Producer Price Index News Release text

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                                   PRODUCER PRICE INDEXES - JULY 2016


The Producer Price Index for final demand decreased 0.4 percent in July, seasonally adjusted, the 
U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.5 percent in June and 
0.4 percent in May. On an unadjusted basis, the final demand index moved down 0.2 percent for 
the 12 months ended in July. (See table A.)

In July, the decline in the final demand index was led by prices for final demand services, which 
fell 0.3 percent. The index for final demand goods decreased 0.4 percent.

Prices for final demand less foods, energy, and trade services were unchanged in July after rising 
0.3 percent in June. For the 12 months ended in July, the index for final demand less foods, 
energy, and trade services increased 0.8 percent.
	
Final Demand

Final demand services: The index for final demand services fell 0.3 percent in July, the largest 
decline since moving down 0.3 percent in March. The July decrease can be traced to margins for 
final demand trade services, which fell 1.3 percent. (Trade indexes measure changes in margins 
received by wholesalers and retailers.) Conversely, prices for final demand services less trade, 
transportation, and warehousing advanced 0.2 percent, and the index for final demand transportation 
and warehousing services increased 0.1 percent.

Product detail: Nearly 60 percent of the decrease in prices for final demand services is attributable to 
margins for apparel, jewelry, footwear, and accessories retailing, which fell 6.0 percent. The indexes 
for machinery and equipment wholesaling; health, beauty, and optical goods retailing; food retailing; 
loan services (partial); and automotive fuels and lubricants retailing also declined. In contrast, prices 
for traveler accommodation services climbed 3.9 percent. The indexes for chemicals and allied 
products wholesaling and for securities brokerage, dealing, investment advice, and related services 
also moved higher. (See table 4.)

Final demand goods: The index for final demand goods declined 0.4 percent in July following three 
straight increases. Almost half of the decrease can be traced to prices for final demand foods, which 
fell 1.1 percent. The index for final demand energy moved down 1.0 percent. Prices for final demand 
goods less foods and energy were unchanged.

Product detail: A major factor in the decrease in the index for final demand goods was prices for 
beef and veal, which fell 9.8 percent. Prices for gasoline, corn, motor vehicles, oilseeds, and iron and 
steel scrap also moved lower. Conversely, the index for utility natural gas advanced 4.3 percent. 
Prices for eggs for fresh use and nonferrous scrap also increased.

Table A. Monthly and 12-month percent changes in selected final demand price indexes, seasonally adjusted
Month Total
final
demand
Final
demand
less
foods,
energy,
and
trade
Final demand goods Final demand services Change
in final
demand
from 12
months
ago
(unadj.)
Change
in final
demand
less
foods,
energy,
and
trade
from 12
mo. ago
(unadj.)
Total Foods Energy Less
foods
and
energy
Total Trade Transportation
and
warehousing
Other

2015

July

0.1 0.1 -0.3 -0.8 -0.7 0.0 0.3 0.6 -0.1 0.1 -0.7 0.9

Aug.

-0.2 0.0 -0.5 0.2 -2.6 -0.2 -0.1 -0.4 -0.9 0.2 -1.0 0.6

Sept.

-0.5 -0.1 -1.0 -0.3 -5.3 0.0 -0.1 0.2 0.0 -0.2 -1.1 0.5

Oct.

-0.2 -0.2 -0.3 -0.7 -0.2 -0.3 -0.2 -0.2 -0.1 -0.1 -1.4 0.4

Nov.

0.1 0.1 -0.1 -0.3 0.1 -0.1 0.1 0.1 0.1 0.1 -1.3 0.2

Dec.

-0.1 0.1 -0.6 -0.9 -3.5 0.1 0.3 0.4 -0.8 0.2 -1.1 0.3

2016

Jan.

0.4 0.3 -0.5 0.9 -4.3 0.1 0.9 1.7 0.5 0.6 0.0 0.8

Feb.

