Transmission of material in this release is embargoed until                          USDL-13-2195
8:30 a.m. (EST), Thursday, November 21, 2013

Technical information:      (202) 691-7705  *  ppi-info@bls.gov  *  www.bls.gov/ppi
Media contact:              (202) 691-5902  *  PressOffice@bls.gov                                    
           
                        
                            PRODUCER PRICE INDEXES - OCTOBER 2013


The Producer Price Index for finished goods declined 0.2 percent in October, seasonally 
adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods fell 0.1 
percent in September and rose 0.3 percent in August. At the earlier stages of processing, prices 
received by producers of intermediate goods declined 0.4 percent, and the crude goods index 
decreased 0.9 percent. On an unadjusted basis, prices for finished goods advanced 0.3 percent 
for the 12 months ended October 2013. (See table A.)

Stage-of-Processing Analysis

Finished goods

In October, the 0.2-percent decrease in the finished goods index is attributable to prices for 
finished energy goods, which fell 1.5 percent. By contrast, the indexes for finished consumer foods 
and for finished goods less foods and energy moved up 0.8 percent and 0.2 percent, respectively.

Finished energy:  Prices for finished energy goods moved down 1.5 percent in October, the first 
decline since a 2.5-percent drop in April 2013. Nearly all of the October decrease can be traced to 
the index for gasoline, which fell 3.8 percent. Lower prices for diesel fuel and residential natural 
gas also contributed to the decline in the index for finished energy goods. (See table 2.)

Finished foods:  In October, prices for finished consumer foods advanced 0.8 percent, the largest 
rise since a 0.9-percent jump in March 2013. Nearly sixty percent of the October increase can be 
traced to the index for beef and veal, which climbed 7.5 percent. Higher prices for fresh and dry 
vegetables also contributed to the advance in the finished consumer foods index. 

Finished core:  The index for finished goods less foods and energy rose 0.2 percent in October 
subsequent to a 0.1-percent increase in September. Leading the October advance, prices for 
passenger cars climbed 1.7 percent. By contrast, the index for light motor trucks edged down 0.1 
percent. (On a not seasonally adjusted basis, prices for passenger cars increased 3.8 percent and 
the index for light motor trucks moved up 4.2 percent.) In accordance with usual practice, most 
new-model-year passenger cars and light motor trucks were introduced into the PPI in October (see 
Report on Quality Changes for 2014 Model Vehicles, at www.bls.gov/web/ppi/ppimotveh.htm).

Intermediate goods

The Producer Price Index for intermediate materials, supplies, and components fell 0.4 percent in 
October, the largest decline since a 0.6-percent drop in April 2013. Accounting for two-thirds of 
the broad-based October decrease, prices for intermediate energy goods moved down 1.2 percent. 
The index for intermediate foods and feeds fell 1.5 percent, and prices for intermediate materials 
less foods and energy declined 0.1 percent. For the 12 months ended in October, the intermediate 
goods index moved down 0.8 percent, the largest decrease since a 1.1-percent drop for the 12 
months ended April 2013. (See table B.)

Intermediate energy:  The index for intermediate energy goods declined 1.2 percent in October 
following five consecutive advances. A major factor in the decrease was prices for diesel fuel, 
which fell 2.2 percent. Lower prices for gasoline and commercial electric power also contributed to 
the decline in the index for intermediate energy goods. (See table 2.)

Intermediate foods:  The index for intermediate foods and feeds fell 1.5 percent in October after 
rising 0.3 percent in September. Leading the decrease were prices for prepared animal feeds, which 
dropped 6.7 percent. A decline in the index for pork also contributed to lower prices for 
intermediate foods and feeds.

Intermediate core:  Prices for intermediate materials less foods and energy inched down 0.1 
percent in October following a 0.1-percent rise in September. The decline was led by the index for 
industrial chemicals, which decreased 1.2 percent.

Crude goods

The Producer Price Index for crude materials for further processing declined 0.9 percent in 
October. For the 3 months ended in October, prices for crude goods fell 3.1 percent following a 
3.6-percent rise for the 3 months ended in July. The monthly decrease in October was led by the 
index for crude energy materials, which moved down 2.9 percent. Lower prices for crude 
nonfood materials less energy also contributed to the decline, falling 0.5 percent. By contrast, 
the index for crude foodstuffs and feedstuffs increased 1.2 percent. (See table B.)

