Producer Price Index News Release text

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http://www.bls.gov/ppi              SEPTEMBER 10, 2004
                                     
                   Producer Price Indexes -- August 2004

     The Producer Price Index for Finished Goods declined 0.1 percent in
August, seasonally adjusted, the Bureau of Labor Statistics of the U.S.
Department of Labor reported today.  This decrease followed a 0.1-percent
advance in July and a 0.3-percent decline in June.  At the earlier stages
of processing, prices received by manufacturers of intermediate goods
jumped 1.0 percent in August, after a 0.8-percent gain in the preceding
month, while the crude goods index fell 0.7 percent, compared with a 0.2-
percent decrease in July.  (See table A.)

Table A.  Monthly and annual percent changes in selected stage-of-processing price
indexes, seasonally adjusted
 ______________________________________________________________________________________
|        |                                                         |         |         |
|        |                   Finished goods                        |         |         |
|        |                                                         |         |         |
|        |---------------------------------------------------------|         |         |
|        |          |          |          |         |  Change in   |         |         |
|        |          |          |          | Except  |finished goods| Inter-  |         |
|        |          |          |          |foods and|from 12 months| mediate |  Crude  |
| Month  |  Total   |  Foods   |  Energy  | energy  |  ago(unadj.) | goods   |  goods  |
|--------------------------------------------------------------------------------------|
 2003                                                    
  Aug.        0.5        0.8        1.4       0.1         3.5          0.6      -1.0
  Sept.        .2        1.2        -.1         0         3.5          -.1       2.7
  Oct.         .6        2.0        -.4        .5         3.4           .3       2.8
  Nov.        -.1        -.3        -.7         0         3.4            0         0
  Dec.         .2         .2        1.4       -.1         4.0           .4       3.4
                                                                              
 2004                                                                          
  Jan.         .6       -1.3        4.7        .3         3.3           .9       4.1
  Feb.         .1         .4         .3       -.1         2.1          1.0       1.5
  Mar.         .6        1.5         .6        .3         1.5           .8       1.6
  Apr.       r .7      r 1.3      r 1.8      r .1         3.7        r 1.4     r 1.8
  May        r .7      r 1.4      r 1.4      r .4         5.0         r .9     r 1.8
  June        -.3        -.6       -1.6        .2         4.0           .5       1.6
  July         .1       -1.6        2.3        .1         4.0           .8       -.2
  Aug.        -.1        -.2         .2       -.1         3.4          1.0       -.7
r=revised.  Some of the figures shown above and elsewhere in this release may differ 
from those previously reported because data for April 2004 have been revised to 
reflect the availability of late reports and corrections by respondents.

                                    -2-
                                     
     Among finished goods, prices for both finished goods other than foods
and energy and finished consumer foods edged down in August -- falling 0.1
and 0.2 percent, respectively.  By contrast, the finished energy goods
index moved up 0.2 percent in August.

     Before seasonal adjustment, the Producer Price Index for Finished
Goods decreased 0.1 percent in August to 148.6 (1982=100).  From August
2003 to August 2004, the finished goods index rose 3.4 percent.  Over the
same period, prices for finished energy goods climbed 9.9 percent, the
index for finished consumer foods increased 4.0 percent, and prices for
finished goods other than foods and energy advanced 1.5 percent.  At the
earlier stages of processing, the index for intermediate goods moved up 8.1
percent, and prices for crude goods rose 22.4 percent for the 12-month
period ended August 2004.

Finished goods

     The index for finished consumer goods other than foods and energy
decreased 0.2 percent in August, after inching up 0.1 percent in July.  The
light motor trucks index fell 2.5 percent, after showing no change in July,
while passenger car prices declined 1.2 percent in August, compared with a
0.4-percent decrease a month earlier.  The indexes for cosmetics and other
toilet preparations, sanitary papers and health products, and household
appliances fell, following increases in July.  Prices for book publishing,
periodical circulation, and men's and boys' apparel were unchanged in
August, after rising in the preceding month.  By contrast, the alcoholic
beverages index jumped 1.3 percent, compared with a 0.1-percent increase in
July.  Prices for pharmaceutical preparations also rose at a quicker pace
in August than they did in July.  The indexes for women's, girls', and
infants' apparel and for household furniture turned up, after falling in
July.

