June 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 1.1 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This rise followed advances of 0.9 percent in May and 0.4 percent in April. (See table A.) On an unadjusted basis, final demand prices moved up 11.3 percent for the 12 months ended in June, the largest increase since a record 11.6-percent jump in March 2022.

In June, three-fourths of the advance in the index for final demand was due to a 2.4-percent rise in prices for final demand goods. The index for final demand services increased 0.4 percent.

Prices for final demand less foods, energy, and trade services moved up 0.3 percent in June after advancing 0.4 percent in both May and April. For the 12 months ended in June, the index for final demand less foods, energy, and trade services rose 6.4 percent.

Final Demand

Final demand goods: The index for final demand goods moved up 2.4 percent in June, the sixth consecutive rise. Nearly 90 percent of the June increase can be traced to a 10.0-percent jump in prices for final demand energy. The indexes for final demand goods less foods and energy and for final demand foods advanced 0.5 percent and 0.1 percent, respectively.

Product detail: Over half of the June increase in the index for final demand goods is attributable to gasoline prices, which jumped 18.5 percent. The indexes for diesel fuel, electric power, residential natural gas, motor vehicles and equipment, and processed young chickens also moved higher. In contrast, prices for chicken eggs dropped 30.2 percent. The indexes for iron and steel scrap and for jet fuel also decreased. (See table 2.)

Final demand services: The index for final demand services rose 0.4 percent in June after climbing 0.6 percent in May. Two-thirds of the broad-based advance in June can be traced to a 0.8-percent increase in margins for final demand trade services. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand services less trade, transportation, and warehousing and for final demand transportation and warehousing services also moved higher, 0.1 percent and 0.8 percent, respectively.

Product detail: Over 30 percent of the June advance in the index for final demand services can be traced to margins for food and alcohol retailing, which rose 3.8 percent. The indexes for machinery and equipment wholesaling, outpatient care (partial), transportation of passengers (partial), guestroom rental, and hospital inpatient care also increased. Conversely, prices for portfolio management declined 2.7 percent. The indexes for automobile retailing (partial) and for long- distance motor carrying also moved lower.

Intermediate Demand by Commodity Type

Within intermediate demand in June, prices for processed goods advanced 2.3 percent, the index for unprocessed goods increased 9.5 percent, and prices for services were unchanged. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand moved up 2.3 percent in June, the sixth consecutive advance. Most of the broad-based increase in June can be traced to a 9.9-percent rise in prices for processed energy goods. The indexes for processed materials less foods and energy and for processed foods and feeds also moved higher, both advancing 0.2 percent in June. For the 12 months ended in June, prices for processed goods for intermediate demand jumped 22.2 percent.

Product detail: Forty percent of the June increase in the index for processed goods for intermediate demand can be attributed to a 13.9-percent rise in prices for diesel fuel. The indexes for gasoline, utility natural gas, commercial electric power, lubricating oil base stocks, and plastic resins and materials also advanced. In contrast, prices for softwood lumber dropped 22.6 percent. The indexes for jet fuel and for fresh sausage also moved lower.

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand climbed 9.5 percent in June, the sixth consecutive advance. Leading the June increase, prices for unprocessed energy materials rose 20.4 percent. The index for unprocessed foodstuffs and feedstuffs advanced 0.2 percent. Conversely, prices for unprocessed nonfood materials less energy fell 2.2 percent. For the 12 months ended in June, the index for unprocessed goods for intermediate demand surged 58.0 percent, the largest increase since a 59.2-percent jump for the 12 months ended April 2021.

Product detail: Nearly 60 percent of the June increase in prices for unprocessed goods for intermediate demand can be traced to the index for natural gas, which jumped 24.3 percent. Prices for crude petroleum; corn; slaughter cattle; oilseeds; and construction sand, gravel, and crushed stone also rose. In contrast, the index for iron and steel scrap fell 10.4 percent. Prices for ungraded chicken eggs and for nonferrous scrap also decreased.

Services for intermediate demand: The index for services for intermediate demand was unchanged in June, following seven consecutive advances. In June, a 0.2-percent increase in margins for trade services for intermediate demand offset decreases in the indexes for services less trade, transportation, and warehousing for intermediate demand and for transportation and warehousing services for intermediate demand, which fell 0.1 and 0.2 percent respectively. For the 12 months ended in June, prices for services for intermediate demand rose 6.3 percent.