-0.3 0.1 -0.7 0.1 -4.9 0.0 -0.1 -0.5 -0.3 0.1 0.1 0.9

Mar.(1)

-0.2 0.1 0.0 -1.4 1.1 0.2 -0.3 -0.7 -0.3 0.1 -0.1 0.9

Apr.(1)

0.2 0.2 0.5 -0.3 2.0 0.3 0.0 -0.4 -0.7 0.2 0.0 0.9

May

0.4 -0.1 0.7 0.3 2.8 0.3 0.2 1.2 -0.6 -0.2 -0.1 0.8

June

0.5 0.3 0.8 0.9 4.1 0.0 0.4 0.7 0.5 0.4 0.3 0.9

July

-0.4 0.0 -0.4 -1.1 -1.0 0.0 -0.3 -1.3 0.1 0.2 -0.2 0.8

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for March 2016 have been revised to reflect the availability of late reports and corrections by respondents.

Intermediate Demand by Commodity Type

Within intermediate demand in July, prices for processed goods increased 0.2 percent, the index for 
unprocessed goods fell 0.4 percent, and prices for services rose 0.3 percent. (See tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate 
demand moved up 0.2 percent in July, the third consecutive advance. Nearly three-quarters of the 
July increase can be traced to prices for processed energy goods, which rose 0.8 percent. The index 
for processed materials less foods and energy inched up 0.1 percent. Prices for processed foods and 
feeds were unchanged. For the 12 months ended in July, the index for processed goods for 
intermediate demand fell 3.7 percent.

Product detail: About half of the July advance in the index for processed goods for intermediate 
demand can be attributed to prices for utility natural gas, which increased 4.3 percent. The indexes 
for lubricating oil base stocks, residual fuels, industrial electric power, semifinished steel mill 
products, and natural cheese (except cottage cheese) also moved higher. Conversely, prices for 
gasoline dropped 6.6 percent. The indexes for primary basic organic chemicals and for beef and veal 
also decreased. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate 
demand declined 0.4 percent in July following four straight increases. Most of the decrease can be 
traced to a 3.6-percent drop in prices for unprocessed foodstuffs and feedstuffs.  The index for 
unprocessed nonfood materials less energy moved down 0.8 percent. In contrast, prices for 
unprocessed energy materials rose 5.0 percent. For the 12 months ended in July, the index for 
unprocessed goods for intermediate demand fell 8.7 percent.

Product detail: Leading the July decrease in prices for unprocessed goods for intermediate demand, 
the index for corn dropped 22.2 percent. Prices for crude petroleum, oilseeds, slaughter livestock, 
coal, and iron and steel scrap also moved lower. Conversely, the index for natural gas surged 40.3 
percent. Prices for nonferrous metal ores and raw milk also advanced.

Table B. Monthly and 12-month percent changes in selected intermediate demand price indexes for goods by commodity type, seasonally adjusted
Month Processed goods for intermediate demand Unprocessed goods for intermediate demand
Total Foods
and
feeds
Energy
goods
Less
foods
and
energy
Total,
change
from 12
months
ago
(unadj.)
Total Foodstuffs
and
feedstuffs
Energy
materials
Nonfood
materials
less
energy
Total,
change
from 12
months
ago
(unadj.)

2015

July

-0.3 0.2 -1.0 -0.1 -6.5 -3.5 -2.1 -6.3 -1.5 -23.2

Aug.

-0.8 -0.5 -2.2 -0.5 -7.2 -3.5 0.8 -8.4 -3.9 -23.7

Sept.

-1.3 -1.8 -4.3 -0.5 -8.3 -2.2 -4.3 -1.0 -0.2 -25.7

Oct.

-0.4 -0.7 -1.0 -0.3 -7.7 -1.3 -1.4 -0.4 -2.3 -24.0

Nov.

-0.5 -0.9 -1.1 -0.2 -7.2 -4.3 -2.3 -7.6 -3.7 -26.4

Dec.

-1.1 -2.0 -4.0 -0.4 -6.6 -3.9 -3.0 -7.2 -0.9 -25.3

2016

Jan.

-0.9 -0.7 -3.4 -0.4 -5.3 0.2 4.8 -6.0 -0.5 -17.5

Feb.

