January 2023 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 0.7 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices declined 0.2 percent in December 2022 and advanced 0.3 percent in November. (See table A.) On an unadjusted basis, the index for final demand rose 6.0 percent for the 12 months ended January 2023.

In January, a 1.2-percent rise in prices for final demand goods led the advance in the final demand index. Prices for final demand services also moved higher, increasing 0.4 percent.

The index for final demand less foods, energy, and trade services rose 0.6 percent in January 2023, the largest advance since moving up 0.9 percent in March 2022. For the 12 months ended in January 2023, prices for final demand less foods, energy, and trade services increased 4.5 percent.

Final Demand

Final demand goods: The index for final demand goods moved up 1.2 percent in January, the largest increase since rising 2.1 percent in June 2022. Most of the January advance is attributable to a 5.0-percent jump in prices for final demand energy. The index for final demand goods less foods and energy increased 0.6 percent. In contrast, prices for final demand foods fell 1.0 percent.

Product detail: Nearly one-third of the January rise in the index for final demand goods can be traced to prices for gasoline, which increased 6.2 percent. The indexes for residential natural gas, diesel fuel, jet fuel, soft drinks, and motor vehicles also moved higher. Conversely, prices for fresh and dry vegetables decreased 33.5 percent. The indexes for residual fuels and for basic organic chemicals also declined. (See table 2.)

Final demand services: The index for final demand services advanced 0.4 percent in January, the same as in December. Over 80 percent of the broad-based increase in January is attributable to prices for final demand services less trade, transportation, and warehousing, which rose 0.6 percent. Margins for final demand trade services moved up 0.2 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services also advanced 0.2 percent.

Product detail: A major factor in the January rise in prices for final demand services was the index for hospital outpatient care, which jumped 1.4 percent. The indexes for automobiles and automobile parts retailing; health, beauty, and optical goods retailing; portfolio management; chemicals and allied products wholesaling; and airline passenger services also moved higher. In contrast, margins for fuels and lubricants retailing fell 17.5 percent. Prices for long-distance motor carrying and for securities brokerage, dealing, and investment advice also declined.

Intermediate Demand by Commodity Type

Within intermediate demand in January, the index for processed goods advanced 1.0 percent, prices for unprocessed goods fell 5.0 percent, and the index for services increased 0.5 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand moved up 1.0 percent in January, the first advance since increasing 1.9 percent in June 2022. Leading the January rise, prices for processed energy goods jumped 5.4 percent. The index for processed foods and feeds advanced 0.3 percent. Conversely, prices for processed materials less foods and energy decreased 0.2 percent. For the 12 months ended in January, the index for processed goods for intermediate demand rose 3.8 percent.

Product detail: Over half of the January increase in prices for processed goods for intermediate demand can be attributed to the index for diesel fuel, which rose 10.9 percent. Prices for electric power, utility natural gas, gasoline, beef and veal, and nonferrous mill shapes also advanced. In contrast, the index for basic organic chemicals declined 2.2 percent. Prices for residual fuels and for animal and marine feed and fertilizer byproducts also decreased.

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand fell 5.0 percent in January following a 1.5-percent rise in December. An 8.5-percent decline in prices for unprocessed energy materials accounted for 70 percent of the January decrease. The index for unprocessed foodstuffs and feedstuffs moved down 4.7 percent. Conversely, prices for unprocessed nonfood materials less energy increased 0.9 percent. For the 12 months ended in January, the index for unprocessed goods for intermediate demand rose 2.3 percent.

Product detail: Over 60 percent of the January decline in prices for unprocessed goods for intermediate demand can be attributed to the index for natural gas, which dropped 19.1 percent. Prices for ungraded chicken eggs, crude petroleum, slaughter chickens, slaughter hogs, and recyclable paper also decreased. In contrast, the index for nonferrous metal ores rose 4.5 percent. Prices for raw milk and for coal also advanced.

Services for intermediate demand: The index for services for intermediate demand moved up 0.5 percent in January after no change in December. Leading the advance, prices for services less trade, transportation, and warehousing for intermediate demand rose 0.8 percent. The index for transportation and warehousing services for intermediate demand moved up 0.4 percent. Conversely, margins for trade services for intermediate demand declined 0.6 percent. For the 12 months ended in January, the index for services for intermediate demand increased 5.9 percent.

