September 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 September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.7 percent in August and 1.0 percent in July. (See table A.) On an unadjusted basis, the final demand index rose 8.6 percent for the 12 months ended in September, the largest advance since 12-month data were first calculated in November 2010.

Nearly 80 percent of the September increase in the index for final demand can be traced to a 1.3- percent rise 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 moved up 0.1 percent in September after increasing 0.3 percent in August. For the 12 months ended in September, the index for final demand less foods, energy, and trade services rose 5.9 percent.

Final Demand

Final demand goods: The index for final demand goods moved up 1.3 percent in September, the largest increase since a 1.5-percent rise in May. In September, 40 percent of the broad-based advance can be attributed to a 2.8-percent jump in prices for final demand energy. The indexes for final demand goods less foods and energy and for final demand foods also moved up, 0.6 percent and 2.0 percent, respectively.

Product detail: Leading the advance in the index for final demand goods, prices for gasoline rose 3.9 percent. The indexes for beef and veal, residential electric power, fresh and dry vegetables, gas fuels, and primary basic organic chemicals also moved higher. In contrast, prices for plastic resins and materials decreased 3.9 percent. The indexes for corn and for residual fuels also fell. (See table 4.)

Final demand services: Prices for final demand services moved up 0.2 percent in September, the ninth consecutive advance. Leading the increase in September, the index for final demand trade services rose 0.9 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand services less trade, transportation, and warehousing advanced 0.2 percent. Conversely, the index for final demand transportation and warehousing services fell 4.0 percent.

Product detail: Over two-thirds of the September increase in prices for final demand services can be traced to margins for fuels and lubricants retailing, which rose 11.6 percent. The indexes for machinery and equipment wholesaling, hospital inpatient care, automobiles and automobile parts retailing, portfolio management, and truck transportation of freight also moved up. In contrast, prices for airline passenger services fell 16.9 percent. The indexes for health, beauty, and optical goods retailing and for bundled wired telecommunications access services also declined.

Intermediate Demand by Commodity Type

Within intermediate demand in September, prices for processed goods moved up 1.3 percent, the index for unprocessed goods increased 2.4 percent, and prices for services rose 0.5 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand advanced 1.3 percent in September after climbing 1.0 percent in August. Sixty percent of the broad-based September increase can be traced to prices for processed materials less foods and energy, which moved up 1.1 percent. The indexes for processed energy goods and for processed foods and feeds rose 2.0 percent and 1.9 percent, respectively. For the 12 months ended in September, prices for processed goods for intermediate demand advanced 23.9 percent, the largest 12-month increase since jumping 26.3 percent in January 1975.

Product detail: One-fifth of the September increase in the index for processed goods for intermediate demand can be attributed to a 9.8-percent rise in prices for primary basic organic chemicals. The indexes for hot rolled steel sheet and strip, diesel fuel, fabricated structural metal products, gasoline, and beef and veal also moved higher. Conversely, prices for softwood veneer and plywood dropped 44.9 percent. The indexes for residual fuels and for pork also decreased. (See table 5.)

Unprocessed goods for intermediate demand: Prices for unprocessed goods for intermediate demand moved up 2.4 percent in September, the largest advance since rising 2.7 percent in June. Leading the September increase, the index for unprocessed energy materials climbed 8.5 percent. Prices for unprocessed foodstuffs and feedstuffs edged up 0.1 percent. In contrast, the index for unprocessed nonfood materials less energy declined 3.5 percent. For the 12 months ended in September, prices for unprocessed goods for intermediate demand jumped 45.9 percent.

Product detail: A major factor in the September increase in prices for unprocessed goods for intermediate demand was the index for natural gas, which advanced 14.4 percent. Prices for crude petroleum, slaughter poultry, slaughter barrows and gilts, slaughter steers and heifers, and aluminum base scrap also rose. Conversely, the index for carbon steel scrap fell 4.1 percent. Prices for corn and for raw milk also decreased.

Services for intermediate demand: The index for services for intermediate demand rose 0.5 percent in September, the tenth consecutive advance. In September, 40 percent of the broad-based increase can be traced to prices for services less trade, transportation, and warehousing for intermediate demand, which moved up 0.2 percent. Margins for trade services for intermediate demand and the index for transportation and warehousing services for intermediate demand also advanced, 0.6 percent and 0.8 percent, respectively. For the 12 months ended in September, prices for services for intermediate demand rose 8.0 percent.