Crude energy:  The index for crude energy materials fell 2.9 percent in October. From July to 
October, prices for crude energy materials moved down 3.5 percent after climbing 9.7 percent 
from April to July. In October, most of the monthly decrease can be traced to a 4.2-percent drop 
in the crude petroleum index. Lower prices for coal also were a factor in the decline in the 
index for crude energy materials. (See table 2.)

Crude core:  The index for crude nonfood materials less energy moved down 0.5 percent in 
October. For the 3 months ended in October, prices for crude nonfood materials less energy fell 
1.8 percent compared with a 2.0-percent decline for the 3 months ended in July. The monthly 
decrease in October was led by the corn index, which dropped 8.5 percent. Lower prices for 
gold ores also contributed significantly to the decline in the crude core index. 

Crude foods:  The index for crude foodstuffs and feedstuffs climbed 1.2 percent in October. 
From July to October, prices for crude foodstuffs and feedstuffs fell 3.4 percent after moving 
up 0.6 percent from April to July. The monthly increase in October was primarily the result of a 
5.5-percent rise in the slaughter cattle index. Higher prices for slaughter poultry also were a 
factor in the advance in the crude foods index.

Services Analysis

Trade industries:  The Producer Price Index for the net output of total trade industries moved 
up 1.2 percent in October, the largest rise since a similar 1.2-percent advance in October 2012. 
(Trade indexes measure changes in margins received by wholesalers and retailers.) Accounting 
for over a quarter of the October 2013 increase, margins received by family clothing stores 
jumped 20.0 percent. Higher margins received by merchant wholesalers of both durable and 
nondurable goods also contributed to the increase in the total trade industries index.

Transportation and warehousing industries:  The Producer Price Index for the net output of 
transportation and warehousing industries rose 0.4 percent in October after a 0.9-percent 
decrease in September. Leading the advance, prices received by the air transportation industry 
group moved up 2.1 percent. Higher prices received by the industries for line-haul railroads and 
local specialized freight trucking of new goods also were factors in the increase in the 
transportation and warehousing industries index.

Services less trade, transportation, and warehousing:  The Producer Price Index for the net 
output of services less trade, transportation, and warehousing edged up 0.1 percent in October 
compared with a 0.3-percent decline a month earlier. Leading the increase, prices received by 
portfolio managers rose 5.4 percent. Higher prices received by the industries for passenger car 
rental and for general medical and surgical hospitals also contributed to the advance in the 
index for services less trade, transportation, and warehousing.
____________
The Producer Price Index for November 2013 is scheduled to be released on Friday, 
December 13, 2013 at 8:30 a.m. (EST).

                                        *****

                    Effect of Partial Government Shutdown on PPI Data
 
The October partial Federal government shutdown delayed the transmission of October 
Producer Price Index (PPI) pricing surveys by about one week. This delay affected the 
collection, processing, and analysis of October data, resulting in a delay in the October data 
release by a week. The response rate for the October PPI survey was within the normal range. 
The delay is expected to have no effect on November PPI data, which will be released as 
originally scheduled on December 13.

                                        *****


 
      Producer Price Index to Transition from Stage-of-Processing to Final Demand-
                       Intermediate Demand Aggregation System

Effective with the January 2014 PPI data release in February 2014, BLS will transition from the 
Stage of Processing (SOP) to the Final Demand-Intermediate Demand (FD-ID) aggregation system. 
This shift will result in significant changes to the PPI news release, as well as other documents 
available from PPI. The transition to the FD-ID system is the culmination of a long-standing PPI 
objective to improve the current SOP aggregation system by incorporating PPIs for services, 
construction, government purchases, and exports. In comparison to the SOP system, the FD-ID 
system more than doubles current PPI coverage of the United States economy to over 75 percent 
of in-scope domestic production. The FD-ID system was introduced as a set of experimental 
indexes in January 2011. Nearly all new FD-ID goods, services, and construction indexes provide 
historical data back to either November 2009 or April 2010, while the indexes for goods that 
correspond with the historical SOP indexes go back to the 1970s or earlier.  

The FD-ID system will highlight the index for final demand, which measures price changes for 
goods, services, and construction sold to final demand: personal consumption, capital investment, 
government purchases, and exports. The composition of products in the final demand price index 
differs from that of the finished goods index in two major respects. First, it includes government 
purchases and exports. Second, it includes services and construction, which are not reflected in 
finished goods.