-0.9 0.6 -4.8 -0.3 -5.8 -1.9 -1.0 -5.7 0.6 -16.4

Mar.(1)

0.0 -0.6 0.5 0.0 -5.5 1.6 -0.8 3.9 2.5 -14.4

Apr.(1)

0.3 -0.4 1.3 0.1 -4.6 3.0 -2.8 12.5 3.1 -12.3

May

0.8 1.1 2.7 0.5 -4.6 1.3 0.1 0.9 4.2 -13.7

June

0.9 1.7 4.0 0.2 -4.1 2.8 0.4 8.5 -0.3 -11.4

July

0.2 0.0 0.8 0.1 -3.7 -0.4 -3.6 5.0 -0.8 -8.7

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for March 2016 have been revised to reflect the availability of late reports and corrections by respondents.

Services for intermediate demand: The index for services for intermediate demand increased 0.3 
percent in July following a 0.8-percent rise in June. Nearly 60 percent of the broad-based July 
advance can be traced to prices for services less trade, transportation, and warehousing for 
intermediate demand, which climbed 0.2 percent. The indexes for trade services for intermediate 
demand and for transportation and warehousing services for intermediate demand moved up 0.4 
percent and 0.3 percent, respectively. For the 12 months ended in July, the index for services for 
intermediate demand increased 1.6 percent.

Product detail: About three-fifths of the July increase in the index for services for intermediate 
demand is attributable to prices for securities brokerage, dealing, investment advice, and related 
services, which rose 1.9 percent. The indexes for chemicals and allied products wholesaling; 
television advertising time sales; metals, minerals, and ores wholesaling; deposit services (partial); 
and courier, messenger, and U.S. postal services also increased. In contrast, prices for loan services 
(partial) fell 1.5 percent. The indexes for machinery and equipment parts and supplies wholesaling 
and for passenger car rental also decreased.

Table C. Monthly and 12-month percent changes in selected intermediate demand price indexes for services by commodity type, seasonally adjusted
Month Services for intermediate demand
Total Trade Transportation
and
warehousing
Other Total, change
from 12 months
ago (unadj.)

2015

July

0.3 1.0 0.2 0.1 1.4

Aug.

0.2 -0.8 -0.3 0.6 1.6

Sept.

-0.5 -0.1 -0.2 -0.8 1.1

Oct.

-0.5 -0.3 -0.1 -0.6 0.2

Nov.

0.1 -0.4 0.1 0.2 0.4

Dec.

0.2 -1.0 -0.2 0.6 0.5

2016

Jan.

1.3 0.5 -0.5 1.9 1.5

Feb.

0.2 -0.3 0.0 0.3 1.9

Mar.(1)

0.0 -0.1 -0.1 0.1 1.6

Apr.(1)

-0.2 -0.4 -0.8 0.0 0.9

May

-0.2 0.3 0.0 -0.4 0.9

June

0.8 1.1 0.4 0.8 1.6

July

0.3 0.4 0.3 0.2 1.6

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for March 2016 have been revised to reflect the availability of late reports and corrections by respondents.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand was unchanged in July 
after increasing 0.7 percent in June. In July, prices for total services inputs to stage 4 intermediate 
demand rose 0.1 percent. Conversely, the index for total goods inputs fell 0.1 percent. Increases in 
the indexes for chemicals and allied products wholesaling; securities brokerage, dealing, investment 
advice, and related services; metals, minerals, and ores wholesaling; industrial electric power; and 
natural cheese (except cottage cheese) offset declines in the indexes for corn, machinery and 
equipment parts and supplies wholesaling, beef and veal, gasoline, and loan services (partial). For the 
12 months ended in July, the index for stage 4 intermediate demand moved down 0.5 percent.
Stage 3 intermediate demand: The index for stage 3 intermediate demand was unchanged in July 
after increasing 0.9 percent in June. In July, the index for total services inputs to stage 3 intermediate 
demand rose 0.3 percent. In contrast, prices for total goods inputs declined 0.3 percent. Increases in 
the indexes for securities brokerage, dealing, investment advice, and related services; raw milk; 
chemicals and allied products wholesaling; metals, minerals, and ores wholesaling; and courier, 
messenger, and U.S. postal services offset lower prices for gasoline, primary basic organic 
chemicals, slaughter livestock, agricultural chemicals and chemical products, and passenger car 
rental. For the 12 months ended in July, the index for stage 3 intermediate demand decreased 3.9 
percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand rose 0.7 percent in July, 
the fifth consecutive increase. In July, prices for total goods inputs to stage 2 intermediate demand 
moved up 1.1 percent. The index for total services inputs advanced 0.5 percent. Higher prices for 
natural gas; securities brokerage, dealing, investment advice, and related services; cable network 
advertising time sales; thermoplastic resins and materials; semifinished steel mill products; and 
lubricating oil base stocks outweighed decreases in the indexes for crude petroleum, oilseeds, and 
portfolio management. For the 12 months ended in July, the index for stage 2 intermediate demand 
fell 0.6 percent.