Product detail: Over three-quarters of the January advance in the index for services for intermediate demand can be attributed to a 6.6-percent rise in prices for loan services (partial). The indexes for services related to securities brokerage and dealing (partial), chemicals and allied products wholesaling, legal services, portfolio management, and U.S. postal services also moved higher. In contrast, margins for fuels and lubricants retailing dropped 17.5 percent. The indexes for securities brokerage, dealing, and investment advice and for arrangement of freight and cargo transportation also declined.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand moved up 0.6 percent in January, the largest increase since advancing 0.9 percent in May 2022. In January, the index for total services inputs to stage 4 intermediate demand rose 0.7 percent, and prices for total goods inputs climbed 0.6 percent. (See table D.) Increases in the indexes for loan services (partial), electric power, services related to securities brokerage and dealing (partial), portfolio management, diesel fuel, and chemicals and allied products wholesaling outweighed declines in the indexes for securities brokerage, dealing, and investment advice; food wholesaling; and plastic packaging products. For the 12 months ended in January, prices for stage 4 intermediate demand moved up 5.1 percent.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand increased 0.2 percent in January, the first advance since moving up 0.5 percent in June 2022. In January, the index for total services inputs to stage 3 intermediate demand rose 0.4 percent, while prices for total goods inputs were unchanged. Increases in the indexes for loan services (partial), diesel fuel, jet fuel, raw milk, U.S. postal services, and asphalt outweighed decreases in prices for ungraded chicken eggs, slaughter chickens, and arrangement of freight and cargo transportation. For the 12 months ended in January, the index for stage 3 intermediate demand advanced 3.8 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand declined 1.5 percent in January after increasing 1.2 percent in December. In January, prices for total goods inputs to stage 2 intermediate demand fell 4.0 percent. Conversely, the index for total services inputs moved up 0.6 percent. Decreases in the indexes for natural gas, crude petroleum, fuels and lubricants retailing, oilseeds, arrangement of freight and cargo transportation, and basic organic chemicals outweighed advances in prices for loan services (partial), legal services, and coal. For the 12 months ended in January, prices for stage 2 intermediate demand increased 5.0 percent.

Stage 1 intermediate demand: The index for stage 1 intermediate demand rose 0.5 percent in January, the largest increase since advancing 1.0 percent in June 2022. In January, prices for total goods inputs to stage 1 intermediate demand moved up 0.8 percent, and prices for total services inputs climbed 0.2 percent. Increases in the indexes for diesel fuel, services related to securities brokerage and dealing (partial), utility natural gas, electric power, chemicals and allied products wholesaling, and gasoline outweighed declines in the indexes for basic organic chemicals; securities brokerage, dealing, and investment advice; and fuels and lubricants retailing. For the 12 months ended in January, prices for stage 1 intermediate demand moved up 4.8 percent.

Resampling of Industries - January 2023

Effective with the release of data for January 2023, the Producer Price Index (PPI) includes data for 25 resampled industries classified according to the 2022 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 January 2023, see the current issue of the PPI Detailed Report online at www.bls.gov/ppi/detailed-report/ppi-detailed- report-january-2023.pdf, or contact the PPI Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-7705.

NAICS Code Industry 212110 Coal mining 311520 Ice cream and frozen dessert manufacturing 311710 Seafood product preparation and packaging 311811 Retail bakeries 312130 Wineries 316110 Leather and hide tanning and finishing 322120 Paper mills 325220 Artificial fibers and filaments manufacturing 327215 Glass product manufacturing, made of purchased glass 327991 Cut stone and stone product manufacturing 331420 Copper rolling, drawing, extruding, and alloying 331492 Secondary smelting, refining, and alloying of nonferrous metal (except copper and aluminum) 332992 Small arms ammunition manufacturing 333241 Food product machinery manufacturing 333612 Speed changer, drive, and gear manufacturing 334118 Computer terminal and other computer peripheral equipment manufacturing 334210 Telephone apparatus manufacturing 334514 Totalizing fluid meters and counting devices manufacturing 337122 Nonupholstered wood household furniture manufacturing 337920 Blind and shade manufacturing 339113 Surgical appliance and supplies manufacturing 339114 Dental equipment and supplies manufacturing 424500 Farm product raw material merchant wholesalers 424900 Miscellaneous nondurable goods merchant wholesalers 541610 Management consulting services

Recalculation of Seasonal Adjustment Factors

Effective with this release, seasonal adjustment factors have been recalculated to reflect price-movement patterns during 2022 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 2018 through December 2022.

Revised seasonally adjusted data for this period, as well as seasonal adjustment factors for directly adjusted commodity indexes to be used through December 2023, were released February 14, 2023. 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 2022, based on former and recalculated seasonal factors. These percent changes include final price data through August 2022 and may differ from values shown in tables A through D of this release, which include final price data through September 2022 and revised interim data for October through December.

PPI Weights 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 updated PPI value weights to more accurately reflect recent production and marketing patterns. The updated weights are 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 were based on 2012 North American Industry Classification System (NAICS) shipment values.

All PPIs were affected by this weight update, including all industry net output indexes, as well as indexes for traditional commodity groupings. In addition, weights were 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 did 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 did not change as a result of the weight revision. However, PPIs classified according to the NAICS were updated to reflect 2022 NAICS definitions established by the U.S. Census Bureau. The weight update also resulted in shifting relative importance values. These shifts impacted 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 were 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 were released on February 14, 2023, two business days prior to the release of January 2023 PPI data. This information is available on the PPI website at www.bls.gov/ppi/tables/. A concordance between Census product codes and PPI commodity codes is available upon request by contacting the PPI Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-7705.