The FD-ID system also includes two separate parallel treatments of intermediate demand:  price 
changes for goods, services, and construction sold to business as inputs to production. The first 
treatment, intermediate demand by commodity type, measures price changes based on similarity of 
product and includes aggregate indexes for processed goods for intermediate demand, unprocessed 
goods for intermediate demand, and services for intermediate demand.  

The second treatment, intermediate demand by production flow, is a stage-based system of price 
indexes, where price changes for goods, services, and construction can be studied as they move 
through the production chain of the economy to final demand. This treatment includes four stages 
of intermediate demand, which were established to maximize forward flow of production through 
the economy, while minimizing backflow of production.

These FD-ID indexes are constructed using PPI commodity indexes for goods, services, and 
construction, where products are assigned to various categories according to buyer type and level 
of fabrication. A product purchased by different classes of buyers is assigned to multiple FD-ID 
aggregates, with unique weights allocated to each aggregate based on the product's value of 
shipments to each buyer type. 

To assist with the transition to the FD-ID system, PPI will provide, on a monthly basis, a version 
of the PPI news release based on the FD-ID model, starting with the publication of July 2013 data 
in August. The document will be labeled "Experimental" through the December release in January 
2014 and will be posted to the PPI Experimental Aggregation webpage about two weeks after each 
month's scheduled PPI release. That webpage, 
http://www.bls.gov/ppi/experimentalaggregation.htm, also contains detailed methodological 
information for the FD-ID aggregation system. With the publication of January 2014 data in 
February 2014, the FD-ID version of the PPI news release will become the official news release 
document of record.

Further information also is available from the PPI Section of Index Analysis and Public 
information, at ppi-info@bls.gov or (202) 691-7705.  

                                              *****


    Recalculated Seasonal Adjustment Factors and Relative Importance Figures to be Available on 
                                         February 14, 2014

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. In accordance with the transition to the Final Demand-Intermediate Demand aggregation 
system, aggregate seasonal factor and relative importance data will be published on this new basis. 
The following seasonal adjustment information will be available on February 14, 2014 (2 
workdays prior to the release of PPI data for January 2014 on February 19):

*  Direct seasonal factors for commodity indexes for the year 2014,
*  Recalculated seasonal factors for the last 5 years (2009-2013) for the commodity indexes, 
*  Recalculated seasonal factors for the last 5 years (2009-2013) for the final demand-
   intermediate demand indexes.

This routine recalculation may result in revisions to seasonally adjusted indexes for the previous 5 
years, which also will be posted on BLS website.  In addition, the following relative importance 
tables for December 2013 will be available on February 14, 2014:  

*  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 or call the Division of 
Industrial Prices and Price Indexes, Section of Index Analysis and Public Information at (202) 691-
7705.                         

Technical Note

               Brief Explanation of Producer Price Indexes

     The Producer Price Index (PPI) of the Bureau of Labor Statistics (BLS)
is a family of indexes that measure the average change over time in the
prices received by domestic producers of goods and services.  PPIs measure
price change from the perspective of the seller.  This contrasts with other
measures, such as the Consumer Price Index (CPI).  CPIs measure price
change from the purchaser's perspective.  Sellers' and purchasers' prices
can differ due to government subsidies, sales and excise taxes, and
distribution costs.

     More than 9,000 PPIs for individual products and groups of products
are released each month.  PPIs are available for the products of virtually
every industry in the mining and manufacturing sectors of the U.S. economy.
New PPIs are gradually being introduced for the products of industries in
the construction, trade, finance, and services sectors of the economy.

     More than 100,000 price quotations per month are organized into three
sets of PPIs:  (1) Stage-of-processing indexes, (2) commodity indexes, and
(3) indexes for the net output of industries and their products.  The stage-
of-processing structure organizes products by class of buyer and degree of
fabrication.  The commodity structure organizes products by similarity of
end use or material composition.  The entire output of various industries
is sampled to derive price indexes for the net output of industries and
their products.
     
                        Stage-of-Processing Indexes
                                     
     Within the stage-of-processing system, finished goods are commodities
that will not undergo further processing and are ready for sale to the
final-demand user, either an individual consumer or business firm.
Consumer foods include unprocessed foods such as eggs and fresh vegetables,
as well as processed foods such as bakery products and meats.  Other
finished consumer goods include durable goods such as automobiles,
household furniture, and appliances, as well as nondurable goods such as
apparel and home heating oil.  Capital equipment includes durable goods
such as heavy motor trucks, tractors, and machine tools.

