October 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 0.2 percent in October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.2 percent in September and were unchanged in August. (See table A.) On an unadjusted basis, the index for final demand advanced 8.0 percent for the 12 months ended in October.

In October, the rise in the index for final demand can be attributed to a 0.6-percent advance in prices for final demand goods. In contrast, the index for final demand services decreased 0.1 percent.

Prices for final demand less foods, energy, and trade services advanced 0.2 percent in October following a 0.3-percent rise in September. For the 12 months ended in October, the index for final demand less foods, energy, and trade services increased 5.4 percent.

Final Demand

Final demand goods: The index for final demand goods moved up 0.6 percent in October, the largest advance since a 2.2-percent rise in June. Most of the October increase can be traced to a 2.7- percent jump in prices for final demand energy. The index for final demand foods advanced 0.5 percent. Conversely, prices for final demand goods less foods and energy decreased 0.1 percent.

Product detail: In October, 60 percent of the increase in prices for final demand goods is attributable to the index for gasoline, which rose 5.7 percent. Prices for diesel fuel, fresh and dry vegetables, residential electric power, chicken eggs, and oil field and gas field machinery also advanced. In contrast, the index for passenger cars declined 1.5 percent. (In accordance with usual practice, most new-model-year passenger cars and light motor trucks were introduced into the PPI in October. See Report on Quality Changes for 2023 Model Vehicles at www.bls.gov/web/ppi/ppimotveh.htm.) Prices for gas fuels and for processed young chickens also fell. (See table 2.)

Final demand services: The index for final demand services fell 0.1 percent in October, the first decline since moving down 0.2 percent in November 2020. Leading the October decrease, margins for final demand trade services fell 0.5 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services moved down 0.2 percent. Conversely, the index for final demand services less trade, transportation, and warehousing increased 0.2 percent.

Product detail: A major factor in the October decrease in prices for final demand services was the index for fuels and lubricants retailing, which fell 7.7 percent. The indexes for portfolio management, long-distance motor carrying, automobile retailing (partial), and professional and commercial equipment wholesaling also moved lower. In contrast, prices for hospital inpatient care increased 0.8 percent. The indexes for services related to securities brokerage and dealing (partial), apparel wholesaling, and airline passenger services also rose.

Intermediate Demand by Commodity Type

Within intermediate demand in October, prices for processed goods fell 0.2 percent, the index for unprocessed goods declined 11.7 percent, and prices for services rose 0.3 percent. (See tables B and C.)

Processed goods for intermediate demand: Prices for processed goods for intermediate demand moved down 0.2 percent in October after no change in September. Leading the decrease, the index for processed materials less foods and energy fell 0.8 percent. Prices for processed foods and feeds declined 0.5 percent. Conversely, the index for processed energy goods advanced 1.7 percent. For the 12 months ended in October, prices for processed goods for intermediate demand rose 10.1 percent.

Product detail: A major factor in the October decrease in prices for processed goods for intermediate demand was the index for cold rolled steel sheet and strip, which dropped 16.5 percent. Prices for utility natural gas, primary basic organic chemicals, plastic resins and materials, liquefied petroleum gas, and processed young chickens also fell. In contrast, the index for diesel fuel advanced 9.5 percent. Prices for agricultural chemicals and chemical products and for flour and flour-base mixes and doughs also moved higher.

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand fell 11.7 percent in October, the largest decrease since moving down 14.4 percent in April 2020. The broad-based October decline was led by prices for unprocessed energy materials, which dropped 19.8 percent. The indexes for unprocessed nonfood materials less energy and for unprocessed foodstuffs and feedstuffs also moved lower, 5.3 percent and 3.1 percent, respectively. For the 12 months ended in October, prices for unprocessed goods for intermediate demand rose 9.7 percent.

Product detail: A major factor in the October decrease in prices for unprocessed goods for intermediate demand was the index for natural gas, which dropped 37.8 percent. Prices for corn, raw milk, slaughter barrows and gilts, oilseeds, and recyclable paper also moved lower. Conversely, the index for crude petroleum increased 2.0 percent. Prices for ungraded chicken eggs and for coal also rose.

Services for intermediate demand: The index for services for intermediate demand increased 0.3 percent in October, the fourth consecutive rise. Leading the October advance, prices for services less trade, transportation, and warehousing for intermediate demand climbed 0.5 percent. The index for transportation and warehousing services for intermediate demand moved up 0.6 percent. In contrast, margins for trade services for intermediate demand fell 0.3 percent. For the 12 months ended in October, the index for services for intermediate demand increased 6.5 percent, the largest advance since rising 7.9 percent in May.

