January 2022 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 1.0 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This rise followed advances of 0.4 percent in December 2021 and 0.9 percent in November. (See table A.) On an unadjusted basis, final demand prices moved up 9.7 percent for the 12 months ended January 2022.

In January, the index for final demand services rose 0.7 percent, and prices for final demand goods moved up 1.3 percent.

Prices for final demand less foods, energy, and trade services increased 0.9 percent in January 2022, the largest increase since rising 1.0 percent in January 2021. For the 12 months ended January 2022, the index for final demand less foods, energy, and trade services moved up 6.9 percent.

Final Demand

Final demand services: Prices for final demand services advanced 0.7 percent in January, the same as in December. Three-fourths of the rise in January can be traced to a 0.9-percent increase in the index for final demand services less trade, transportation, and warehousing. Likewise, margins for final demand trade services moved up 0.6 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services were unchanged.

Product detail: A major factor in the January increase in the index for final demand services was hospital outpatient care prices, which rose 1.6 percent. The indexes for machinery and vehicle wholesaling; apparel, jewelry, footwear, and accessories retailing; traveler accommodation services; portfolio management; and truck transportation of freight also moved higher. Conversely, margins for fuels and lubricants retailing fell 9.7 percent. The indexes for transportation of passengers (partial) and for physician care also decreased. (See table 2.)

Final demand goods: Prices for final demand goods advanced 1.3 percent in January after declining 0.1 percent in December. Over 40 percent of the broad-based increase can be traced to a 0.8-percent rise in the index for final demand goods less foods and energy. Prices for final demand energy and for final demand foods also moved higher, 2.5 percent and 1.6 percent, respectively.

Product detail: Within the final demand goods category in January, the index for motor vehicles and equipment rose 0.7 percent. Prices for diesel fuel, gasoline, beef and veal, dairy products, and jet fuel also increased. In contrast, the index for iron and steel scrap decreased 10.7 percent. Prices for unprocessed finfish and for natural gas also moved lower.

Intermediate Demand by Commodity Type

Within intermediate demand in January, prices for processed goods increased 1.7 percent, the index for unprocessed goods fell 2.0 percent, and prices for services advanced 0.4 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand rose 1.7 percent in January after declining 0.1 percent in December. Over half of the broad- based increase in January can be traced to prices for processed materials less foods and energy, which advanced 1.2 percent. The indexes for processed energy goods and for processed foods and feeds climbed 3.4 percent and 2.4 percent, respectively. For the 12 months ended in January, prices for processed goods for intermediate demand jumped 24.1 percent.

Product detail: In January, a 25.4-percent increase in the index for softwood lumber was a major contributor to the rise in prices for processed goods for intermediate demand. The indexes for diesel fuel, nonferrous metals, electric power, metal containers, and dairy products also moved higher. In contrast, prices for hot rolled steel sheet and strip decreased 6.4 percent. The indexes for natural gas to electric utilities and for pork also fell.

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand declined 2.0 percent in January after falling 4.8 percent in December. Most of the January decrease is attributable to prices for unprocessed energy materials, which dropped 4.7 percent. The index for unprocessed foodstuffs and feedstuffs moved down 0.7 percent. In contrast, prices for unprocessed nonfood materials less energy edged up 0.1 percent. For the 12 months ended in January, the index for unprocessed goods for intermediate demand increased 29.7 percent.

Product detail: Leading the January decline in the index for unprocessed goods for intermediate demand, natural gas prices dropped 26.1 percent. The indexes for iron and steel scrap, raw milk, slaughter hogs, unprocessed finfish, and slaughter cattle also moved lower. Conversely, prices for nonferrous metal ores rose 6.5 percent. The indexes for crude petroleum and for hay, hayseeds, and oilseeds also increased.