     The stage-of-processing category for intermediate materials, supplies,
and components consists partly of commodities that have been processed but
require further processing.  Examples of such semifinished goods include
flour, cotton yarn, steel mill products, and lumber.  The intermediate
goods category also encompasses nondurable, physically complete items
purchased by business firms as inputs for their operations.  Examples
include diesel fuel, belts and belting, paper boxes, and fertilizers.

     Crude materials for further processing are products entering the
market for the first time that have not been manufactured or fabricated and
that are not sold directly to consumers.  Crude foodstuffs and feedstuffs
include items such as grains and livestock.  Examples of crude nonfood
materials include raw cotton, crude petroleum, coal, hides and skins, and
iron and steel scrap.
                                     
                             Commodity Indexes

     The commodity classification structure of the PPI organizes goods and 
services by similarity of material composition or end use, disregarding 
their industry of origin.  Table 6 of the PPI Detailed Report includes data 
for commodity indexes, organized in a hierarchal structure, including major 
commodity groupings (two-digit commodity codes),  subgroups (three-digit 
codes), product classes (four-digit codes), subproduct classes (five- and 
six-digit codes), item groupings (seven-digit codes) and individual items 
(eight-, nine-, and ten-digit codes). 
                                     
                     Industry Net-Output Price Indexes
                                     
     PPIs for the net output of industries and their products are grouped
according to the North American Industry Classification System (NAICS).
Prior to the release of January 2004, industry-based PPIs were published
according to the Standard Industrial Classification (SIC) system.  Industry
price indexes are compatible with other economic time series organized by
industry, such as data on employment, wages, and productivity.  Table 5 of
the PPI Detailed Report includes data for NAICS industries and industry
groups (3-, 4-, 5-, and 6-digit codes), Census product classes (7- and 8-
digit codes), products (9-digit codes), and more detailed subproducts (11-
digit codes), and, for some industries, indexes for other sources of
revenue.

     Indexes may represent one of three kinds of product categories.  Every
industry has primary product indexes to show changes in prices received by
establishments classified in the industry for products made primarily, but
not necessarily exclusively, by that industry.  The industry classification
of an establishment is determined by which products make up a plurality of
its total shipment value.  In addition, most industries have secondary
product indexes that show changes in prices received by establishments
classified in the industry for products chiefly made in some other
industry.  Finally, some industries have miscellaneous receipts indexes to
show price changes in other sources of revenue received by establishments
within the industry that are not derived from sales of their products-for
example, resales of purchased materials, or revenues from parking lots
owned by a manufacturing plant.
                                     
                              Data Collection
                                     
     PPIs are based on selling prices reported by establishments of all
sizes selected by probability sampling, with the probability of selection
proportionate to size.  Individual items and transaction terms from these
firms also are chosen by probability proportionate to size.  BLS strongly
encourages cooperating companies to supply actual transaction prices at the
time of shipment to minimize the use of list prices.  Prices submitted by
survey respondents are effective on the Tuesday of the week containing the
13th day of the month.  This survey is conducted via mail, fax, and the Internet.

     Price data are provided on a voluntary and confidential basis; only
sworn BLS employees are allowed access to individual company price reports.
BLS publishes price indexes instead of actual prices.  All PPIs are subject
to revision 4 months after original publication to reflect the availability
of late reports and corrections by respondents.

     BLS periodically updates the PPI sample of survey respondents to
better reflect current conditions when the structure, membership,
technology, or product mix of an industry shifts significantly and to
spread reporting burden among smaller firms.  Results of these resampling
efforts are incorporated into the PPI with the release of data for January
and July.

     As part of an ongoing effort to expand coverage to sectors of the
economy other than mining and manufacturing, an increasing number of
service sector industries have been introduced into the PPI.  The following
list of industries introduced since the mid-1990s includes the month and year in which
an article describing the industry's content appeared in the PPI Detailed
Report.

