Producer Price Index News Release text

Transmission of material in this release is embargoed until                          USDL-15-0017
8:30 a.m. (EST), Thursday, January 15, 2015

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 2014


The Producer Price Index for final demand fell 0.3 percent in December, seasonally adjusted, the 
U.S. Bureau of Labor Statistics reported today. Final demand prices decreased 0.2 percent in 
November and advanced 0.2 percent in October. On an unadjusted basis, the index for final 
demand increased 1.1 percent in 2014 after rising 1.2 percent in 2013. (See table A.)

In December, the 0.3-percent decline in the final demand index can be traced to a 1.2-percent 
drop in prices for final demand goods. In contrast, the index for final demand services moved up 
0.2 percent.

Within intermediate demand, prices for processed goods fell 1.7 percent, the index for 
unprocessed goods moved down 5.0 percent, and prices for services were unchanged. (See tables 
B and C.)

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

2013

Dec.

0.0 0.4 -0.2 1.2 0.4 -0.2 -1.0 1.6 0.1 1.2

2014

Jan.

0.3 0.5 0.7 0.6 0.5 0.1 0.0 -0.9 0.2 1.3

Feb.

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

Mar.

0.3 0.1 1.3 -0.2 -0.1 0.4 0.6 0.4 0.3 1.6

Apr.

0.2 0.4 2.6 -0.2 0.2 0.0 -0.3 0.8 0.1 1.8

May

0.2 0.0 -0.3 0.0 0.1 0.3 0.8 0.5 0.0 2.1

June

0.2 0.5 -0.1 2.0 0.1 0.0 -0.5 0.5 0.2 1.8

July

0.5 -0.1 0.0 -0.9 0.2 0.6 1.9 0.4 0.0 1.9

Aug.(1)

-0.2 -0.3 -0.5 -1.1 0.0 0.0 -0.9 0.3 0.4 1.9

Sept.(1)

-0.2 -0.3 -0.7 -1.0 0.2 -0.2 -0.4 0.0 -0.1 1.6

Oct.

0.2 -0.4 1.0 -3.0 -0.1 0.5 1.5 -0.1 0.1 1.5

Nov.

-0.2 -0.7 -0.2 -3.1 -0.1 0.1 0.1 -0.8 0.1 1.4

Dec.

-0.3 -1.2 -0.4 -6.6 0.2 0.2 0.6 -0.1 0.2 1.1

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for August 2014 have been revised to reflect the availability of late reports and corrections by respondents.

Final Demand

(Final demand includes goods, services, and construction which are sold for personal 
consumption, capital investment, government purchases, and export. See table 4 for product 
detail.)

Final demand goods:  The index for final demand goods dropped 1.2 percent in December, the 
sixth consecutive decrease. Leading the December decline, prices for final demand energy fell 
6.6 percent. The index for final demand foods moved down 0.4 percent. Conversely, prices for 
final demand goods less foods and energy increased 0.2 percent. 

Product detail:  Over 70 percent of the December decrease in the index for final demand goods 
is attributable to prices for gasoline, which fell 14.5 percent. The indexes for diesel fuel, 
liquefied petroleum gas, home heating oil, meats, and primary basic organic chemicals also 
moved lower. In contrast, motor vehicle prices rose 0.6 percent. The indexes for residential 
natural gas and chicken eggs also advanced. (See table 4.)

Final demand services:  The index for final demand services increased 0.2 percent in December 
after inching up 0.1 percent in November. Over three-fourths of the December rise can be traced to 
margins for final demand trade services, which climbed 0.6 percent. (Trade indexes measure changes 
in margins received by wholesalers and retailers.) Prices for final demand services less trade, 
transportation, and warehousing advanced 0.2 percent. Conversely, the index for final demand 
transportation and warehousing services edged down 0.1 percent.