Product detail: Over half of the October rise in the index for services for intermediate demand can be attributed to a 6.0-percent increase in prices for business loans (partial). The indexes for services related to securities brokerage and dealing (partial); arrangement of freight and cargo transportation; television advertising time sales; building materials, paint, and hardware wholesaling; and metals, minerals, and ores wholesaling also advanced. Conversely, margins for machinery and equipment parts and supplies wholesaling fell 0.9 percent. Prices for gross rents for retail properties and for long-distance motor carrying also decreased.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand was unchanged in October following a 0.3-percent increase in September. In October, prices for total services inputs to stage 4 intermediate demand rose 0.1 percent. In contrast, prices for total goods inputs moved down 0.2 percent. (See table D.) Increases in the indexes for services related to securities brokerage and dealing (partial); diesel fuel; business loans (partial); gasoline; and building materials, paint, and hardware wholesaling offset declines in the indexes for corn, machinery and equipment parts and supplies wholesaling, portfolio management, gross rents for retail properties, and cold rolled steel sheet and strip. For the 12 months ended in October, prices for stage 4 intermediate demand advanced 7.7 percent.

Stage 3 intermediate demand: The index for stage 3 intermediate demand declined 0.5 percent in October following no change in the previous month. In October, prices for total goods inputs to stage 3 intermediate demand moved down 1.5 percent. Conversely, the index for total services inputs increased 0.5 percent. Decreases in prices for raw milk, corn, slaughter barrows and gilts, cold rolled steel sheet and strip, primary basic organic chemicals, and slaughter chickens outweighed advances in the indexes for arrangement of freight and cargo transportation, diesel fuel, and ungraded chicken eggs. For the 12 months ended in October, prices for stage 3 intermediate demand rose 9.1 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand declined 5.3 percent in October after falling 0.6 percent in September. In October, prices for total goods inputs to stage 2 intermediate demand dropped 10.9 percent. In contrast, the index for total services inputs advanced 0.8 percent. Decreases in the indexes for gas fuels, oilseeds, primary basic organic chemicals, fuels and lubricants retailing, recyclable paper, and prepared animal feeds outweighed increases in prices for business loans (partial), crude petroleum, and coal. For the 12 months ended in October, prices for stage 2 intermediate demand rose 7.3 percent.

Stage 1 intermediate demand: The index for stage 1 intermediate demand was unchanged in October following a 0.3-percent increase in September. In October, prices for total services inputs to stage 1 intermediate demand advanced 0.3 percent. Conversely, the index for total goods inputs declined 0.3 percent. Increases in the indexes for services related to securities brokerage and dealing (partial); diesel fuel; gasoline; building materials, paint, and hardware wholesaling; and traveler accommodation services offset decreases in prices for corn, primary basic organic chemicals, cold rolled steel sheet and strip, utility natural gas, and gross rents for retail properties. For the 12 months ended in October, the index for stage 1 intermediate demand rose 9.2 percent.

Recalculated Seasonal Adjustment Factors and Relative Importance Figures to be Available on February 14, 2023

Each year with the release of PPI data for January, seasonal adjustment factors and relative importance figures are recalculated to reflect price movements from the just-completed calendar year. The following information relating to the seasonal-factor update will be available on February 14, 2023 (2 workdays prior to the release of PPI data for January 2023 on February 16, 2023):

* Direct seasonal factors for PPI commodity indexes for the year 2023, * Recalculated seasonal factors for the last 5 years (2018-2022) for PPI commodity indexes, * Recalculated seasonal factors for the last 5 years (2018-2022) for PPI Final Demand- Intermediate Demand indexes, * Recalculated seasonal index data for the last 5 years (2018-2022) for Final Demand- Intermediate Demand and commodity indexes. This revision to seasonally adjusted indexes for the previous 5 years will be posted to the PPI database on the BLS website.

In addition, the following relative importance tables, which include values for December 2022, will be available on February 14, 2023:

* Final demand by individual commodities * Final demand by component series * Individual commodities of intermediate demand by commodity type * Component series of intermediate demand by commodity type * Individual commodities of intermediate demand by production flow * Component series of intermediate demand by production flow * Commodities, all levels * Wherever-provided services and construction

This information will be available on the PPI website at www.bls.gov/ppi or by contacting the PPI Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-7705.

PPI Weights to be Updated to Reflect 2017 Census Shipment Values

With the release of January 2023 Producer Price Index (PPI) data on February 16, 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.