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Finished and Intermediate Goods PPIs Fall; Crude Materials PPI Rises

12/13/2002

The Producer Price Index for Finished Goods decreased 0.4 percent in November, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decline followed a 1.1-percent increase in October and a 0.1-percent gain in September. Falling prices for gasoline and passenger cars led the decline in the finished goods index in November. At the earlier stages of processing, prices received by intermediate goods manufacturers fell 0.1 percent, after moving up 0.7 percent in October. The crude goods index advanced 5.1 percent in November, following a 3.4-percent increase in the previous month.

Finished goods
Prices for finished energy goods fell 1.8 percent in November, following a 4.2-percent gain in the previous month. The gasoline index led this downturn — dropping 9.0 percent, after rising 17.9 percent in October. Prices for home heating oil, diesel fuel, and liquefied petroleum gas also fell in November, following increases in the prior month. The downturn in the finished energy goods index was partially offset by residential electric power prices — which edged up 0.1 percent, following a 0.3-percent decline in October. Residential natural gas prices advanced at a slightly faster pace in November than they did a month earlier.

The index for finished consumer goods other than foods and energy decreased 0.3 percent in November, following a 0.6-percent increase in the prior month. Approximately half of this downturn was due to passenger car prices — which fell 3.6 percent, after posting a 2.2-percent gain in October. Prices for light motor trucks and pharmaceutical preparations rose at a slower rate than they did in the previous month. The sporting and athletic goods index fell more than it did in October. By contrast, the sanitary papers and health products index moved up 1.2 percent in November, after falling 0.3 percent a month earlier. Prices for cigarettes, soaps and synthetic detergents, mobile homes, floor coverings, and periodical circulation also turned up, following decreases in October.

The capital equipment index turned down 0.2 percent in November, after rising 0.4 percent in the prior month. Passenger car prices dropped 3.6 percent, following a 2.2-percent increase in October. Price increases slowed from October to November for light motor trucks and civilian aircraft. The indexes for communication and related equipment, metal cutting machine tools, and electronic computers decreased more than they did a month earlier. By contrast, the indexes for heavy motor trucks and construction machinery rose in November, after showing no change in the previous month. The indexes for railroad equipment and industrial material handling equipment both advanced, following decreases in the prior month. Commercial furniture prices rose at a slightly faster pace than they did a month earlier.

Intermediate goods
The Producer Price Index for Intermediate Materials, Supplies, and Components inched down 0.1 percent in November, compared with a 0.7-percent advance in October. Intermediate energy goods prices also turned down, after rising in the previous month. The nondurable manufacturing materials index advanced at a slower rate in November than in the prior month, while prices for construction materials retreated at a slightly quicker pace than in October. On the other hand, the durable manufacturing materials index — which showed no change in October — moved up 0.6 percent in November. Prices for intermediate foods and feeds turned up in November, following a decline in the prior month. Excluding foods and energy, the index for intermediate goods rose 0.1 percent, the same rate of increase as in October.

Subsequent to a 4.1-percent jump in October, prices for intermediate energy goods decreased 1.5 percent in November. Prices for gasoline, diesel fuel, jet fuels, natural gas to electric utilities, and liquefied petroleum gas also turned down in November. The indexes for commercial natural gas and residual fuels rose less than they did in October. By contrast, industrial electric power prices advanced 2.4 percent in November, after declining at a 0.9-percent rate a month earlier. The commercial electric power index moved up at a quicker pace in November than it did in the preceding month.

In the nondurable manufacturing materials sector, price increases slowed to a 0.5-percent rate in November from a 0.8-percent rate in October. Price increases for industrial chemicals, plastic resins and materials, nitrogenates, and finished fabrics outweighed price declines for paperboard and phosphates.

The index for durable manufacturing materials advanced 0.6 percent in November, after showing no change in October. Prices for hot rolled steel sheet and strip jumped 2.7 percent, compared with a 0.4-percent gain in the previous month. The indexes for primary aluminum (except extrusion billet), copper cathode and refined copper, and original equipment automobile stampings turned up in November. Prices for copper and brass mill shapes and prepared paint fell at a slower pace in November than they did a month earlier. The acceleration in the durable manufacturing materials index was partly offset by prices for cold rolled steel sheet and strip — which increased 0.4 percent, following a 1.7-percent rise in October. The rate of increase in prices for aluminum mill shapes also slowed in November compared with October. The indexes for plywood and building paper and board declined at a faster rate than they did in the prior month. Prices for cold finished steel bars turned down in November.

Crude goods
The Producer Price Index for Crude Materials for Further Processing moved up 5.1 percent in November, after climbing 3.4 percent in the preceding month. This acceleration was due to a faster rate of increase in prices for crude energy materials. A slowdown in the rate of price increase for basic industrial materials slightly offset the impact of energy prices. Crude foodstuff and feedstuff prices inched down in November, after declining by the same amount a month earlier.

The crude energy materials index rose 13.1 percent in November, after posting an 8.9-percent increase in the previous month. The natural gas index climbed 37.9 percent, following an 18.5-percent advance in October. On the other hand, the crude petroleum index dropped 13.5 percent, compared with a 1.7-percent gain in October. Coal prices moved up 0.6 percent in November, after rising 0.9 percent in the prior month.

Prices for basic industrial materials advanced 0.4 percent in November, following a 0.9-percent gain in October. Rising prices were registered by the indexes for raw cotton, leaf tobacco, aluminum base scrap, copper base scrap, and pulpwood. By contrast, the indexes for iron and steel scrap; hides and skins; softwood logs, bolts, and timber; nonferrous metal ores; and phosphates posted falling prices in November.

The index for crude foodstuffs and feedstuffs moved down 0.1 percent in November, after posting the same rate of change in the prior month. Falling prices for corn, wheat, fluid milk, and fresh fruits and melons were offset by rising prices for slaughter cattle, soybeans, slaughter turkeys, slaughter broilers and fryers, unprocessed shellfish, and slaughter hogs.

Net output price indexes for manufacturing
Subsequent to a 1.0-percent gain in October, the Producer Price Index for the Net Output of Total Manufacturing Industries fell 0.7 percent in November. The index for the petroleum refining and related products industry group decreased 8.9 percent in November, following an 8.2- percent advance in the previous month. Prices received by the industry groups for transportation equipment; apparel and other finished fabrics; and stone, clay, glass, and concrete products turned down in November, after rising a month earlier. The index for the food and kindred products industry group increased less in November than it did in October. By contrast, prices for the chemicals and allied products industry group advanced 0.7 percent, after rising 0.5 percent in October. The industry group index for electrical and electronic machinery, equipment, and supplies fell less in November than it did in the previous month. Prices received by the paper and allied products industry group rose, after showing no change in October. The industry group index for fabricated metal products, except machinery and transportation equipment, turned up in November, following a decrease a month earlier. In November, the Producer Price Index for the Net Output of Total Domestic Manufacturing Industries was 134.7 (December 1984=100), 1.5 percent above its year-ago level.

A full (PDF) version version of the report is available from the Bureau of Labor Statistics Web site.

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