Product detail:  Leading the December rise in prices for final demand services, margins for fuels and 
lubricants retailing jumped 24.7 percent. The indexes for securities brokerage, dealing, investment 
advice, and related services; apparel, jewelry, footwear, and accessories retailing; outpatient care 
(partial); food and alcohol retailing; and portfolio management also moved higher. In contrast, prices 
for loan services (partial) fell 3.6 percent. The indexes for hospital inpatient care and for health, 
beauty, and optical goods retailing also declined.

Special grouping, Final demand less foods, energy, and trade:  The index for final demand less 
foods, energy, and trade services inched up 0.1 percent in December after no change in November. 
For the 12 months ended in December, prices for final demand less foods, energy, and trade services 
advanced 1.3 percent. (The index for final demand less foods, energy, and trade services represents 
about two-thirds of final demand.)

Special grouping, Finished goods:  Prices for finished goods fell 1.2 percent in December, the 
largest decrease since a 1.2-percent drop in July 2009. (The finished goods index represents about 
two-thirds of final demand goods, through the exclusion of the weight for government purchases and 
exports. The finished goods index represents about one-quarter of overall final demand.) Leading the 
December decline, prices for finished consumer energy goods decreased 6.1 percent. The index for 
finished consumer foods moved down 0.4 percent. Conversely, prices for finished goods less foods 
and energy increased 0.3 percent. Within finished goods, falling prices for gasoline, liquefied 
petroleum gas, home heating oil, diesel fuel, meats, and electronic computers outweighed advances 
in the indexes for motor vehicles, eggs for fresh use, and residential natural gas.

Intermediate Demand

(Intermediate demand includes goods, services, and maintenance and repair construction sold to 
businesses, excluding capital investment. BLS publishes two parallel treatments of intermediate 
demand, each constructed from the identical set of commodity price indexes. The first treatment 
organizes commodities according to commodity type, and the second organizes commodities using a 
stage-based, production flow model. See the technical note for more information.)

Intermediate Demand by Commodity Type

Processed goods for intermediate demand:  The index for processed goods for intermediate 
demand moved down 1.7 percent in December, the largest decrease since a 4.1-percent drop in 
December 2008. Over 70 percent of the broad-based decline in December 2014 was the result of 
prices for processed energy goods, which fell 5.7 percent. The indexes for processed materials less 
foods and energy and for processed foods and feeds moved down 0.6 percent and 0.8 percent, 
respectively. The index for processed goods for intermediate demand fell 2.2 percent in 2014 after 
inching up 0.1 percent in 2013. (See table B.)

Product detail:  In December, a major contributor to the decline in the index for processed goods for 
intermediate demand was the index for diesel fuel, which decreased 12.2 percent. Prices also fell for 
gasoline, primary basic organic chemicals, lubricating oil base stocks, jet fuel, and natural cheese 
(except cottage cheese). In contrast, the index for ethanol jumped 23.1 percent. Prices for utility 
natural gas and industrial electric power also moved up in December. (See table 5.)

Unprocessed goods for intermediate demand:  The index for unprocessed goods for 
intermediate demand fell 5.0 percent in December, the largest drop since a 5.6-percent decrease 
in February 2009. Accounting for over 60 percent of the broad-based decline in December, the 
index for unprocessed foodstuffs and feedstuffs dropped 6.9 percent. The indexes for 
unprocessed energy materials and unprocessed nonfood materials less energy moved down 4.7 
percent and 0.5 percent, respectively. The index for unprocessed goods for intermediate demand 
fell 8.1 percent in 2014 after declining 1.9 percent in 2013.

Product detail:  A major factor in the December drop in the index for unprocessed goods for 
intermediate demand was prices for slaughter livestock, which fell 10.9 percent. The indexes for 
crude petroleum, raw milk, slaughter poultry, carbon steel scrap, and coal also moved lower. 
Conversely, prices for natural gas jumped 19.7 percent in December. The indexes for corn and 
ungraded chicken eggs also moved higher.

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.)

2013

Dec.

0.4 0.7 1.2 0.1 0.1 2.2 -0.6 5.3 1.1 -1.9

2014

Jan.