Services for intermediate demand: The index for services for intermediate demand moved up 0.4 percent in January, the third consecutive increase. Most of the rise in January can be attributed to a 0.6-percent advance in prices for services less trade, transportation, and warehousing for intermediate demand. The index for transportation and warehousing services for intermediate demand moved up 0.3 percent, while margins for trade services for intermediate demand were unchanged. For the 12 months ended in January, the index for services for intermediate demand advanced 7.3 percent.

Product detail: Over a fifth of the January rise in the index for services for intermediate demand can be traced to a 2.7-percent advance in prices for architectural and engineering services. The indexes for hardware, building materials, and supplies retailing; gross rents for retail properties; portfolio management; legal services; and warehousing, storage, and related services also increased. In contrast, margins for chemicals and allied products wholesaling fell 4.1 percent. The indexes for arrangement of freight and cargo transportation and for radio advertising time sales also declined.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand rose 1.1 percent in January after moving up 0.5 percent in December. In January, prices for total goods inputs to stage 4 intermediate demand advanced 1.7 percent, and the index for total services inputs climbed 0.6 percent. (See table D.) Increases in prices for metal containers, architectural and engineering services, softwood lumber, portfolio management, gross rents for retail properties, and diesel fuel outweighed decreases in the indexes for chemicals and allied products wholesaling, hot rolled steel sheet and strip, and unprocessed finfish. For the 12 months ended in January, prices for stage 4 intermediate demand rose 12.2 percent.

Stage 3 intermediate demand: The index for stage 3 intermediate demand moved up 0.8 percent in January after rising 0.7 percent in December. In January, prices for total goods inputs to stage 3 intermediate demand increased 1.0 percent, and the index for total services inputs advanced 0.4 percent. Rising prices for diesel fuel, jet fuel, nonferrous metals, softwood lumber, architectural and engineering services, and slaughter poultry outweighed declines in the indexes for hot rolled steel sheet and strip, raw milk, and arrangement of freight and cargo transportation. For the 12 months ended in January, prices for stage 3 intermediate demand jumped 19.0 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand declined 0.5 percent in January after decreasing 2.2 percent in December. In January, prices for total goods inputs to stage 2 intermediate demand fell 1.3 percent. Conversely, the index for total services inputs advanced 0.1 percent. Decreases in the indexes for natural gas, iron and steel scrap, ethanol, fuels and lubricants retailing, arrangement of freight and cargo transportation, and radio advertising time sales outweighed increases in prices for legal services, crude petroleum, and nonferrous metals. For the 12 months ended in January, prices for stage 2 intermediate demand rose 17.9 percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand moved up 1.0 percent in January following a 0.3-percent advance in December. In January, the index for total goods inputs to stage 1 intermediate demand rose 1.3 percent, and prices for total services inputs increased 0.5 percent. Advances in the indexes for diesel fuel; hardware, building materials, and supplies retailing; traveler accommodation services; architectural and engineering services; general purpose machinery and equipment; and paints and allied products outweighed decreases in the indexes for iron and steel scrap, hot rolled steel sheet and strip, and chemicals and allied products wholesaling. For the 12 months ended in January, prices for stage 1 intermediate demand jumped 16.7 percent.

Recalculation of Seasonal Adjustment Factors

Effective with this release, seasonal adjustment factors have been recalculated to reflect price-movement patterns during 2021 for the Final Demand-Intermediate Demand (FD-ID) system and commodity- grouping indexes. This routine annual recalculation may affect previously published seasonally adjusted indexes and percent changes for January 2017 through December 2021.

Revised seasonally adjusted data for this period, as well as seasonal adjustment factors for directly adjusted commodity indexes to be used through December 2022, were released February 11, 2022. To obtain this information, contact the Producer Price Index Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-7705, or visit the Producer Price Index homepage at www.bls.gov/ppi.

Tables E and F below provide monthly seasonally adjusted percent changes for major FD-ID system indexes in 2021, based on former and recalculated seasonal factors. These percent changes include final price data through August 2021 and may differ from values shown in tables A through D of this release, which include final price data through September 2021 and revised interim data for October through December.