July 2024 Producer Price Index

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The Producer Price Index for final demand increased 0.1 percent in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.2 percent in June and were unchanged in May. (See table A.) On an unadjusted basis, the index for final demand advanced 2.2 percent for the 12 months ended in July.

The July rise in the index for final demand can be attributed to prices for final demand goods, which moved up 0.6 percent. In contrast, the index for final demand services fell 0.2 percent.

Prices for final demand less foods, energy, and trade services advanced 0.3 percent in July after increasing 0.1 percent in June. For the 12 months ended in July, the index for final demand less foods, energy, and trade services moved up 3.3 percent.

Final Demand

Final demand goods: Prices for final demand goods rose 0.6 percent in July, the largest advance since a 1.1-percent jump in February. Nearly 60 percent of the broad-based increase in July can be traced to the index for final demand energy, which moved up 1.9 percent. Prices for final demand goods less foods and energy and for final demand foods also rose, 0.2 percent and 0.6 percent, respectively.

Product detail: A quarter of the July rise in the index for final demand goods is attributable to a 2.8- percent advance in prices for gasoline. The indexes for diesel fuel, meats, jet fuel, fresh fruits and melons, and basic organic chemicals also increased. Conversely, prices for electric power decreased 1.1 percent. The indexes for fresh and dry vegetables and for steel mill products also moved down. (See table 2.)

Final demand services: Prices for final demand services fell 0.2 percent in July, the largest decrease since moving down 0.2 percent in March 2023. The July decline can be traced to the index for final demand trade services, which dropped 1.3 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) In contrast, prices for final demand services less trade, transportation, and warehousing and for final demand transportation and warehousing services rose 0.3 percent and 0.4 percent, respectively.

Product detail: Leading the July decline in prices for final demand services, margins for machinery and vehicle wholesaling decreased 4.1 percent. The indexes for food and alcohol retailing, automobiles retailing (partial), automotive fuels and lubricants retailing, desktop and portable device application software publishing, and physician care also fell. Conversely, prices for portfolio management advanced 2.3 percent. The indexes for chemicals and allied products wholesaling and for truck transportation of freight also rose.

Intermediate Demand by Commodity Type

Within intermediate demand in July, prices for processed goods advanced 0.7 percent, the index for unprocessed goods increased 3.6 percent, and prices for services rose 0.3 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate demand rose 0.7 percent in July, the largest advance since moving up 1.4 percent in February. Over 70 percent of the broad-based increase in July is attributable to a 2.8-percent jump in prices for processed energy goods. The indexes for processed foods and feeds and for processed materials less foods and energy also advanced, 1.3 percent and 0.1 percent, respectively. For the 12 months ended in July, prices for processed goods for intermediate demand moved up 0.8 percent, the first increase since a 2.1-percent rise for the 12 months ended February 2023.

Product detail: Over 60 percent of the July increase in prices for processed goods for intermediate demand can be traced to a 12.9-percent jump in the diesel fuel index. Prices for basic organic chemicals, meats, gasoline, jet fuel, and utility natural gas also moved higher. In contrast, the index for commercial electric power fell 1.2 percent. Prices for cold rolled steel sheet and strip and for processed poultry also declined.

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand moved up 3.6 percent in July, the largest advance since rising 4.6 percent in August 2022. Nearly two-thirds of the broad-based increase in July is attributable to a 6.2-percent jump in prices for unprocessed energy materials. The indexes for unprocessed foodstuffs and feedstuffs and for unprocessed nonfood materials less energy also advanced, 2.9 percent and 0.7 percent, respectively. For the 12 months ended in July, prices for unprocessed goods for intermediate demand moved up 3.2 percent, the largest increase since rising 10.7 percent for the 12 months ended December 2022.

Product detail: Over 40 percent of the July advance in the index for unprocessed goods for intermediate demand can be traced to a 5.5-percent increase in crude petroleum prices. The indexes for natural gas, slaughter poultry, raw milk, slaughter cattle, and carbon steel scrap also moved higher. Conversely, corn prices decreased 5.4 percent. The indexes for wheat and for raw cotton also declined.

Services for intermediate demand: The index for services for intermediate demand moved up 0.3 percent in July, the fifth consecutive increase. A major factor in the broad-based July advance was a 0.3-percent rise in prices for services less trade, transportation, and warehousing. The indexes for trade services for intermediate demand and for transportation and warehousing services for intermediate demand each inched up 0.1 percent. For the 12 months ended in July, prices for services for intermediate demand increased 3.3 percent.

Product detail: Over 40 percent of the July advance in the index for services for intermediate demand can be traced to a 1.5-percent rise in prices for nonresidential real estate services. The indexes for securities brokerage, dealing, investment advice, and related services; machinery and equipment parts and supplies wholesaling; portfolio management; chemicals and allied products wholesaling; and truck transportation of freight also moved higher. In contrast, prices for business loans (partial) fell 2.0 percent. The indexes for automotive fuels and lubricants retailing 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 rose 0.4 percent in July after no change in June. In July, the index for total services inputs to stage 4 intermediate demand advanced 0.5 percent, and prices for total goods inputs moved up 0.2 percent. (See table D.) Increases in the indexes for nonresidential real estate services; securities brokerage, dealing, investment advice, and related services; machinery and equipment parts and supplies wholesaling; portfolio management; diesel fuel; and meats outweighed declining prices for business loans (partial), commercial electric power, and steel mill products. For the 12 months ended in July, the index for stage 4 intermediate demand rose 2.4 percent, the largest advance since moving up 2.4 percent for the 12 months ended August 2023.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand rose 0.8 percent in July, the largest increase since a 1.0-percent advance in February. In July, the index for total goods inputs to stage 3 intermediate demand jumped 1.7 percent, and prices for total services inputs inched up 0.1 percent. Increases in the indexes for diesel fuel, raw milk, slaughter poultry, jet fuel, slaughter cattle, and nonresidential real estate services outweighed declining prices for steel mill products, corn, and business loans (partial). For the 12 months ended in July, the index for stage 3 intermediate demand moved up 2.2 percent, the largest advance since rising 2.4 percent for the 12 months ended February 2023.

Stage 2 intermediate demand: The index for stage 2 intermediate demand rose 1.1 percent in July following an increase of 0.7 percent in June. In July, prices for total goods inputs to stage 2 intermediate demand advanced 2.8 percent. In contrast, the index for total services inputs edged down 0.1 percent. Increasing prices for crude petroleum, natural gas, basic organic chemicals, carbon steel scrap, commissions from sales of insurance, and legal services outweighed decreases in the indexes for business loans (partial), automotive fuels and lubricants retailing, and oilseeds. For the 12 months ended in July, prices for stage 2 intermediate demand rose 2.8 percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand advanced 0.7 percent in July after no change in June. In July, the index for total goods inputs to stage 1 intermediate demand rose 0.8 percent, and prices for total services inputs moved up 0.5 percent. Increases in the indexes for diesel fuel; basic organic chemicals; nonresidential real estate services; securities brokerage, dealing, investment advice, and related services; carbon steel scrap; and chemicals and allied products wholesaling outweighed falling prices for steel mill products, corn, and guestroom rental. For the 12 months ended in July, the index for stage 1 intermediate demand rose 1.6 percent, the largest increase since advancing 3.8 percent for the 12 months ended February 2023.