0.7 1.2 1.5 0.4 0.5 0.9 3.6 -1.7 1.8 -0.5

Feb.

0.3 1.0 0.2 0.4 -0.2 5.1 0.6 13.4 -1.2 5.1

Mar.

0.0 1.3 -0.4 -0.2 0.7 -0.2 7.2 -6.4 -0.5 5.3

Apr.

0.0 3.1 -1.5 0.2 1.5 0.8 3.6 -2.5 1.6 6.5

May

0.0 -0.3 0.1 -0.1 1.4 -0.3 -2.5 1.9 -0.3 4.2

June

0.3 0.3 1.1 0.1 1.5 -0.9 -2.7 1.0 -1.4 3.7

July

0.1 -0.3 -0.2 0.4 1.6 -2.4 -0.5 -5.6 0.3 0.9

Aug.(1)

-0.1 -0.5 -1.2 0.2 1.4 -3.1 -3.0 -4.8 -0.7 -0.5

Sept.(1)

0.0 0.3 -0.7 0.1 1.3 0.3 2.1 -1.4 0.3 -0.2

Oct.

-0.9 -1.8 -3.2 -0.2 0.4 -2.4 1.0 -5.5 -2.9 -1.9

Nov.

-1.0 -0.3 -3.4 -0.5 -0.3 -1.3 0.9 -3.7 -1.6 -1.6

Dec.

-1.7 -0.8 -5.7 -0.6 -2.2 -5.0 -6.9 -4.7 -0.5 -8.1

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for August 2014 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 was 
unchanged in December after rising 0.3 percent in November. In December, a 0.3-percent 
increase in the index for trade services for intermediate demand offset a 0.1-percent decline in 
prices for services less trade, transportation, and warehousing for intermediate demand. The 
index for transportation and warehousing services for intermediate demand was unchanged. 
Prices for services for intermediate demand moved up 1.7 percent in 2014 after rising 1.0 percent 
in 2013. (See table C.) 

Product detail:  In December, among the indexes within services for intermediate demand, 
margins for parts and supplies for machinery and equipment wholesaling advanced 2.3 percent. 
The indexes for securities brokerage, dealing, investment advice, and related services; fuels and 
lubricants retailing; portfolio management; and staffing services also increased. In contrast, 
prices for business loans (partial) fell 5.6 percent. The indexes for broadcast and network 
television advertising time sales; metals, minerals, and ores wholesaling; passenger car rental; 
and air package delivery services (excluding USPS) 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.)

2013

Dec.

-0.2 -0.5 0.5 -0.2 1.0

2014

Jan.

0.3 -0.2 -0.3 0.6 1.1

Feb.

0.2 0.1 0.9 0.0 1.4

Mar.

0.4 0.3 0.2 0.4 1.7

Apr.

-0.2 -1.1 0.3 -0.1 1.0

May

-0.1 1.0 0.3 -0.4 1.5

June

0.2 -0.3 0.3 0.3 1.3

July

0.6 1.5 0.6 0.5 1.9

Aug.(1)

0.1 -0.3 0.2 0.1 1.7

Sept.(1)

-0.1 -0.3 0.0 -0.1 1.5

Oct.

0.1 0.8 0.0 0.1 1.6

Nov.

0.3 0.0 -0.3 0.4 1.5

Dec.

0.0 0.3 0.0 -0.1 1.7

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for August 2014 have been revised to reflect the availability of late reports and corrections by respondents.

Intermediate Demand by Production Flow

Stage 4 intermediate demand (The stage 4 intermediate demand index measures price 
changes for products purchased by industries that primarily produce output sold to final 
demand.):  The index for stage 4 intermediate demand moved down 0.4 percent in December, 
the largest decrease since a 0.4-percent decline in March 2013. In December, prices for total 
goods inputs to stage 4 intermediate demand fell 1.1 percent. Conversely, the index for total 
services inputs moved up 0.4 percent. (See table D.) Lower prices for gasoline, diesel fuel, 
business loans (partial), jet fuel, natural cheese (except cottage cheese), and meats outweighed 
increases in the indexes for securities brokerage, dealing, investment advice, and related 
services; parts and supplies for machinery and equipment wholesaling; and corn. (See table 6.) In 
2014, prices for stage 4 intermediate demand advanced 0.5 percent after increasing 0.8 percent in 
2013.

