Economic News Release

Transmission of material in this release is embargoed until                          USDL-10-0066
8:30 a.m. (EST), Wednesday, January 20, 2010

Technical information:      (202) 691-7705  *  ppi-info@bls.gov  *  www.bls.gov/ppi
Media contact:              (202) 691-5902  *  PressOffice@bls.gov  


                              PRODUCER PRICE INDEXES - DECEMBER 2009


The Producer Price Index for Finished Goods moved up 0.2 percent in December, seasonally 
adjusted, the U.S. Bureau of Labor Statistics reported today. This rise followed a 1.8-percent 
advance in November and a 0.3-percent increase in October. At the earlier stages of processing, 
prices received by producers of intermediate goods rose 0.5 percent and the crude goods index 
moved up 1.0 percent. On an unadjusted basis, prices for finished goods advanced 4.4 percent in 
2009, after falling 0.9 percent in 2008. (See table A.)  

Stage of Processing Analysis

Finished goods

In December, the increase in the index for finished goods was driven by higher prices for 
consumer foods, which moved up 1.4 percent. By contrast, prices for energy goods declined 0.4 
percent. The index for finished goods less foods and energy was unchanged.

Finished foods:  The index for finished consumer foods rose 1.4 percent in December, its third 
consecutive monthly increase. Accounting for one-fifth of the December advance, the index for 
pork climbed 9.4 percent. Higher prices for processed poultry and fresh vegetables (except 
potatoes) also had a significant impact on the finished consumer foods index. (See table 2.)

Finished energy:  Prices for finished energy goods decreased 0.4 percent in December after 
increasing in each of the prior two months. Leading this decline, the gasoline index fell 3.2 
percent. Lower prices for residential natural gas also were a factor in the December finished 
energy goods decrease. 
      
Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components moved up 0.5 
percent in December, its fifth straight monthly increase. Accounting for about three-quarters of 
the broad-based December advance, prices for intermediate goods less foods and energy rose 0.5 
percent. Additionally, the indexes for intermediate foods and feeds and for intermediate energy 
goods increased 1.6 percent and 0.2 percent, respectively. In 2009, prices for intermediate goods 
climbed 3.0 percent, after falling 2.3 percent in 2008. (See table B.)  

Intermediate core:  The index for intermediate materials less foods and energy advanced 0.5 
percent in December, its second consecutive monthly increase. Prices for primary basic organic 
chemicals accounted for about a quarter of the December rise, moving up 3.1 percent. The 
indexes for plastic resins and materials and for nonferrous wire and cable also contributed to 
higher intermediate core prices. (See table 2.)

Intermediate foods:  The index for intermediate foods and feeds rose 1.6 percent in December, 
its second straight monthly advance. A major contributor to the December increase was a 4.3-
percent climb in prices for natural, processed, and imitation cheese. The index for pork also was a 
factor in rising prices for intermediate foods. 

Intermediate energy:  The intermediate energy goods index increased 0.2 percent in December, 
its third consecutive monthly advance. Contributing significantly to the December rise, prices for 
liquefied petroleum gas moved up 7.1 percent.

Crude goods

The Producer Price Index for Crude Materials for Further Processing increased 1.0 percent in 
December. For the 3-month period ending in December, crude material prices rose 12.6 percent 
after declining 2.4 percent in the 3 months ending in September. In December, monthly increases 
of 3.8 percent in the index for crude foodstuffs and feedstuffs and 5.0 percent for prices of 
crude nonfood materials less energy outweighed a 2.8-percent decrease in the index for crude 
energy materials. (See table B.)

Crude foods:  Prices for crude foodstuffs and feedstuffs rose 3.8 percent in December. This 
index jumped 12.1 percent in the most recent 3-month period compared with an 8.5-pecent 
decline in the previous 3-month period. Accounting for about forty percent of the monthly 
December increase, the fluid milk index moved up 10.8 percent.  Higher prices for slaughter 
barrows and gilts and for soybeans also contributed to the advance in the crude foodstuffs and 
feedstuffs index. (See table 2.) 

Crude core:  The index for crude nonfood materials less energy moved up 5.0 percent in 
December, and 4.8 percent for the 3 months ending in December. For the 3 months ending in 
September, crude core prices climbed 12.3 percent. In December, over half of the monthly 
increase can be attributed to a 12.7-percent jump in prices for iron and steel scrap. An advance in 
the nonferrous metal ores index also was a significant factor in the rise in prices for crude 
nonfood materials less energy. 

Services Analysis

Trade industries:  The Producer Price Index for the Net Output of Total Trade Industries 
declined 0.6 percent in December after rising 1.3 percent in November. (Trade indexes measure 
changes in margins received by wholesalers and retailers.) Accounting for about forty percent of 
the December decrease, margins received by clothing and clothing accessories stores fell 5.5 
percent. Lower margins received by warehouse clubs and supercenters, as well as by merchant 
wholesalers of nondurable goods, also contributed to the decline in the total trade industries 
index. In December 2009, the total trade industries index was unchanged from its year-ago level.

Transportation and warehousing industries:  The Producer Price Index for the Net Output of 
Total Transportation and Warehousing Industries climbed 0.5 percent in December, its third 
consecutive monthly increase. About eighty-five percent of the advance can be traced to a 2.1-
percent rise in prices received by the air transportation industry group. The indexes for courier 
services and transportation support activities also moved up in December. In 2009, the total 
transportation and warehousing industries index edged down 0.3 percent.

Traditional service industries:  The Producer Price Index for the Net Output of Total 
Traditional Service Industries advanced 0.2 percent in December after inching down 0.1 percent 
in November. Most of the December rise can be traced to a 1.4-percent jump in prices received 
by general medical and surgical hospitals. The industry indexes for portfolio managers and 
nursing care facilities also moved up in December. In 2009, the total traditional service industries 
index increased 1.2 percent.
____________
The Producer Price Index for January 2010 is scheduled to be released on Thursday, 
February 18, 2010 at 8:30 a.m. (EST).



          Recalculated Seasonal Adjustment Factors and Relative Importance Figures to be 
                                   Available on February 16, 2010

Each year with the release of PPI data for January, seasonal adjustment factors are recalculated 
to reflect price movements from the just-completed calendar year.  This routine annual calculation 
may result in revisions to seasonally adjusted indexes for the previous 5 years.  The following 
information will be available on February 16, 2010 (2 workdays prior to the release of PPI data 
for January 2010 on February 18):

*  Direct seasonal factors for commodity indexes for the year 2010,

*  Recalculated seasonal factors for the last 5 years (2005-2009) for the commodity indexes, 

*  Recalculated seasonal factors for the last 5 years (2005-2009) for the stage-of-processing 
indexes.

In addition to recalculated seasonal factors, December 2009 relative importance figures also will 
be available on February 16, 2010.
      
To obtain this information, visit the PPI website at http://www.bls.gov/ppi/ or call the Division 
of Industrial Prices and Price Indexes, Section of Index Analysis and Public Information at (202) 
691-7705.