percent for the 12 months ended July 2018.

Resampling of Industries

Effective with the release of data for February 2021, the Producer Price Index (PPI) includes data for 12 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 2021, see the current issue of the PPI Detailed Report online at www.bls.gov/ppi/ppidr202102.pdf, or contact the PPI Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-7705.

NAICS Code Industry 311352 Confectionery manufacturing from purchased chocolate 325199 All other basic organic chemical manufacturing 327211 Flat glass manufacturing 332312 Fabricated structural metal manufacturing 424100 Paper and paper product merchant wholesalers 424200 Drugs and druggists' sundries merchant wholesalers 424300 Apparel and piece goods merchant wholesalers 424400 Grocery and related product merchant wholesalers 424600 Chemicals and allied products merchant wholesalers 424700 Petroleum and petroleum products merchant wholesalers 424800 Beer, wine, and distilled alcoholic beverage merchant wholesalers 424900 Miscellaneous nondurable goods merchant wholesalers