September 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 0.4 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices declined 0.2 percent in August and 0.4 percent in July. (See table A.) On an unadjusted basis, the index for final demand advanced 8.5 percent for the 12 months ended in September.

In September, two-thirds of the increase in the index for final demand can be traced to a 0.4- percent rise in prices for final demand services. The index for final demand goods also advanced 0.4 percent.

Prices for final demand less foods, energy, and trade services advanced 0.4 percent in September, the largest rise since increasing 0.5 percent in May. For the 12 months ended in September, the index for final demand less foods, energy, and trade services moved up 5.6 percent.

Final Demand

Final demand services: Prices for final demand services advanced 0.4 percent in September after climbing 0.3 percent in August. Most of the September increase is attributable to a 0.6-percent rise in the index for final demand services less trade, transportation, and warehousing. Margins for final demand trade services edged up 0.1 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Conversely, prices for final demand transportation and warehousing services fell 0.2 percent.

Product detail: Over a quarter of the September increase in the index for final demand services can be traced to a 6.4-percent advance in prices for traveler accommodation services. The indexes for food and alcohol retailing, portfolio management, machinery and vehicle wholesaling, oil and gas well drilling services, and hospital inpatient care also rose. In contrast, prices for long-distance motor carrying fell 0.4 percent. The indexes for fuels and lubricants retailing and for consumer loans (partial) also decreased. (See table 2.)

Final demand goods: Prices for final demand goods moved up 0.4 percent in September after decreasing 1.1 percent in August. Sixty percent of the advance is attributable to a 1.2-percent increase in the index for final demand foods. Prices for final demand energy rose 0.7 percent. The index for final demand goods less foods and energy was unchanged.

Product detail: A major factor in the September increase in prices for final demand goods was a 15.7-percent advance in the index for fresh and dry vegetables. Prices for diesel fuel, residential natural gas, chicken eggs, home heating oil, and pork also moved higher. Conversely, the index for gasoline fell 2.0 percent. Prices for prepared poultry and for steel mill products also declined.

Intermediate Demand by Commodity Type

Within intermediate demand in September, prices for processed goods edged up 0.1 percent, the index for unprocessed goods rose 0.3 percent, and prices for services advanced 0.3 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand rose 0.1 percent in September after decreasing 1.5 percent in August. The increase can be traced to a 2.6-percent advance in prices for processed energy goods. In contrast, the indexes for processed materials less foods and energy and for processed foods and feeds moved lower, 0.6 percent and 0.5 percent, respectively. For the 12 months ended in September, prices for processed goods for intermediate demand increased 13.1 percent.

Product detail: Leading the September rise in the index for processed goods for intermediate demand, prices for diesel fuel advanced 9.1 percent. The indexes for electric power, jet fuel, pork, and ready-mix concrete also increased. Conversely, prices for steel mill products fell 6.7 percent. The indexes for primary basic organic chemicals, liquefied petroleum gas, and prepared poultry also declined.

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand rose 0.3 percent in September following a 5.3-percent advance in August. Leading the broad-based increase in September, prices for unprocessed energy materials moved up 0.5 percent. The indexes for unprocessed nonfood materials less energy and for unprocessed foodstuffs and feedstuffs also rose, 0.6 percent and 0.1 percent, respectively. For the 12 months ended in September, prices for unprocessed goods for intermediate demand advanced 34.2 percent.

Product detail: Leading the September rise in prices for unprocessed goods for intermediate demand, the index for natural gas increased 3.1 percent. Prices for corn; hay, hayseeds, and oilseeds; wheat; fresh vegetables, except potatoes; and construction sand, gravel, and crushed stone also moved higher. In contrast, the crude petroleum index fell 3.4 percent. Prices for raw milk and for recyclable paper also declined.

Services for intermediate demand: The index for services for intermediate demand increased 0.3 percent in September, the third consecutive rise. Leading the September advance, prices for services less trade, transportation, and warehousing for intermediate demand climbed 0.5 percent. Margins for trade services for intermediate demand moved up 0.3 percent. Conversely, the index for transportation and warehousing services for intermediate demand declined 0.7 percent. For the 12 months ended in September, prices for services for intermediate demand increased 6.2 percent.