Table B.  Monthly and annual percent changes in selected price indexes for 
intermediate goods and crude goods, seasonally adjusted
 __________________________________________________________________________________
|      |                                     |                                     |
|      |       Intermediate goods            |       Crude goods                   |
|      |                                     |                                     |
|      |---------------------------------------------------------------------------|
|      |       |        |         |Change in |       |         |         | Change  |
|      |       |        |         | interme- |       |         |         |in crude |
|      |       |        |         |  diate   |       |         |         | goods   |
|      |       |        |         |goods from|       |         |         | from 12 |
|      |       |        | Except  |12 months |       |         | Except  | months  |
|      |       |        |foods and|   ago    |       | Energy  |foods and|  ago    |
|Month | Foods | Energy | energy  | (unadj.) | Foods | (unadj.)| energy  |(unadj.) |
|----------------------------------------------------------------------------------|
 2003                                                            
  Aug.     0.2      2.4      0.1       4.4       3.7     -6.1       2.0      20.8
  Sept.    2.7     -2.0       .2       3.7       7.0     -1.1       2.7      21.5
  Oct.     2.7      -.2       .3       3.4       8.5     -2.8       3.0      22.6
  Nov.     2.6     -1.3       .1       3.4       -.6     -1.3       4.3      18.0
  Dec.     -.3      1.4       .2       3.9        .3      7.0       3.0      19.5
                                                                         
 2004                                                                    
  Jan.    -1.3      2.9       .6       3.9      -6.8     15.3       3.7      16.1
  Feb.     1.3       .7       .9       2.8       4.3     -2.8       6.1      12.0
  Mar.     2.5       .4       .8       1.5       6.9     -3.7       2.8        .5
  Apr.   r 4.7    r 1.8    r 1.1     r 5.4     r 3.3    r 3.8    r -4.3    r 21.6
  May    r 2.8    r 1.5     r .7       7.1     r 2.9    r 4.1    r -4.9      21.9
  June    -2.2       .7       .5       6.9      -3.6      7.7       -.5      18.9
  July    -1.4      2.3       .5       7.6      -4.8       .2       8.6      22.2
  Aug.    -5.2      2.7      1.0       8.1      -4.6      -.1       4.5      22.4
r=revised.  Some of the figures shown above and elsewhere in this release may 
differ from those previously reported because data for April 2004 have been 
revised to reflect the availability of late reports and corrections by 
respondents.

                                    -3-

     The finished consumer foods index fell 0.2 percent in August, after a
1.6-percent drop in July.  The rate of decline in prices for beef and veal
slowed to 3.2 percent in August from 8.3 percent in the previous month.
The dairy products index also fell less in August than it did in July.
Prices for fresh and dry vegetables, soft drinks, and shortening and
cooking oils moved up in August, after falling a month earlier.  The pork
index increased at a faster rate than it did in the preceding month.
Conversely, processed young chicken prices dropped 7.1 percent in August,
compared with a 1.1-percent decrease in July.  The index for eggs for fresh
use and the index for fresh fruits and melons also went down more than they
did in the preceding month, while price increases for finfish and shellfish
slowed in August.
     
     Capital equipment prices inched down 0.1 percent in August, compared
with a 0.1-percent rise in July.  The light motor trucks index fell 2.5
percent in August, after showing no change in the previous month.  The
indexes for passenger cars, electronic computers, and x-ray and
electromedical equipment decreased at a faster rate than they did a month
earlier.  Prices for semiconductor manufacturing equipment turned down in
August.  On the other hand, prices for communication and related equipment
increased 0.2 percent in August, following a 0.7-percent decline in the
preceding month.  The indexes for commercial furniture, heavy motor trucks,
and integrating and measuring instruments also turned up, after falling in
July.
     
     The finished energy goods index advanced 0.2 percent in August,
following a 2.3-percent gain in the prior month.  In August, rising prices
for liquefied petroleum gas, residential natural gas, home heating oil,
residential electric power, and diesel fuel slightly outweighed falling
prices for gasoline and finished lubricants.