Product detail: Within the index for services for intermediate demand in June, margins for machinery and equipment parts and supplies wholesaling moved up 2.1 percent. Prices for loan services (partial); transportation of passengers (partial); gross rents for retail properties; and warehousing, storage, and related services also increased. In contrast, the index for securities brokerage, dealing, investment advice, and related services fell 4.4 percent. The indexes for portfolio management; television advertising time sales; arrangement of freight and cargo transportation; and metals, minerals, and ores wholesaling also declined.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand moved up 0.6 percent in June following a 0.8-percent increase in May. In June, prices for total goods inputs to stage 4 intermediate demand advanced 1.3 percent, while the index for total services inputs was unchanged. (See table D.) Increases in the indexes for gasoline, machinery and equipment parts and supplies wholesaling, commercial electric power, diesel fuel, utility natural gas, and loan services (partial) outweighed declining prices for securities brokerage, dealing, investment advice, and related services; portfolio management; and softwood lumber. For the 12 months ended in June, the index for stage 4 intermediate demand rose 10.8 percent.

Stage 3 intermediate demand: The index for stage 3 intermediate demand advanced 0.9 percent in June after moving up 1.6 percent in May. In June, prices for total goods inputs to stage 3 intermediate demand rose 1.9 percent. Conversely, the index for total services inputs fell 0.3 percent. Increasing prices for diesel fuel, gasoline, slaughter cattle, corn, raw milk, and loan services (partial) outweighed decreasing indexes for television advertising time sales, ungraded chicken eggs, and cold rolled steel sheet and strip. For the 12 months ended in June, prices for stage 3 intermediate demand advanced 18.1 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand rose 5.4 percent in June, the largest increase since moving up 5.5 percent in February 2021. In June, prices for total goods inputs to stage 2 intermediate demand jumped 9.9 percent, and the index for total services inputs increased 0.3 percent. Advances in the indexes for gas fuels, crude petroleum, loan services (partial), oilseeds, coal, and machinery and equipment parts and supplies wholesaling outweighed declines in prices for iron and steel scrap, arrangement of freight and cargo transportation, and softwood lumber. For the 12 months ended in June, the index for stage 2 intermediate demand jumped 29.4 percent, the largest increase since 12-month data were first calculated in November 2010.

Stage 1 intermediate demand: The index for stage 1 intermediate demand advanced 1.4 percent in June after increasing 1.3 percent in May. In June, prices for total goods inputs to stage 1 intermediate demand rose 2.8 percent. In contrast, the index for total services inputs fell 0.3 percent. Higher prices for diesel fuel, utility natural gas, gasoline, commercial electric power, guestroom rental, and transportation of passengers (partial) outweighed declines in the indexes for securities brokerage, dealing, investment advice, and related services; iron and steel scrap, and cold rolled steel sheet and strip. For the 12 months ended in June, prices for stage 1 intermediate demand jumped 15.8 percent.

Resampling of Industries - June 2022

Effective with the release of data for June 2022, the Producer Price Index (PPI) includes data for 9 resampled industries and 1 newly introduced industry 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 2022, see the current issue of the PPI Detailed Report online at www.bls.gov/ppi/detailed-report/ppi-detailed-report- june-2022.pdf, or contact the PPI Section of Index Analysis and Public Information at ppi- info@bls.gov or (202) 691-7705.

NAICS Code Industry 236224 New health care building construction 311351 Chocolate and confectionery manufacturing from cacao 313110 Fiber, yarn, and thread mills 321219 Reconstituted wood product manufacturing 325413 In-vitro diagnostic substance manufacturing 327110 Pottery, ceramics, and plumbing fixture manufacturing 334412 Bare printed circuit board manufacturing 486210 Pipeline transportation of natural gas* 511210 Software publishers 517311 Wired telecommunications carriers

* For further discussion of this newly introduced PPI, see the June 2022 issue of the PPI Detailed Report.

PPI Introduces Detailed Indexes for Defense and Non-defense Government Purchases

Effective with the release of Producer Price Index (PPI) data for June 2022, the Bureau of Labor Statistics introduced two PPI special grouping indexes to the Final Demand portion of the Final Demand-Intermediate Demand (FD-ID) aggregation system. Under the Government Purchases section of Final demand, PPI is introducing sub-indexes that reflect changes in prices for defense-related and non-defense-related government purchases. Historical data for the new indexes will go back to 2015. The official index codes and titles for the new indexes are provided below.

* FD49405 - Government purchases, defense * FD49406 - Government purchases, non-defense

These indexes, constructed at the request of the U.S. Department of Defense, are calculated using weight data from the Bureau of Economic Analysis (BEA) Input/Output (I/O) Accounts. The BEA I/O data provide detailed commodity use information for the Government purchases sector. Allocations based on the detailed I/O data are being applied to the weights of the existing PPI Government purchases index to calculate detailed weights for the new sub-indexes.

Data for the two new indexes appear under the Special Groupings heading of the Final Demand section of tables 1 and 3 of this release, and in tables 1, 3, 4, and 5 of the PPI Detailed Report.