                                                                      PPI
                                                                      Detailed
                                                                      Report
              Title                                           Code    Issue

                                                              SIC             
Wireless telecommunications...................................4812    July 1999
Telephone communications, except radio telephone..............4813    July 1995
Television broadcasting.......................................4833    July 2002
Grocery stores................................................5411    July 2000
Meat and fish (seafood) markets...............................5421    July 2000
Fruit and vegetable markets...................................5431    July 2000
Candy, nut, and confectionery stores..........................5441    July 2000
Retail bakeries...............................................5461    July 2000
Miscellaneous food stores.....................................5499    July 2000
New car dealers...............................................5511    July 2000
Gasoline service stations.....................................5541    January 2002
Boat dealers..................................................5551    January 2002
Recreational vehicle dealers..................................5561    January 2002
Miscellaneous retail..........................................59      January 2001
Security brokers, dealers, and investment bankers.............6211    January 2001
Investment advice.............................................6282    January 2003
Life insurance carriers.......................................6311    January 1999
Property and casualty insurance...............................6331    July 1998
Insurance agencies and brokerages.............................6412    January 2003
Operators and lessors of nonresidential buildings.............6512    January 1996
Real estate agents and managers...............................6531    January 1996
Prepackaged software..........................................7372    January 1998
Data processing services......................................7374    January 2002
Home health care services.....................................8082    January 1997
Legal services................................................8111    January 1997
Engineering design, analysis, and consulting services.........8711    January 1997
Architectural design, analysis, and consulting services.......8712    January 1997
Premiums for property and casualty insurance..................9331    July 1998
                                                         
                                                              NAICS            
New industrial building construction..........................236211  January 2008
New warehouse building construction...........................236221  July 2005
New school construction.......................................236222  July 2006
New office construction.......................................236223  January 2007
New health care building construction.........................236224  January 2013
Concrete contractors, nonresidential building work............23811X  July 2008
Roofing contractors, nonresidential building work.............23816X  July 2008
Electrical contractors, nonresidential building work..........23821X  July 2008
Plumbing / HVAC contractors, nonresidential building work.....23822X  July 2008
Merchant wholesalers, durable goods...........................423     July 2005
Merchant wholesalers, nondurable goods........................424     July 2005
Wholesale trade agents and brokers............................425120  July 2005
Furniture and home furnishings stores.........................442     January 2004
Electronics and appliance stores..............................443     January 2004
Building  material and garden equipment and supplies dealers..444     January 2004
Clothing and clothing accessories stores......................448     January 2004
Sporting goods, hobby, book, and music stores.................451     January 2004
General merchandise stores....................................452     January 2004
Miscellaneous store retailers.................................453     January 2004
Internet service providers....................................518111  July 2005
Internet publishing and web search portals....................519130  January 2010
Commercial banking............................................522110  January 2005
Savings institutions..........................................522120  January 2005
Direct health and medical insurance carriers..................524114  July 2004
Construction, mining, and forestry machinery and equipment 
rental and leasing............................................532412  January 2005
Management consulting services................................541610  January 2007
Security guards and patrol services...........................561612  July 2005
Computer training.............................................611420  July 2007
Offices of dentists...........................................621210  January 2011
Blood and organ banks.........................................621991  January 2007
Amusement and theme parks.....................................713110  July 2006
Golf courses and country clubs................................713910  July 2006
Fitness and recreational sports centers.......................713940  July 2005
Commercial machinery repair and maintenance...................811310  July 2007
                                     
                                  Weights

     Weights for most traditional commodity groupings of the PPI, as well
as weights for commodity-based aggregate indexes calculated using traditional 
commodity groupings, such as stage-of-processing indexes, currently reflect
2007 values of shipments as reported in the Census of Manufactures and 
other sources. From January 2007 through December 2011, PPI weights were 
derived from 2002 shipment values.  Industry indexes now are calculated 
under the 2012 NAICS structure utilizing with 2007 value of shipment weights and 
2002 net output ratios.  The periodic update of the value weights used to calculate 
the PPI is done to more accurately reflect changes in production and marketing 
patterns in the economy.  Net output values of shipments are used as weights for 
industry indexes.  Net output values refer to the value of shipments from 
establishments within the industry to buyers outside the industry.  However, 
weights for commodity price indexes are based on gross shipment values, including 
values of shipments between establishments within the same industry.  As a result, 
broad commodity grouping indexes, such as the PPI for All Commodities (which is 
comprised of major commodity groupings 01 through 15), are affected by the multiple 
counting of price change at successive stages of processing, which can lead to 
exaggerated or misleading signals about inflation.  Stage-of-processing indexes 
partially correct for this defect, but industry indexes consistently correct for 
this at all levels of aggregation.  Therefore, industry and stage-of-processing
indexes are more appropriate than broad commodity groupings for economic
analysis of general price trends.
     
