Price movements September 2004

Price movements September 2004

The Producer Price Index for Finished Goods increased 0.1 percent in September, seasonally adjusted. This increase followed a 0.1-percent decline in August and a 0.1-percent rise in July. At the earlier stages of processing, prices received by manufacturers of intermediate goods edged up 0.1 percent in September, after a 1.0-percent gain in the preceding month, while the crude goods index fell 4.2 percent, compared with a 0.7-percent decrease in August. (See table A.)

Among finished goods, prices for goods other than foods and energy turned up 0.3 percent in September, following a decline of 0.1 percent in the prior month, while the consumer foods index rose 0.1 percent in September, after falling 0.2 percent in August. By contrast, the index for finished energy goods tamed down 0.9 percent, compared with a 0.2-percent increase in August.

During the third quarter of 2004, the finished goods index increased at a 0.3-percent seasonally adjusted annual rate, after rising at a 4.7-percent rate during the second quarter of 2004. The index for finished goods other than foods and energy climbed at a 1.1-percent seasonally adjusted annual rate during the third quarter of 2004, compared with a 2.9-percent seasonally adjusted annual rate of increase during the second quarter. Among prices for raw and partially processed goods, the intermediate goods index advanced at a 7.8-percent seasonally adjusted annual rate during the third quarter of 2004, following an 11.7-percent seasonally adjusted annual rate of increase from March to June. Prices for crude goods decreased at an 18.8-percent seasonally adjusted annual rate from June to September, compared with a 23.2-percent seasonally adjusted annual rate of increase in the preceding quarter. (See the summary table on page 2.)

Before seasonal adjustment, the Producer Price Index for Finished Goods rose 0.1 percent in September to 148.7 (1982=100). From September 2003 to September 2004, the finished goods index rose 3.3 percent. Over the same period, prices for finished energy goods climbed 9.2 percent, the index for finished consumer foods increased 2.8 percent, and prices for finished goods other than foods and energy advanced 1.9 percent. At the earlier stages of processing, the index for intermediate goods moved up 8.4 percent, and prices for crude goods rose 14.2 percent for the 12-month period ended September 2004.

Finished goods

The index for finished consumer goods other than foods and energy rose 0.4 percent in September, after declining 0.2 percent in August. The upturn in this index was led by an increase in motor vehicle prices in September. The light motor trucks index increased 0.2 percent, after falling 2.5 percent in August, and passenger car prices rose 1.1 percent in September, following a 1.2-percent decrease in the prior month. The indexes for sanitary papers and health products and household appliances also turned up in September. Prices for mobile homes and women’s, girls’, and infants’ apparel rose more in September than they did in August. The index for cosmetics and other toilet preparations showed no change in September, compared with a decline in the previous month. Conversely, the alcoholic beverages index showed no change in September, after rising 1.3 percent in August. Prices for pharmaceutical preparations and household furniture rose less in September than they did in the prior month. The index for pet food turned down, following an increase in August. From June to September 2004, the index for finished consumer goods other than foods and energy rose at a 1.0-percent seasonally adjusted annual rate, after increasing at a 2.3-percent seasonally adjusted annual rate from March to June.

Subsequent to a 0.1-percent decrease in August, capital equipment prices rose 0.4 percent in September. As they did in the index for consumer goods other than foods and energy, prices for motor vehicles led the turnaround in the capital equipment index. The indexes for both light motor trucks and passenger cars increased in September, after falling in August. Prices for x-ray and electromedical equipment also turned up in September, and the index for communication and related equipment advanced at a faster pace in September than it did in August. On the other hand, prices for civilian aircraft showed no change, compared with a 1.4-percent increase in the prior month. The indexes for commercial furniture and railroad equipment fell, after rising in the previous month. Price increases slowed from August to September for heavy motor trucks. From June to September 2004, capital equipment prices rose at a 1.4-percent seasonally adjusted annual rate, after a 3.5-percent seasonally adjusted annual rate of increase from March to June.

The finished consumer foods index edged up 0.1 percent in September, after a 0.2-percent decline in August. Prices for fresh fruits and melons jumped 23.1 percent in September, compared with a 1.2-percent decrease in the prior month. The index for eggs for fresh use also turned up in September. The rates of decline in prices for dairy products and beef and veal slowed from August to September. By contrast, the fresh and dry vegetables index rose 12.1 percent, following a 31.8-percent advance in the previous month. The indexes for soft drinks, finfish and shellfish, pork, and shortening and cooking oils declined, after posting increases in August. During the third quarter of 2004, the index for finished consumer foods decreased at a 6.8-percent seasonally adjusted annual rate, after advancing at an 8.5-percent seasonally adjusted annual rate in the second quarter.