Intermediate goods

     The Producer Price Index for Intermediate Materials, Supplies, and
Components rose 1.0 percent in August, after posting a 0.8-percent gain in
the previous month.  Prices for materials and components for construction,
materials for nondurable manufacturing, intermediate energy goods, and
materials for durable manufacturing also rose at a faster rate than they
did in July.  On the other hand, the intermediate foods and feeds index
fell more in August than it did a month earlier.  Prices for intermediate
goods other than foods and energy advanced 1.0 percent, following a 0.5-
percent increase in the prior month.  (See table B.)
     
     Subsequent to a 0.2-percent increase in July, the index for materials
and components for construction moved up 1.4 percent in August.  Plywood
prices turned up 13.7 percent in August, after falling 11.1 percent in the
preceding month, and the softwood lumber index increased 8.1 percent,
compared with a 1.9-percent decrease in July.  The indexes for building
paper and board, treated wood, and air conditioning and refrigeration
equipment also rose, following declines in July.  Prices for fabricated
structural metal products, concrete products, and plastic construction
products increased more than they did in the previous month.  By contrast,
the mineral wool for structural insulation index edged down 0.1 percent in
August, compared with a 5.6-percent rise a month earlier.  Prices for
plumbing fixtures and brass fittings also turned down, while the indexes
for fabricated ferrous wire products and switchgear rose less than they did
in July.  Prices for asphalt felts and coatings showed no change in August,
after posting an increase in the prior month.
     
     The rate of increase in the index for materials for nondurable
manufacturing rose from 1.0 percent in July to 1.7 percent in August.
Accounting for much of this acceleration, the industrial chemicals index
jumped 5.7 percent, following a 1.6-percent gain in July.  Prices for
fertilizer materials and paint materials also increased more than they did
in the preceding month, while paper prices turned up in August.
Alternatively, the paperboard index fell 0.4 percent in August, after
climbing 5.5 percent in the previous month.  Prices for inedible fats and
oils, processed yarns and threads, and synthetic fibers also turned down,
following increases in the prior month.  The medicinal and botanical
chemicals index declined at a quicker rate in August than it did a month
earlier, while prices for plastic resins and materials rose less than they
did in July.
     
                                    -4-

     The intermediate energy goods index went up 2.7 percent in August,
following a 2.3-percent gain in the prior month.  Industrial electric power
prices turned up 3.0 percent, after falling 1.2 percent in the preceding
month.  The indexes for commercial electric power and residual fuel also
advanced, following decreases in July.  Prices for industrial natural gas,
liquefied petroleum gas, and commercial natural gas rose more quickly in
August than they did in the previous month.  On the other hand, the
gasoline index dropped 5.0 percent in August, after moving up 5.4 percent
in the preceding month.  The indexes for natural gas to electric utilities,
jet fuels, and diesel fuel increased at a slower rate than they did in
July.

     A 10.3-percent increase in the index for hot rolled steel bars,
plates, and structural shapes was the most important factor behind a 1.1-
percent gain in the index for materials for durable manufacturing in
August.  Price increases were also registered for plywood, cold rolled
steel sheet and strip, building paper and board, cold finished steel bars,
cement, and aluminum mill shapes.  By contrast, the indexes for primary
nonferrous metals, unprocessed filament yarns, and copper and brass mill
shapes declined in August.

     The intermediate foods and feeds index moved down 5.2 percent in
August, compared with a 1.4-percent decline in the preceding month.  Prices
for prepared animal feeds plunged 10.1 percent, after rising 2.3 percent in
July.  Confectionery material prices also turned down in August, while the
indexes for processed young chickens; flour; and dry, condensed, and
evaporated milk products fell more than they did in the prior month.  On
the other hand, the beef and veal index went down 3.2 percent in August,
following an 8.3-percent drop in the previous month.  Prices for fluid milk
products also decreased less than they did in July.  The indexes for
natural, processed, and imitation cheese and for shortening and cooking
oils turned up, following declines a month earlier, and the index for pork
rose more than it did in July.
     