                        Price Index Reference Base
                                     
     Effective with publication of January 1988 data, many important PPI
series (including stage-of-processing groupings and most commodity groups
and individual items) were placed on a new reference base, 1982 = 100.
From 1971 through 1987, the standard reference base for most PPI series was
1967 = 100.  Except for rounding differences, the shift to the new
reference base did not alter any previously published percent changes for
affected PPI series.  (See "Calculating Index Changes," below.)  The 1982
reference base is not used for commodity indexes with a base later than
December 1981 or for industry net output indexes and their products.

     For further information on the underlying concepts and methodology of
the Producer Price Index, see chapter 14, "Producer Prices," in BLS
Handbook of Methods (July 2010).  This document can be
downloaded from the BLS Web site at (www.bls.gov/opub/hom/homch14.htm).

                         Calculating Index Changes
                                     
     Each PPI measures price changes from a reference period that equals
100.0.  An increase of 5.5 percent from the reference period in the
Finished Goods Price Index, for example, is shown as 105.5.  This change
also can be expressed in dollars, as follows:  prices received by domestic
producers of a sample of finished goods have risen from $100 in 1982 to
$105.50.  Likewise, a current index of 90.0 would indicate that prices
received by producers of finished goods are 10 percent lower than they were
in 1982.

     Movements of price indexes from one month to another are usually
expressed as percent changes, rather than as changes in index points.
Index point changes are affected by the level of the index in relation to
its base period, whereas percent changes are not.  The following example
shows the computation of index point and percent changes.
     
          Index point change
     Finished Goods Price Index        107.5
     Less previous index               104.0
     Equals index point change           3.5

          Index percent change
     Index point change 3.5
     Divided by the previous index     104.0
     Equals                              0.034
     Result multiplied by 100            0.034 x 100
     Equals percent change               3.4


                  Seasonally Adjusted and Unadjusted Data

     Because price data are used for different purposes by different
groups, BLS publishes seasonally adjusted and unadjusted changes each
month.  Seasonally adjusted data are preferred for analyzing general price
trends in the economy because these data eliminate the effect of changes
that normally occur at about the same time, and in about the same
magnitude, every year-such as price movements resulting from normal weather
patterns, regular production and marketing cycles, model changeovers,
seasonal discounts, and holidays.  For these reasons, seasonally adjusted
data more clearly reveal underlying cyclical trends.  Unadjusted data are
of primary interest to users who need information that can be related to
actual dollar values of transactions.  Individuals requiring this
information include marketing specialists, purchasing agents, budget and
cost analysts, contract specialists, and commodity traders.  It is the
unadjusted data that are generally cited when escalating long-term
contracts such as purchasing agreements or real estate leases.  For more
information, see Escalation and Producer Price Indexes: A Guide for
Contracting Parties, BLS Report 807, September 1991, on the Web at
(www.bls.gov/ppi/ppiescalation.htm).  

     In 1998, the PPI implemented the X-12-ARIMA Seasonal Adjustment
Method; prior to that year, the PPI employed the X-11 method.  Each year,
the seasonal status of most commodity indexes is reevaluated to reflect
more recent price behavior.  Industry net output indexes are not seasonally
adjusted.  For time series that exhibit seasonal pricing patterns, new
seasonal factors are estimated and applied to the unadjusted data for the
previous 5 years.  These updated seasonally adjusted indexes replace the
most recent 5 years of seasonal data.

     Seasonal factors may be applied to series using either a direct or an
aggregative method.  Generally, commodity indexes are seasonally adjusted
using direct seasonal adjustment, which produces a more complete
elimination of seasonal movements than does the aggregative method.
However, the direct seasonal adjustment process may not yield figures that
possess additive consistency.  Thus, a seasonally adjusted index for a
broad category that is directly adjusted may not be logically consistent
with all seasonally adjusted indexes for its components.  Seasonal
movements for stage-of-processing indexes are derived indirectly through an
aggregative method that combines movements of a wide variety of subproduct
class (six-digit) series.

