September 2023 Producer Price Index

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The Producer Price Index for final demand increased 0.5 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.7 percent in August and 0.6 percent in July. (See table A.) On an unadjusted basis, the index for final demand advanced 2.2 percent for the 12 months ended in September, the largest increase since moving up 2.3 percent for the 12 months ended in April.

Leading the increase in the final demand index in September, prices for final demand goods rose 0.9 percent. The index for final demand services advanced 0.3 percent.

Prices for final demand less foods, energy, and trade services increased 0.2 percent in September, the fourth consecutive advance. For the 12 months ended in September, the index for final demand less foods, energy, and trade services moved up 2.8 percent.

Final Demand

Final demand goods: The index for final demand goods moved up 0.9 percent in September, the third consecutive increase. Nearly three-quarters of the broad-based September advance is attributable to a 3.3-percent rise in prices for final demand energy. The indexes for final demand foods and for final demand goods less foods and energy moved up 0.9 percent and 0.1 percent, respectively.

Product detail: Over 40 percent of the September increase in prices for final demand goods can be traced to a 5.4-percent rise in the index for gasoline. Prices for jet fuel, processed young chickens, meats, electric power, and diesel fuel also advanced. In contrast, the index for fresh and dry vegetables declined 13.9 percent. Prices for wood pulp and for utility natural gas also fell. (See table 2.)

Final demand services: The index for final demand services advanced 0.3 percent in September following a 0.2-percent rise in August. Over 60 percent of the September increase is attributable to prices for final demand services less trade, transportation, and warehousing, which climbed 0.3 percent. The index for final demand trade services moved up 0.5 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Conversely, prices for final demand transportation and warehousing services declined 0.4 percent.

Product detail: A 13.9-percent jump in the index for deposit services (partial) was a major factor in the September rise in prices for final demand services. The indexes for machinery, equipment, parts, and supplies wholesaling; health, beauty, and optical goods retailing; traveler accommodation services; outpatient care (partial); and application software publishing also moved higher. In contrast, prices for airline passenger services fell 2.1 percent. The indexes for automobile retailing (partial) and for bundled wired telecommunications access services also decreased.

Intermediate Demand by Commodity Type

Within intermediate demand in September, prices for processed goods advanced 0.5 percent, the index for unprocessed goods rose 4.0 percent, and prices for services moved up 0.3 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand increased 0.5 percent in September after rising 2.2 percent in August. Most of the September advance is attributable to prices for processed energy goods, which jumped 2.4 percent. The index for processed foods and feeds moved up 1.1 percent, while prices for processed materials less foods and energy were unchanged. For the 12 months ended in September, the index for processed goods for intermediate demand fell 3.7 percent.

Product detail: A major factor in the September increase in prices for processed goods for intermediate demand was the index for diesel fuel, which advanced 2.5 percent. Prices for gasoline, jet fuel, liquefied petroleum gas, processed young chickens, and fatty acids also moved higher. Conversely, the index for steel mill products decreased 3.7 percent. Prices for natural gas to electric utilities and for soybean cake and meal also declined.

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand rose 4.0 percent in September, the third consecutive increase. Over 70 percent of the September advance can be traced to a 7.5-percent jump in prices for unprocessed energy materials. The index for unprocessed foodstuffs and feedstuffs moved up 3.5 percent. In contrast, prices for unprocessed nonfood materials less energy fell 0.8 percent. For the 12 months ended in September, the index for unprocessed goods for intermediate demand decreased 21.0 percent.

Product detail: Seventy percent of the September rise in prices for unprocessed goods for intermediate demand can be attributed to the index for crude petroleum, which increased 10.1 percent. Prices for raw milk; slaughter chickens; hay, hayseeds, and oilseeds; slaughter cattle; and recyclable paper also advanced. Conversely, the index for nonferrous scrap fell 0.8 percent. Prices for corn and for wheat also declined.

Services for intermediate demand: The index for services for intermediate demand increased 0.3 percent in September after no change in August. Nearly 60 percent of the broad-based September advance is attributable to prices for services less trade, transportation, and warehousing for intermediate demand, which rose 0.3 percent. The indexes for transportation and warehousing services for intermediate demand and for trade services for intermediate demand moved up 0.7 percent and 0.2 percent, respectively. For the 12 months ended in September, prices for services for intermediate demand increased 4.1 percent.

Product detail: A 4.0-percent rise in the index for gross rents of retail properties was a major factor in the September advance in prices for services for intermediate demand. The indexes for deposit services (partial); machinery and equipment parts and supplies wholesaling; arrangement of freight and cargo transportation; investment banking; and hardware, building materials, and supplies retailing also rose. In contrast, prices for loan services (partial) decreased 2.0 percent. The indexes for metals, minerals, and ores wholesaling and for airline passenger services also fell.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand increased 0.4 percent in September, the third consecutive rise. In September, the index for total services inputs to stage 4 intermediate demand advanced 0.5 percent, and prices for total goods inputs moved up 0.3 percent. (See table D.) Increases in the indexes for gross rents of retail properties, deposit services (partial), machinery and equipment parts and supplies wholesaling, gasoline, investment banking, and for commercial and industrial machinery and equipment repair and maintenance outweighed declines in the indexes for loan services (partial); grains; and metals, minerals, and ores wholesaling. For the 12 months ended in September, prices for stage 4 intermediate demand rose 2.4 percent.

Stage 3 intermediate demand: The index for stage 3 intermediate demand advanced 0.9 percent in September after moving up 1.1 percent in August. In September, prices for total goods inputs to stage 3 intermediate demand rose 1.6 percent, and the index for total services inputs increased 0.3 percent. Higher prices for raw milk, slaughter chickens, jet fuel, deposit services (partial), diesel fuel, and arrangement of freight and cargo transportation outweighed declines in the indexes for grains, loan services (partial), and television advertising time sales. For the 12 months ended in September, prices for stage 3 intermediate demand fell 3.2 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand rose 1.5 percent in September, the third consecutive increase. In September, prices for total goods inputs to stage 2 intermediate demand jumped 3.4 percent, and the index for total services inputs edged up 0.1 percent. Advances in the indexes for crude petroleum, deposit services (partial), gas fuels, oilseeds, arrangement of freight and cargo transportation, and machinery and equipment parts and supplies wholesaling outweighed decreases in prices for loan services (partial), broadcast and network television advertising time sales, and wood pulp. For the 12 months ended in September, the index for stage 2 intermediate demand declined 6.9 percent.

Stage 1 intermediate demand: The index for stage 1 intermediate demand moved up 0.4 percent in September after advancing 1.4 percent in August. In September, the index for total services inputs to stage 1 intermediate demand rose 0.4 percent, and prices for total goods inputs climbed 0.3 percent. Increases in the indexes for gross rents of retail properties; diesel fuel; hardware, building materials, and supplies retailing; gasoline; investment banking; and traveler accommodation services outweighed decreases in the indexes for grains; metals, minerals, and ores wholesaling; and airline passenger services. For the 12 months ended in September, prices for stage 1 intermediate demand fell 1.0 percent.