April 2021 Producer Price Index

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The Producer Price Index for final demand increased 0.6 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 1.0 percent in March and 0.5 percent in February. (See table A.) On an unadjusted basis, the final demand index moved up 6.2 percent for the 12 months ended in April, the largest advance since 12- month data were first calculated in November 2010.

About two-thirds of the April advance in the final demand index can be traced to a 0.6-percent increase in prices for final demand services. The index for final demand goods also moved up 0.6 percent.

The index for final demand less foods, energy, and trade services rose 0.7 percent in April following an increase of 0.6 percent in March. For the 12 months ended in April, prices for final demand less foods, energy, and trade services moved up 4.6 percent, the largest advance since 12-month data were first calculated in August 2014.

Final Demand

Final demand services: Prices for final demand services rose 0.6 percent in April, the fourth consecutive advance. Half of the broad-based increase in April is attributable to the index for final demand services less trade, transportation, and warehousing, which moved up 0.5 percent. Margins for final demand trade services also rose 0.5 percent, and the index for final demand transportation and warehousing services jumped 2.1 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Within the index for final demand services in April, prices for portfolio management rose 1.5 percent. The indexes for airline passenger services; food retailing; fuels and lubricants retailing; physician care; and hardware, building materials, and supplies retailing also moved higher. Conversely, margins for machinery and vehicle wholesaling fell 5.6 percent. The indexes for apparel wholesaling and for securities brokerage, dealing, investment advice, and related services also declined. (See table 4.)

Final demand goods: Prices for final demand goods climbed 0.6 percent in April, after rising 1.7 percent in March. Leading the April advance, the index for final demand goods less foods and energy increased 1.0 percent. Prices for final demand foods moved up 2.1 percent. In contrast, the index for final demand energy fell 2.4 percent.

Product detail: A major factor in the April increase in prices for final demand goods was the index for steel mill products, which jumped 18.4 percent. Prices for beef and veal, pork, residential natural gas, plastic resins and materials, and dairy products also moved higher. Conversely, the index for gasoline fell 3.4 percent. Prices for chicken eggs and for carbon steel scrap also declined.

Intermediate Demand by Commodity Type

Within intermediate demand in April, prices for processed goods increased 1.6 percent, the index for unprocessed goods fell 3.8 percent, and prices for services climbed 0.8 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand moved up 1.6 percent in April, the eleventh consecutive advance. Leading the April increase, prices for processed materials less foods and energy rose 2.9 percent. The index for processed foods and feeds jumped 3.3 percent. In contrast, prices for processed energy goods decreased 4.1 percent. For the 12 months ended in April, the index for processed goods for intermediate demand rose 18.4 percent, the largest advance since increasing 18.9 percent for the 12 months ended February 1980.

Product Detail: Over half of the April rise in the index for processed goods for intermediate demand can be traced to an 18.4-percent jump in prices for steel mill products. The indexes for industrial chemicals, plastic resins and materials, meats, plastic products, and lumber also moved higher. Conversely, prices for diesel fuel fell 7.6 percent. The indexes for electric power and for paving mixtures and blocks also declined. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand moved down 3.8 percent in April, the first decrease since falling 13.7 percent in April 2020. The decline in April 2021 is attributable to prices for unprocessed energy materials, which dropped 17.2 percent. In contrast, the index for unprocessed foodstuffs and feedstuffs increased 7.9 percent, and prices for unprocessed nonfood materials less energy advanced 1.2 percent. For the 12 months ended in April, the index for unprocessed goods for intermediate demand surged 57.6 percent, the largest rise since jumping 59.3 percent for the 12 months ended August 1973.

Product Detail: Leading the April decrease in the index for unprocessed goods for intermediate demand, prices for natural gas dropped 32.5 percent. The indexes for crude petroleum; hay, hayseeds, and oilseeds; carbon steel scrap; ungraded chicken eggs; and wheat also moved lower. Conversely, prices for slaughter livestock increased 19.7 percent. The indexes for nonferrous scrap and for coal also moved higher.

Services for intermediate demand: The index for services for intermediate demand rose 0.8 percent in April, the fifth consecutive increase. Nearly 40 percent of the broad-based advance in April is attributable to margins for trade services for intermediate demand, which moved up 1.5 percent. Prices for services less trade, transportation, and warehousing for intermediate demand rose 0.4 percent, and the index for transportation and warehousing services for intermediate demand increased 2.0 percent. For the 12 months ended in April, prices for services for intermediate demand climbed 6.7 percent, the largest advance since 12-month data were first calculated in November 2010.

Product detail: A major factor in the April rise in prices for services for intermediate demand was the index for hardware, building materials, and supplies retailing, which moved up 7.0 percent. Prices for staffing services, arrangement of freight and cargo transportation, legal services, airline passenger services, and passenger car rental also increased. In contrast, prices for securities brokerage, dealing, investment advice, and related services fell 2.4 percent. The indexes for business loans (partial) and for chemicals and allied products wholesaling also declined.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand increased 1.0 percent in April following a 1.2-percent rise in March. In April, the index for total goods inputs to stage 4 intermediate demand advanced 1.6 percent, and prices for total services inputs moved up 0.5 percent. (See table D.) Increases in the indexes for steel mill products, meats, plastic products, staffing services, portfolio management, and machinery and equipment parts and supplies wholesaling outweighed decreasing prices for electric power; securities brokerage, dealing, investment advice, and related services; and diesel fuel. (See table 6.) For the 12 months ended in April, the index for stage 4 intermediate demand moved up 9.5 percent, the largest advance since 12-month data were first calculated in November 2010.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand rose 2.7 percent in April, following a 2.8-percent increase in March. In April, the index for total goods inputs to stage 3 intermediate demand moved up 4.3 percent, and prices for total services inputs advanced 1.1 percent. Increases in the indexes for slaughter livestock, steel mill products, slaughter poultry, plastic resins and materials, staffing services, and arrangement of freight and cargo transportation outweighed falling prices for diesel fuel, electric power, and tax preparation and planning. For the 12 months ended in April, the index for stage 3 intermediate demand rose 18.4 percent, the largest advance since 12-month data were first calculated in November 2010.

Stage 2 intermediate demand: Prices for stage 2 intermediate demand moved down 2.1 percent in April, the first decrease since a 4.4-percent decline in April 2020. In April 2021, the index for total goods inputs to stage 2 intermediate demand fell 5.7 percent. Conversely prices for total services inputs rose 1.1 percent. Lower prices for gas fuels; crude petroleum; business loans (partial); hay, hayseeds, and oilseeds; carbon steel scrap; and tax preparation and planning outweighed increases in the indexes for staffing services, industrial chemicals, and steel mill products. For the 12 months ended in April, prices for stage 2 intermediate demand moved up 19.6 percent, the largest advance since 12-month data were first calculated in November 2010.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand rose 1.1 percent in April, the eleventh consecutive increase. In April, the index for total goods inputs to stage 1 intermediate demand climbed 1.5 percent, and prices for total services inputs moved up 0.9 percent. Advances in the indexes for steel mill products; hardware, building materials, and supplies retailing; industrial chemicals; airline passenger services; passenger car rental; and corn outweighed decreases in prices for diesel fuel; electric power; and securities brokerage, dealing, investment advice, and related services. For the 12 months ended in April, the index for stage 1 intermediate demand moved up 17.4 percent, the largest advance since 12-month data were first calculated in November 2010.