     Seasonally adjusted indexes can become problematic when previously
stable and predictable price patterns abruptly change.  If the new pattern
persists, the seasonal adjustment method will eventually reflect it
adequately; if the pattern keeps shifting, however, seasonally adjusted
data will become chronically troublesome.  This problem occurs relatively
infrequently for farm and food-related products, but has more often
affected manufactured products such as automobiles and steel.

     Since January 1988, the PPI has used Intervention Analysis Seasonal
Adjustment methods to enhance the calculation of seasonal factors.  With
this technique, outlier values that may distort the seasonal pattern are
removed from the data prior to applying the standard seasonal factor
estimation procedure.  For example, a possible economic cause for large
price movements for petroleum-based products might have been the Persian
Gulf War.  In this case, intervention techniques allowed for better
estimates of seasonally adjusted data.  On the whole, very few series have
required intervention.  Out of over 300 seasonally adjusted series, only
27 were subject to intervention in 2011.

     For more information relating to seasonal adjustment methods, see (1)
"Appendix A: Seasonal Adjustment Methodology at BLS," in the BLS Handbook
of Methods (July 2010) and (2) "Summary of Changes to the
PPI's Seasonal Adjustment Methodology" in the January 1995 issue of
Producer Price Indexes.

                 Producer Price Index Data on the Internet

     In 1995, the BLS began posting PPI series, news releases, and
technical information to both a World Wide Web (WWW) site and a file
transfer protocol (FTP) site.  During the years following the introduction
of PPI Internet services, use of these sites eclipsed more traditional
methods of data dissemination, such as subscriptions to the PPI Detailed
Report.  There were more than 2.1 million instances of PPI series being
downloaded from the Internet during the 12 months ended December 31, 2008.

                 Retrieving PPI data from the PPI Web site
                                     
     PPI data can be obtained from the WWW address (www.bls.gov/ppi).
Clicking on the "PPI Databases" link reveals the following methods of data 
retrieval:
     
     Top picks is a form-based application for both industry Data and 
Commodity Data that allows the user to quickly obtain PPI time series data 
by selecting the most commonly requested time series, including the All 
Commodities Index and the stage-of-processing indexes (for example, Finished 
Goods).  Within each list, any one-or all-of the time series shown can be 
selected.  A user can modify the date range and output options after executing 
the query, using the reformat button above the data output table.

     One-Screen Data Search and Multi-Screen Data Search are form-based query 
applications for both Industry Data and Commodity Data designed for users 
unfamiliar with the PPI coding structure.  These applications guide a user 
through the PPI classification system by listing index titles and does not 
require knowledge of commodity or industry codes.  Data retrieved are based on 
a query formulated by selecting data characteristics from lists provided.  Two 
options are available to create customized tables, depending on a user's browser 
capability.  The one-screen option is a JavaScript application that uses a 
single screen to guide a user through the available time series data.  The 
second option is a multiple-screen, non-Java-based application.  Both methods 
allow a user to browse the PPI coding structure and select multiple series codes.  
Users can modify the date range and output options after executing the query 
using the reformat button above the data output table.

     Series Report is a form-based application that uses formatted PPI time
series identifiers (commodity or industry codes) as input in extracting
data according to a specified set of date ranges and output options.  This
application provides the most efficient path for users who are familiar
with the format of PPI time series identifiers.  Up to 300 indexes can be
extracted at a time.

     There are five alphabetic prefixes used to create unique PPI time
series identifiers:  WP, WD, PC, PD, and ND.  Each provides the user access
to a different PPI database.  Adding either a "u" (not seasonally adjusted)
or an "s" (seasonally adjusted) to the end of these prefixes further
specifies the type of data needed.

     For commodity and stage-of-processing indexes, series identifiers
combine a "wpu" prefix (not seasonally adjusted) or a "wps" prefix
(seasonally adjusted) with a commodity code.
  
Commodity code            Provides data for:
wps141101                 Passenger cars, seasonally adjusted
wpu141101                 Passenger cars, not seasonally adjusted
wpusop3000                Finished goods, not seasonally adjusted
     
     For discontinued commodity indexes, series identifiers combine a "wdu"
prefix (not seasonally adjusted) or a "wds" prefix (seasonally adjusted)
with a commodity code.
     