The finished energy goods index declined 0.9 percent in September, following a 0.2-percent increase in the prior month. Residential natural gas prices fell 2.3 percent, after rising 1.1 percent in August. The indexes for liquefied petroleum gas, home heating oil, residential electric power, and diesel fuel also turned down in September. On the other hand, gasoline prices turned up 0.7 percent, compared with a decrease of 5.0 percent in August. During the third quarter of 2004, the index for finished energy goods increased at a 6.3-percent seasonally adjusted annual rate, after advancing at a 6.4-percent seasonally adjusted annual rate during the second quarter.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components inched up 0.1 percent in September, after posting a 1.0-percent gain in the previous month. Rising prices for nondurable manufacturing materials, durable manufacturing materials, and materials and components for construction slightly outweighed price declines for intermediate energy goods and intermediate foods and feeds. Excluding foods and energy, prices for intermediate goods rose 0.7 percent, following a 1.0-percent increase in August. (See table B.)

The index for materials for nondurable manufacturing advanced 1.7 percent in September, the same rate of increase as in August. In September, rising prices were received by producers of plastic resins and materials, primary basic organic chemicals, paper, potassium and sodium compounds, fertilizer materials, and synthetic rubber. These increases more than offset falling prices for gray fabrics, inedible fats and oils, intermediate basic organic chemicals, finished fabrics, medicinal and botanical chemicals, and leather. The index for nondurable manufacturing materials moved up at a 19.4-percent seasonally adjusted annual rate from June to September, following a 12.7-percent seasonally adjusted annual rate of increase in the second quarter of 2004.

Prices for materials for durable manufacturing climbed 1.5 percent in September, following a 1.1-percent increase in the preceding month. The index for aluminum mill shapes jumped 6.4 percent, after edging up 0.2 percent a month earlier. Prices for hot rolled steel sheet and strip fell less in September than they did in August, while the indexes for semifinished steel mill products and for cold rolled steel sheet and strip increased more rapidly over the same period. Prices for unprocessed filament yams turned up in September, after decreasing in the previous month. On the other hand, the index for hot rolled steel bars, plates, and structural shapes moved up 1.1 percent, following a 10.3-percent advance in August. Rising prices for plywood, building paper and board, cold finished steel bars, cement, and hardwood lumber also slowed from August to September. The index for materials for durable manufacturing advanced at a 15.1-percent seasonally adjusted annual rate in the third quarter of 2004, following a 21.4-percent seasonally adjusted annual rate of increase in the previous quarter.

Rising prices for materials and components for construction slowed to 0.7 percent in September, compared with a 1.4-percent gain in the prior month. The index for fabricated structural metal products inched up 0.2 percent, following a 1.7-percent gain in August. The indexes for plywood, treated wood, building paper and board, and steel mill products also increased at a slower rate in September than they did a month earlier. Prices for softwood lumber and nonferrous wire and cable declined, after rising in the previous month. By contrast, prices for concrete products climbed 1.7 percent in September, following a 0.9-percent rise in the preceding month. The indexes for plastic construction products, wiring devices, paving mixtures and blocks, and switchgear also rose more quickly in September than they did in August. Prices for asphalt felts and coatings increased, after showing no change in the previous month. The index for plumbing fixtures and brass fittings turned up, following a decrease in August. Prices for materials and components for construction grew at a 9.7-percent seasonally adjusted annual rate during the third quarter of 2004, after increasing at a 13.2-percent seasonally adjusted annual rate during the preceding quarter.

The index for intermediate energy goods fell 1.9 percent in September, following a 2.7-percent increase in the prior month. Industrial natural gas prices dropped 4.9 percent, compared with a 3.7-percent gain in August. The indexes for jet fuels, diesel fuel, industrial electric power, commercial natural gas, and liquefied petroleum gas also turned down, after rising in August. Alternatively, gasoline prices advanced 0.7 percent in September, following a 5.0-percent decline a month earlier. The index for finished lubricants also turned up in September. The intermediate energy goods index increased at a 13.1-percent seasonally adjusted annual rate during the third quarter of 2004, after rising at a 17.5-percent seasonally adjusted annual rate in the previous quarter.

The rate of decline in the index for intermediate foods and feeds slowed from August to September–from 5.2 to 1.7 percent, respectively. Prices for prepared animal feeds decreased 3.0 percent, compared with a 10.1-percent drop in the prior month. The indexes for fluid milk products; beef and veal; and dry, condensed, and evaporated milk products also fell less in September than they did August. Flour prices advanced in September, after declining a month earlier. By contrast, prices for shortening and cooking oils dropped 3.3 percent in September, following a 3.0-percent gain in the preceding month. The indexes for natural, processed, and imitation cheese; pork; and refined sugar and byproducts also turned down, after rising in the previous month. Prices for processed young chickens fell more in September than they did in August. The index for intermediate foods and feeds declined at a 28.6-percent seasonally adjusted annual rate from June to September 2004, compared with a 23.0-percent seasonally adjusted annual rate of increase during the second quarter.

Crude goods

The Producer Price Index for Crude Materials for Further Processing fell 4.2 percent in September, following a 0.7-percent decline in August. Prices for crude energy materials also decreased more in September than they did in the prior month, while an August increase in the index for crude goods other than foods and energy was followed by a decline in September. By contrast, prices for crude foodstuffs and feedstuffs fell less in September than they did a month earlier. (See table B.)