Stage 1 intermediate demand: The index for stage 1 intermediate demand was unchanged in July 
after increasing 1.2 percent in June. In July, the index for total services inputs to stage 1 intermediate 
demand advanced 0.3 percent. Conversely, prices for total goods inputs fell 0.1 percent. Increases in 
the indexes for chemicals and allied products wholesaling; natural gas; nonferrous scrap; diesel fuel; 
and securities brokerage, dealing, investment advice, and related services offset declining prices for 
primary basic organic chemicals, corn, iron and steel scrap, loan services (partial), and gasoline. For 
the 12 months ended in July, the index for stage 1 intermediate demand fell 3.2 percent.

Table D. Monthly percent changes in selected intermediate demand price indexes by production flow, seasonally adjusted
Month Stage 4 intermediate
demand
Stage 3 intermediate
demand
Stage 2 intermediate
demand
Stage 1 intermediate
demand
Total Goods
inputs
Services
inputs
Total Goods
inputs
Services
inputs
Total Goods
inputs
Services
inputs
Total Goods
inputs
Services
inputs

2015

July

0.0 -0.2 0.2 -0.4 -1.0 0.3 -0.7 -2.0 0.5 -0.2 -0.5 0.3

Aug.

-0.2 -0.4 0.2 -0.5 -1.1 0.2 -1.1 -3.0 0.3 -1.1 -1.7 -0.1

Sept.

-0.5 -0.8 -0.5 -1.8 -3.0 -0.4 -0.8 -1.2 -0.6 -1.5 -2.3 -0.6

Oct.

-0.3 -0.2 -0.5 -0.6 -1.0 -0.4 -0.4 -0.2 -0.6 -0.8 -0.9 -0.6

Nov.

-0.1 -0.2 0.2 -0.4 -0.7 0.0 -1.2 -2.9 0.0 -0.8 -1.4 0.0

Dec.

-0.4 -0.8 0.0 -0.9 -2.1 0.2 -0.5 -2.4 0.7 -1.4 -2.2 -0.4

2016

Jan.

0.3 -0.3 1.0 0.1 -0.5 0.9 -0.3 -2.3 1.3 0.1 -1.2 1.5

Feb.

-0.1 -0.4 0.1 -0.8 -2.0 0.3 -0.6 -2.0 0.2 -0.8 -1.4 0.1

Mar.(1)

-0.1 0.0 -0.1 0.1 0.1 0.0 0.4 0.7 0.2 0.4 1.0 -0.3

Apr.(1)

0.1 0.1 0.0 -0.3 -0.3 -0.3 1.2 3.2 -0.2 0.5 1.0 -0.1

May

0.1 0.4 -0.2 0.4 0.8 -0.1 0.7 1.9 -0.1 1.0 2.2 -0.6

June

0.7 0.7 0.8 0.9 1.2 0.7 1.5 2.9 0.6 1.2 1.2 1.2

July

0.0 -0.1 0.1 0.0 -0.3 0.3 0.7 1.1 0.5 0.0 -0.1 0.3

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for March 2016 have been revised to reflect the availability of late reports and corrections by respondents.

_____________
The Producer Price Index for August 2016 is scheduled to be released on Thursday, 
September, 15, 2016 at 8:30 a.m. (EDT).


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Last Modified Date: August 12, 2016