The Producer Price Index for Finished Goods rose 1.4 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported on February 18. This increase followed a 0.4-percent advance in December and a 1.5-percent rise in November. In January, at the earlier stages of processing, prices received by manufacturers of intermediate goods climbed 1.7 percent, and the crude goods index jumped 9.6 percent. On an unadjusted basis, prices for finished goods moved up 4.6 percent for the 12 months ended January 2010, their third consecutive 12-month increase.
Stage-of-Processing Analysis
Finished goods
About three-fourths of the broad-based January advance in the finished goods index can be traced to higher prices for energy goods, which jumped 5.1 percent. The indexes for finished goods less foods and energy and for finished consumer foods also contributed to the finished goods increase, rising 0.3 percent and 0.4 percent, respectively.
Finished energy: The index for finished energy goods rose 5.1 percent in January, its fourth consecutive monthly increase. About two-thirds of the January advance can be attributed to an 11.5-percent jump in gasoline prices. Increases in the indexes for liquefied petroleum gas and home heating oil also were major factors in the finished energy goods rise.
Finished core: The index for finished goods less foods and energy moved up 0.3 percent in January after no change in December. Leading this advance, the index for light motor trucks rose 1.9 percent. Higher prices for pharmaceutical preparations also contributed to the increase in the finished core index.
Finished foods: The index for finished consumer foods moved up 0.4 percent in January, its fourth consecutive monthly advance. A major factor in the January rise was a 3.0-percent increase in meat prices.
Intermediate goods
The Producer Price Index for Intermediate Materials, Supplies and Components climbed 1.7 percent in January, its largest increase since a similar 1.7-percent advance in August 2009. Accounting for about three-fourths of the January rise, prices for intermediate energy goods jumped 6.9 percent. The index for intermediate materials less foods and energy also contributed to this advance, increasing 0.5 percent. By contrast, prices for intermediate foods and feeds fell 0.3 percent. On a 12-month basis, prices for intermediate goods moved up 4.6 percent, the second consecutive month of year-over-year increases.
Intermediate energy: The index for intermediate energy goods rose 6.9 percent in January, the largest increase since a 9.6-percent jump in November 2007. A major factor in the January advance was a 20.4-percent surge in diesel fuel prices. The indexes for gasoline and jet fuel also contributed significantly to higher intermediate energy goods prices.
Intermediate core: The index for intermediate materials less foods and energy moved up 0.5 percent, its eighth consecutive monthly increase. Nearly half of the January advance can be attributed to a 3.4-percent rise in basic organic chemical prices. An increase in the steel pipe and tube index also was a factor in the intermediate core advance.
Intermediate foods: The index for intermediate foods and feeds fell 0.3 percent, the first decline in six months. This decrease was led by the index for corn, cottonseed, and soybean cake and meal, which dropped 7.5 percent.
Crude goods
The Producer Price Index for Crude Materials for Further Processing climbed 9.6 percent in January. For the three-month period ending in January, crude material prices rose 16.1 percent, accelerating from an 8.5-percent increase for the three months ended October 2009. In January, about three-quarters of the broad-based monthly advance is attributable to a 16.8-percent jump in prices for crude energy materials. Also contributing to the January increase, in roughly equal proportions, the index for crude non-food materials less energy rose 6.6 percent and prices for crude foodstuffs and feedstuffs moved up 3.2 percent.
Crude energy: The index for crude energy materials jumped 16.8 percent in January. From October through January, prices for crude energy materials climbed 27.5 percent, following a 9.4-percent gain for the 3 months ended October 2009. Two-thirds of the monthly January increase can be traced to a 25.5-percent surge in the natural gas index. Higher crude petroleum prices also contributed to the rise in the index for crude energy materials.
Crude core: The index for crude nonfood materials less energy advanced 6.6 percent in January. For the three months ending in January, crude core prices moved up 10.2 percent, compared with a 12.1-percent rise for the three months ended October 2009. Over half of January's over-the-month increase is attributable to a 17.3-percent jump in the index for iron and steel scrap. Higher prices for non-ferrous scrap and wastepaper also were factors in the January increase for the crude core index.
Crude foods: The index for crude foodstuffs and feedstuffs moved up 3.2 percent in January. For the three-month period ending in January, prices for crude foodstuffs and feedstuffs rose 7.9 percent, after advancing 5.1 percent for the three months ended October 2009. Most of the January increase can be traced to a 5.8-percent rise in the index for slaughter livestock.