The crude energy materials index decreased 6.6 percent in September, after edging down 0.1 percent in the preceding month. Prices for crude petroleum declined 0.3 percent, following a 12.5-percent jump in August. The index for natural gas tumbled 12.4 percent, compared with a 6.7-percent decline in the previous month. On the other hand, coal prices climbed 2.9 percent in September, after inching up 0.1 percent in the prior month. After rising at an 83.2-percent seasonally adjusted annual rate during the second quarter of 2004, the index for crude energy materials fell at a 23.8-percent seasonally adjusted annual rate from June to September.

Prices for basic industrial materials moved down 2.5 percent in September, following a 4.5-percent advance in the previous month. The index for iron and steel scrap fell 8.7 percent, after posting a 7.7-percent gain in August. Prices for aluminum base scrap, copper base scrap, and wastepaper also turned down in September, following increases in the prior month. The hides and skins index went up less than it did in the preceding month. Alternatively, raw cotton prices jumped 11.7 percent in September, compared with a 3.0-percent decrease a month earlier. The indexes for gold ores and pulpwood also turned up in September, while prices for softwood logs, bolts, and timber showed no change, after falling in August. During the third quarter of 2004, the index for crude nonfood materials less energy rose at a 50.3-percent seasonally adjusted annual rate, following a 32.8-percent seasonally adjusted annual rate of decline during the previous quarter.

Prices for crude foodstuffs and feedstuffs went down 2.1 percent in September, after falling 4.6 percent in the preceding month. The main cause of this index’s movement was the slowing rate of decline in prices for soybeans–which decreased 3.1 percent in September following a 35.5-percent decline in August. The indexes for fluid milk and corn also fell less than they did in the previous month, while prices for wheat and fresh fruits and melons turned up in September. By contrast, the index for slaughter broilers and fryers dropped 13.7 percent in September, following a 4.0-percent decline in the prior month. The indexes for fresh vegetables (except potatoes) and unprocessed finfish rose less than they did in August, and prices for slaughter cattle and slaughter hogs turned down in September. Prices for crude foodstuffs and feedstuffs decreased at a 37.5-percent seasonally adjusted annual rate for the three months ending in September 2004, compared with a 9.7-percent seasonally adjusted annual rate of increase in the preceding quarter.

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

Mining. The Producer Price Index for the Net Output of Total Mining Industries declined 5.3 percent in September, following a 1.3-percent rise in August. (Net output price indexes are not seasonally adjusted.) Most of this downturn can be traced to prices received by the industry for natural gas liquid extraction, which fell 13.9 percent in September after advancing 2.2 percent in the preceding month. The industry indexes for crude petroleum and natural gas extraction and for potash, soda, and borate minerals mining also moved down, following August gains. Prices received by the industries for oil and gas well drilling and miscellaneous metal ores mining increased at a slower rate in September than they did in the prior month. By contrast, the index for the bituminous coal and lignite surface mining industry jumped 5.8 percent, compared with a 0.3-percent rise in August. Prices received by the industries for oil and gas operations support activities, bituminous coal underground mining, and construction sand and gravel mining also advanced at a quicker rate in September than they did a month earlier. The index for the gold ore mining industry turned up, after falling in August. For the 3 months ended September 2004, the Producer Price Index for the Net Output of Total Mining Industries declined at an annual rate of 12.4 percent, compared with a 60.7-percent rate of increase for the preceding quarter. In September 2004, this index was 148.8 (December 1984=100), 19.3 percent above its year-ago level.

Manufacturing. The Producer Price Index for the Net Output of Total Manufacturing Industries climbed 0.3 percent in September, following a 0.2-percent gain in August. In September, manufacturers of chemicals, petroleum and coal products, plastics and rubber products, primary metals, nonmetallic mineral products, electrical equipment and appliances, and paper products collected higher prices. On the other hand, prices received by food manufacturers, textile mills, and beverage and tobacco product makers fell in September. From June to September 2004, the Producer Price Index for the Net Output of Total Manufacturing Industries increased at an annual rate of 3.1 percent, after rising at a 7.9-percent rate from March to June. In September 2004, this index was 144.1 (December 1984=100), 5.1 percent above its year-ago level.

Services. Among services industries, prices received by the scheduled passenger air transportation industry dropped 3.4 percent in September, following a 1.4-percent advance in August. The industry indexes for investment bankers and securities dealers, lessors of nonresidential buildings (excluding miniwarehouses), wired telecommunications carriers, casino hotels, and passenger car rental also turned down in September, after rising a month earlier. Prices received by hotels (excluding casino hotels) and motels fell at a quicker pace than they did in August. By contrast, the industry index for securities brokerages increased 0.7 percent in September, compared with a 3.3-percent decrease in the prior month. Prices received by general medical and surgical hospitals and television broadcasters also turned up, following August declines, while the industry index for portfolio managers rose at a faster rate in September than it did in the preceding month.

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