Stage 3 intermediate demand (The stage 3 intermediate demand index measures price 
changes for products purchased by industries that primarily produce output sold to industries 
classified in stage 4.):  Prices for stage 3 intermediate demand moved down 2.1 percent in 
December, the largest decrease since its inception in December 2009. In December, the index for 
total goods inputs to stage 3 intermediate demand fell 3.6 percent, and prices for total services 
inputs declined 0.2 percent. Lower prices for slaughter livestock, gasoline, raw milk, slaughter 
poultry, diesel fuel, and business loans (partial) outweighed advances in the indexes for natural 
gas, fuels and lubricants retailing, and ungraded chicken eggs. In 2014, the index for stage 3 
intermediate demand moved up 0.4 percent after advancing 0.5 percent in 2013.

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

2013

Dec.

0.1 0.4 -0.1 0.0 0.2 -0.1 1.4 2.8 -0.3 0.5 0.8 0.0

2014

Jan.

0.3 0.5 0.2 1.1 1.5 0.5 0.3 0.1 0.6 1.2 2.1 0.1

Feb.

0.2 0.1 0.1 0.4 0.6 0.4 3.8 6.3 0.3 0.0 -0.2 0.3

Mar.

0.3 0.2 0.6 1.0 1.6 0.2 -2.0 -3.5 0.0 -0.3 -1.0 0.5

Apr.

0.0 0.2 -0.3 0.3 0.6 -0.1 -0.4 -0.4 -0.3 -0.2 -0.1 -0.3

May

0.0 0.0 0.0 -0.4 -0.8 0.0 0.3 0.6 0.0 -0.3 -0.2 -0.3

June

0.2 0.2 0.2 0.1 0.1 0.2 0.2 0.2 0.1 0.3 0.4 0.4

July

0.4 0.0 0.6 0.6 0.7 0.5 -1.4 -2.8 0.6 0.9 0.8 1.0

Aug.(1)

-0.1 -0.1 0.0 -0.4 -1.0 0.2 -1.4 -2.5 0.0 0.0 -0.1 0.1

Sept.(1)

0.0 0.0 0.0 0.3 0.8 -0.3 -0.4 -0.5 -0.2 -0.3 -0.5 0.1

Oct.

-0.2 -0.5 0.1 -0.2 -0.4 0.2 -2.1 -4.0 0.5 -0.8 -1.5 0.2

Nov.

-0.3 -0.5 0.1 -0.4 -1.0 0.3 -1.1 -2.2 0.4 -1.4 -2.2 -0.2

Dec.

-0.4 -1.1 0.4 -2.1 -3.6 -0.2 -1.9 -3.1 -0.4 -1.5 -3.2 0.7

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for August 2014 have been revised to reflect the availability of late reports and corrections by respondents.

Stage 2 intermediate demand (The stage 2 intermediate demand index measures price 
changes for products purchased by industries that primarily produce output sold to industries 
classified in stage 3.):  The index for stage 2 intermediate demand decreased 1.9 percent in 
December, the sixth straight decline. In December, prices for total goods inputs to stage 2 
intermediate demand moved down 3.1 percent, and the index for total services inputs declined 
0.4 percent. Lower prices for crude petroleum, primary basic organic chemicals, liquefied 
petroleum gas, business loans (partial), broadcast and network television advertising time sales, 
and diesel fuel outweighed increases in the indexes for natural gas; ethanol; and securities 
brokerage, dealing, investment advice, and related services. In 2014, the index for stage 2 
intermediate demand fell 5.7 percent after declining 0.2 percent in 2013.