Product detail: A 4.9-percent increase in the index for business loans (partial) was a major factor in the September rise in prices for services for intermediate demand. The indexes for arrangement of freight and cargo transportation; machinery and equipment parts and supplies wholesaling; courier, messenger, and U.S. postal services; food wholesaling; and building materials, paint, and hardware wholesaling also moved higher. In contrast, prices for airline passenger services fell 16.9 percent. The indexes for metals, minerals, and ores wholesaling and for internet advertising sales (excluding print publishers) also declined.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand rose 0.4 percent in September following a 0.8-percent increase in August. In September, the index for total goods inputs to stage 4 intermediate demand climbed 0.5 percent, and prices for total services inputs moved up 0.4 percent. (See table D.) Advances in the indexes for fabricated structural metal products; machinery and equipment parts and supplies wholesaling; courier, messenger, and U.S. postal services; hot rolled steel sheet and strip; beef and veal; and portfolio management outweighed declines in the indexes for airline passenger services; corn; and metals, minerals, and ores wholesaling. (See table 6.) For the 12 months ended in September, prices for stage 4 intermediate demand rose 11.6 percent.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand advanced 1.0 percent in September, the same as in August. In September, the index for total goods inputs to stage 3 intermediate demand rose 1.2 percent, and prices for total services inputs moved up 0.8 percent. Increases in the indexes for primary basic organic chemicals; slaughter poultry; hot rolled steel sheet and strip; arrangement of freight and cargo transportation; courier, messenger, and U.S. postal services; and slaughter barrows and gilts outweighed decreases in the indexes for corn; raw milk; and metals, minerals, and ores wholesaling. For the 12 months ended in September, prices for stage 3 intermediate demand advanced 20.2 percent.

Stage 2 intermediate demand: Prices for stage 2 intermediate demand rose 2.5 percent in September, the sixth consecutive increase. In September, the index for total goods inputs to stage 2 intermediate demand jumped 4.0 percent, and prices for total services inputs climbed 1.1 percent. Advances in the indexes for gas fuels, crude petroleum, arrangement of freight and cargo transportation, business loans (partial), primary basic organic chemicals, and fuels and lubricants retailing outweighed falling prices for airline passenger services, carbon steel scrap, and oilseeds. For the 12 months ended in September, the index for stage 2 intermediate demand increased 22.7 percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand moved up 0.2 percent in September following a 0.9-percent increase in August. In September, the index for total goods inputs to stage 1 intermediate demand rose 0.9 percent. Conversely, prices for total services inputs fell 0.5 percent. Advances in the indexes for primary basic organic chemicals; hot rolled steel sheet and strip; diesel fuel; fabricated structural metal products; building materials, paint, and hardware wholesaling; and courier, messenger, and U.S. postal services outweighed declines in the indexes for airline passenger services; corn; and hardware, building materials, and supplies retailing. For the 12 months ended in September, prices for stage 1 intermediate demand increased 19.9 percent.

PPI to Publish Interim Index Values and Publish All Indexes to 3 Decimal Places

Effective with the release of November 2021 Producer Price Index (PPI) data, on December 14, 2021, the Bureau of Labor Statistics will publish interim index values for all preliminary PPI data, starting with values for August through October 2021. Within PPI, interim indexes are defined as recalculated indexes for the 3 months between the initial publication and final revision of PPI data. With this modification, data within the 3-month interim revision period will be updated and published on a monthly basis. This replaces the current policy of only publishing revised data once, when the data have been finalized 4 months after original publication. PPI data will continue to be finalized 4 months after initial publication.

The publication of interim index values will allow for greater transparency regarding PPI revisions, and will align PPI official index publication with Bureau of Economic Analysis use of PPI interim index data as an input to Gross Domestic Product calculations.

In addition, effective with the November 2021 data release in December 2021, the PPI will begin publishing index values to 3 decimal places of precision, starting with finalized data for July 2021. The publication of index levels to 3 decimal places will allow data users greater precision in percent change calculations. Published PPI percent change calculations will continue to be rounded to one decimal place. The change to 3 decimal precision for indexes will apply to all PPI data: Industry, Commodity, FD-ID, and Input indexes.

This change to the level of published precision will impact only the presentation of index numbers. Index values will continue to be calculated from underlying price information in the same manner as in the past, and no systematic upward or downward effect on the data will be introduced. With the implementation of this change, official PPI data prior to July 2021 will not be revised to reflect greater precision.

As a result of the publication of interim index values and index data to 3 decimal places of precision, effective with the publication of November 2021 PPI data in December 2021, PPI will introduce redesigned publication tables for both the PPI News Release and the PPI Detailed Report. For further information on these publication table changes see: www.bls.gov/ppi/notices/2021/ppi-to-publish-interim-index-values-to-3-decimal-places.htm, or contact the PPI Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-7705.