Crude goods

     The Producer Price Index for Crude Materials for Further Processing
fell 0.7 percent in August, after edging down 0.2 percent in July.  In
August, declining prices for crude foodstuffs and feedstuffs and for crude
energy materials outweighed rising prices for crude goods other than foods
and energy.  (See table B.)
     
     The crude foodstuffs and feedstuffs index decreased 4.6 percent in
August, following a 4.8-percent decline in July.  Falling prices for
soybeans, fluid milk, corn, slaughter broilers and fryers, wheat, and fresh
fruits and melons outweighed price increases for fresh and dry vegetables,
slaughter cattle, slaughter hogs, unprocessed finfish, and slaughter
turkeys.
     
     The August index for crude energy materials inched down 0.1 percent,
following a 0.2-percent gain a month earlier.  Natural gas prices dropped
6.7 percent, after slipping 2.0 percent in the preceding month.
Conversely, the crude petroleum index advanced 12.5 percent, compared with
a 5.3-percent increase in July.  Coal prices turned up 0.1 percent,
following a 0.9-percent drop in the prior month.
                                     
     Price increases for basic industrial materials slowed from July to
August -- rising 8.6 and 4.5 percent, respectively.  The iron and steel
scrap index increased 7.7 percent in August, following a 32.2-percent surge
in July.  The indexes for construction sand, gravel, and crushed stone;
aluminum base scrap; copper base scrap; and hides and skins also rose less
rapidly in August.   Prices for gold ores turned down, after moving up in
the previous month.  By contrast, falling prices for raw cotton slowed in
August, declining 3.0 percent after sliding 15.5 percent a month earlier.
The indexes for phosphates, iron ore, and for hardwood logs, bolts, and
timber turned up, following declines in the prior month.  Wastepaper prices
rose more quickly in August than they did in July.

                                    -5-

Net output price indexes for mining, manufacturing, and services industries

Mining.  The Producer Price Index for the Net Output of Total Mining
Industries advanced 1.3 percent in August, after rising 0.9 percent in
July.  (Net output price indexes are not seasonally adjusted.)  Much of
this acceleration can be attributed to prices received by the natural gas
liquid extraction industry, which turned up 2.2 percent following a 0.3-
percent decrease in July.  The industry indexes for bituminous coal and
lignite surface mining; potash, soda, and borate mineral mining; and iron
ore mining also turned up in August.  Prices received by the oil and gas
well drilling industry rose more in August than they did in the prior
month, while the bituminous coal and lignite underground mining industry
index increased, after showing no change in July.  By contrast, the crude
petroleum and natural gas extraction industry index increased 0.3 percent,
after rising 1.5 percent in July.  Prices for oil and gas operations
support activities also advanced less than they did in the previous month,
while the industry indexes for gold ore mining and support activities for
coal mining fell, following increases in July.  In August 2004, the
Producer Price Index for the Net Output of Total Mining Industries was
157.2 (December 1984=100), 25.3 percent above its year-ago level.

Manufacturing.  The Producer Price Index for the Net Output of Total
Manufacturing Industries rose 0.2 percent in August, compared with a 0.3-
percent increase in the prior month.  In August, price increases received
by the industries for petroleum and coal products, furniture and related
products, chemicals, plastics and rubber products, and primary metals
outweighed falling prices received by manufacturers of food products,
transportation equipment, and computer and electronic products.  In August,
the Producer Price Index for the Net Output of Total Manufacturing
Industries was 143.7 (December 1984=100), 4.9 percent above its year-ago
level.

Services.  Among services industries in August, prices turned down for
general medical and surgical hospitals, hotels (excluding casino hotels)
and motels, software publishers, and scheduled freight air transportation.
The rate of increase in the indexes for direct life insurance carriers,
passenger car rental, and nonresidential property managers slowed from July
to August.  Alternatively, the industry indexes for scheduled passenger air
transportation, investment banking and securities dealing, and wired
telecommunications carriers turned up in August, after falling in July.


                                   *****
Producer Price Index data for September 2004 are scheduled to be released
on Friday, October 15, 2004, at 8:30 a.m. (EDT).