Commodity code            Provides data for:
wds019                    Other farm products, seasonally adjusted
wdu0635                   Preparations, ethical (prescription), not seasonally
                          adjusted
wdusi138011               Stainless steel mill products, not seasonally adjusted
     
     Current price indexes grouped by industry according to NAICS have series 
identifiers that begin with the prefix "pcu." After the prefix, there are 12 
digits (the 6-digit industry code is listed twice) followed by up to 7 
alphanumeric characters identifying product detail.  Dashes are used as 
placeholders for higher-level industry group codes.

Industry-product code,
current NAICS series       Provides data for:
pcu325---325---            Chemical manufacturing, not seasonally
                           adjusted
pcu336110336110            Automobile and light duty motor vehicle
                           manufacturing
pcu621111621111411         Offices of physicians, one- and two-physician practices and
                           single-specialty group practices, general/family practice
pcu325412325412A           Pharmaceutical preparation manufacturing, pharmaceuticals 
                           acting on the respiratory system                    
  
     Discontinued industry-product codes based on SIC combine a "pdu"
prefix and "#" between the fourth and fifth characters of the product code.
Series identifiers for the discontinued dataset use underscores as
placeholders to complete a reference to an SIC industry group code of fewer
than four digits.  (All PPI industry-based indexes organized by SIC were
discontinued with the introduction of NAICS.)
  
Industry-product code,
discontinued SIC series    Provides data for:
pdu28__#                   Chemicals and allied products, not seasonally adjusted
pdu331_#                   Blast furnaces, steel works, and rolling and
                           finishing mills, not seasonally adjusted
pdu3711#111                Passenger cars
  
     Price indexes for discontinued series grouped by industry according to
NAICS have series identifiers that begin with the prefix "ndu." After the
prefix, there are 12 numeric digits (the 6-digit industry code is listed
twice), and up to 7 additional alphanumeric characters that identify
product detail.  Dashes are used as placeholders for higher-level industry
group codes.
  
Industry-product code,
discontinued NAICS series  Provides data for:
ndu212231212231            Lead ore and zinc ore mining
ndu2122312122312           Lead and zinc concentrates
ndu212231212231214         Lead concentrates

     Text Files (FTP) and the FTP server are best suited for users requiring
access to either a large volume of time series data or other PPI-related
documentation (such as seasonal factor and relative importance tables).
The FTP site can be accessed at ftp://ftp.bls.gov or directly from the
links on the "PPI Databases" page or the PPI homepage.  Data and
documentation available for download include the following:

                                      Directory:
Industry Data                         /pub/time.series/pc
Industry Data - Discontinued           
		NAICS basis	      /pub/time.series/nd
		SIC basis             /pub/time.series/pd
Commodity Data                        /pub/time.series/wp
Commodity Data, Discontinued        
                Series                /pub/time.series/wd
Special requests                      /pub/special.requests/ppi
Latest news release                   /pub/news.release/ppi.txt

     The FTP site maintains files to help with searches and downloads.
These files are centrally located in the /pub/doc directory.  Within this
directory, the overview.txt file contains an overview relating to all BLS
data available through the FTP site.  For current commodity-based PPI data,
the program help file is wp.txt; for discontinued commodity series, wd.txt;
for current industry-based PPI data based on NAICS, pc.txt; for industry-
based SIC time series that have been discontinued, pd.txt; and for industry-
based NAICS series that have been discontinued, nd.txt.
      
     Users who prefer downloading PPI datasets as individual ZIP files
should go to the directory labeled /pub/time.series/compressed/tape.format/
on the FTP site.  This directory includes six PPI-specific ZIP files, one
for each of the PPI databases-WP, WD, PC, ND, and PD-and a ZIP file for the
annual 5-year revision to historical seasonal PPIs.
                                     
                         Other Sources of PPI Data

     PPI data can also be accessed via the BLS homepage (www.bls.gov).
Clicking on the "Databases & Tools" link at the top of the homepage
calls up a chart listing all available BLS programs.  

                          Additional information

     The PPI homepage (www.bls.gov/ppi) contains additional information
regarding PPI data and methodology.  The top section of the homepage
provides PPI news releases, both current and archived, as well as general
PPI information.  The "Tables Created by BLS" section found beneath the
statistics section provides relative importance and seasonal factor tables.
The remaining sections offer special notices and publications pertaining to
PPI methodology and applications.
     
     For questions or comments regarding PPI data classification,
methodology, or data availability on the Internet, call or e-mail the
Section of Index Analysis and Public Information at (202) 691-7705 or ppi-
info@bls.gov.