Stage 1 intermediate demand (The stage 1 intermediate demand index measures price 
changes for products purchased by industries that primarily produce output sold to industries 
classified in stage 2.):  Prices for stage 1 intermediate demand moved down 1.5 percent in 
December, the largest decrease since a 1.8-percent decline in June 2012. In December, the index 
for total goods inputs to stage 1 intermediate demand fell 3.2 percent. In contrast, the index for 
total services inputs moved up 0.7 percent. Falling prices for primary basic organic chemicals, 
gasoline, diesel fuel, lubricating oil base stocks, carbon steel scrap, and guestroom rental 
outweighed advances in the indexes for securities brokerage, dealing, investment advice, and 
related services; electric power; and portfolio management. In 2014, prices for stage 1 
intermediate demand moved down 2.0 percent after increasing 0.2 percent in 2013. 
_____________
The Producer Price Index for January 2015 is scheduled to be released on Wednesday, 
February 18, 2015 at 8:30 a.m. (EST).

                                         *****

    PPI Updates Commodity Weight Allocations for the Final Demand-Intermediate Demand 
                                Aggregation Structure

Effective with the release of data for January 2015 on February 18, 2015, the Bureau of Labor 
Statistics will update the weight allocations used to calculate the Producer Price Index (PPI) 
Final Demand-Intermediate Demand (FD-ID) indexes to more accurately reflect recent sales 
patterns. While PPI commodity index weights will continue to be based on shipment values from 
the 2007 economic census, the proportions of these weights allocated to the various FD-ID 
categories will change. The new allocations will be based primarily on data from the 2007 Input-
Output Accounts produced by the Bureau of Economic Analysis.

It is important to note that the allocation update will not change the PPI commodity classification 
system, reference base, the FD-ID aggregation structure, or historical index data. It may, 
however, result in significant shifts in the relative importance figures of commodity components 
that make up the FD-ID indexes.

Relative importance figures as of December 2014, which will detail this shift from 2002 to 2007 
input-output relationships, will be available on February 13, 2015 on the BLS website at 
www.bls.gov/ppi. This information also may be requested from the Division of Industrial Prices 
and Price Indexes, Section of Index Analysis and Public Information through e-mail to ppi-
info@bls.gov or by calling (202) 691-7705. For further information on this update, contact 
Jonathan Weinhagen at weinhagen.jonathan@bls.gov or (202) 691-7709.                         


                                         *****

     Recalculated Seasonal Adjustment Factors and Relative Importance Figures to be 
                             Available on February 13, 2015

Each year with the release of PPI data for January, seasonal adjustment factors and relative 
importance figures are recalculated to reflect price movements from the just-completed calendar 
year. The following seasonal information will be available on February 13, 2015 (2 workdays 
prior to the release of PPI data for January 2015 on February 18):

*  Direct seasonal factors for PPI commodity indexes for the year 2015,
*  Recalculated seasonal factors for the last 5 years (2010-2014) for PPI commodity indexes, 
*  Recalculated seasonal factors for the last 5 years (2010-2014) for PPI Final Demand-
   Intermediate Demand indexes, 
*  Recalculated seasonal data for the last 5 years (2010-2014) for Final Demand-Intermediate 
   Demand and commodity indexes. This revision to seasonally adjusted indexes for the 
   previous 5 years will be posted to the PPI database on the BLS website. 

In addition, the following relative importance tables as of December 2014 also will be available 
on February 13, 2015:  

*  Final demand by individual commodities
*  Final demand by component series
*  Individual commodities of intermediate demand by commodity type
*  Component series of intermediate demand by commodity type
*  Individual commodities of intermediate demand by production flow
*  Component series of intermediate demand by production flow
*  Commodities, all levels
*  Wherever-provided services and construction

To obtain this information, visit the PPI website at www.bls.gov/ppi, e-mail PPI at 
ppi-info@bls.gov, or call the Division of Industrial Prices and Price Indexes, Section of Index 
Analysis and Public Information at (202) 691-7705.                         




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Last Modified Date: January 15, 2015