Product detail: In September, a 5.6-percent rise in the index for investment banking was a major factor in the advance in prices for services for intermediate demand. The indexes for paper and plastics products wholesaling, gross rents for retail properties, portfolio management, traveler accommodation services, and pipeline transportation of natural gas also moved higher. In contrast, prices for arrangement of freight and cargo transportation fell 12.7 percent. The indexes for metals, minerals, and ores wholesaling and for securities brokerage, dealing, investment advice, and related services also decreased.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand rose 0.3 percent in September following a 0.4-percent advance in August. In September, the index for total services inputs to stage 4 intermediate demand moved up 0.5 percent. Prices for total goods inputs were unchanged. (See table D.) Increases in the indexes for paper and plastics products wholesaling, corn, diesel fuel, portfolio management, gross rents for retail properties, and investment banking outweighed declines in the indexes for steel mill products; securities brokerage, dealing, investment advice, and related services; and metals, minerals, and ores wholesaling. For the 12 months ended in September, prices for stage 4 intermediate demand rose 8.4 percent.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand inched down 0.1 percent in September, the third consecutive decline. In September, the index for total goods inputs to stage 3 intermediate demand fell 0.2 percent. Prices for total services inputs were unchanged. Decreases in the indexes for steel mill products; raw milk; arrangement of freight and cargo transportation; slaughter hogs; and metals, minerals, and ores wholesaling outweighed increases in the indexes for diesel fuel, corn, paper and plastics products wholesaling, and jet fuel. For the 12 months ended in September, prices for stage 3 intermediate demand advanced 10.8 percent.

Stage 2 intermediate demand: Prices for stage 2 intermediate demand edged down 0.1 percent in September following a 3.5-percent rise in August. In September, the index for total goods inputs to stage 2 intermediate demand declined 0.1 percent. Prices for total services inputs were unchanged. Decreases in the indexes for crude petroleum, arrangement of freight and cargo transportation, liquefied petroleum gas, fuels and lubricants retailing, and steel mill products outweighed increasing prices for natural gas, oilseeds, deposit services (partial), and traveler accommodation services. For the 12 months ended in September, the index for stage 2 intermediate demand jumped 18.6 percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand rose 0.5 percent in September after falling 0.5 percent in August. In September, the index for total goods inputs to stage 1 intermediate demand advanced 0.6 percent, and prices for total services inputs moved up 0.4 percent. Increases in the indexes for diesel fuel, corn, traveler accommodation services, investment banking, paper and plastics products wholesaling, and gross rents for retail properties outweighed declines in the indexes for steel mill products; metals, minerals, and ores wholesaling; and securities brokerage, dealing, investment advice, and related services. For the 12 months ended in September, prices for stage 1 intermediate demand rose 10.8 percent.

PPI Weights to be Updated to Reflect 2017 Census Shipment Values

With the release of January 2023 Producer Price Index (PPI) data in February 2023, the Bureau of Labor Statistics will update PPI value weights to more accurately reflect recent production and marketing patterns. The updated weights will be constructed using 2017 value of shipments data from the Census of Manufactures, the Census of Mining, the Census of Services, and the Census of Agriculture. These data were collected in accordance with the North American Product Classification System (NAPCS). From January 2018 through December 2022, PPI weights have been based on 2012 North American Industry Classification System (NAICS) shipment values.

All PPIs will be affected by this weight update, including all industry net output indexes, as well as indexes for traditional commodity groupings. In addition, weights will be updated from the 2012 to the 2017 Economic Census for all Final Demand-Intermediate Demand (FD-ID) indexes, special commodity-grouping indexes, and inputs to industry indexes. This weight revision will not result in changes to the reference base for indexes, the dates when PPIs are set to 100.

It is important to note that the basic structures of the PPI commodity and FD-ID classification systems will not change as a result of the weight revision. However, PPIs classified according to the NAICS will be updated to reflect 2022 NAICS definitions established by the U.S. Census Bureau. The weight update also will result in shifting relative importance values. These shifts will impact aggregate indexes in a manner commensurate with the relative gains and losses in value weights from 2012 to 2017.

In addition, PPI sample updates normally occurring with the release of October 2022 and February 2023 data will be combined and released in conjunction with the release of January 2023 PPI data in February 2023.

Commodity and FD-ID relative importance figures for December 2022 will be released two business days prior to the release of January 2023 PPI data. This information will be available on the PPI website at www.bls.gov/ppi/tables/. Following the January 2023 PPI data release, a concordance between Census product codes and PPI commodity codes will be available upon request by contacting the PPI Section of Index Analysis and Public Information at ppi- info@bls.gov or (202) 691-7705.