The Producer Price Index for final demand fell 0.5 percent in October, seasonally adjusted, after advancing 0.4 percent in September, the U.S. Bureau of Labor Statistics reported today. (See table A.) The October decline is the largest decrease in final demand prices since a 1.2-percent drop in April 2020. On an unadjusted basis, the index for final demand rose 1.3 percent for the 12 months ended in October.
In October, the index for final demand goods fell 1.4 percent. Prices for final demand services were unchanged.
Final Demand
Final demand goods: Prices for final demand goods moved down 1.4 percent in October, the first decrease since falling 1.5 percent in May. A major factor in the October decline was the index for final demand energy, which dropped 6.5 percent. Prices for final demand foods fell 0.2 percent.
Conversely, the index for final demand goods less foods and energy edged up 0.1 percent.
Product detail: Over 80 percent of the October decline in the index for final demand goods is attributable to a 15.3-percent drop in prices for gasoline. The indexes for diesel fuel; hay, hayseeds, and oilseeds; home heating oil; liquefied petroleum gas; and light motor trucks also fell. (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 2024 Model Vehicles at www.bls.gov/web/ppi/ppimotveh.htm.) In contrast, prices for tobacco products increased 2.4 percent.
The indexes for butter and for residual fuels also moved up. (See table 2.)
Final demand services: Prices for final demand services were unchanged in October following six consecutive advances. In October, increases of 1.5 percent in the index for final demand transportation and warehousing services and 0.1 percent in prices for final demand services less trade, transportation, and warehousing offset a 0.7-percent decline in margins for final demand trade services. (Trade indexes measure changes in margins received by wholesalers and retailers.)
Product detail: Within the index for final demand services in October, prices for airline passenger services rose 3.1 percent. The indexes for chemicals and allied products wholesaling, inpatient care, outpatient care (partial), and truck transportation of freight also increased. Conversely, margins for machinery and vehicle wholesaling declined 2.9 percent. The indexes for apparel, footwear, and accessories retailing; portfolio management; traveler accommodation services; and health, beauty, and optical goods retailing also fell.
Intermediate Demand by Commodity Type
Within intermediate demand in October, prices for processed goods fell 0.9 percent, the index for unprocessed goods declined 1.4 percent, and prices for services were unchanged. (See tables B and C.)
Processed goods for intermediate demand: Prices for processed goods for intermediate demand moved down 0.9 percent in October, the largest decrease since falling 1.6 percent in May. Leading the October decline, the index for processed energy goods dropped 4.3 percent. Prices for processed foods and feeds decreased 0.4 percent. In contrast, the index for processed materials less foods and energy advanced 0.1 percent. For the 12 months ended in October, prices for processed goods for intermediate demand fell 4.5 percent.
Product detail: Over 70 percent of the October decline in prices for processed goods for intermediate demand can be traced to a 12.0-percent drop in the index for diesel fuel. Prices for gasoline, prepared animal feeds, plastic resins and materials, liquified petroleum gas, and building paper and board also moved lower. Conversely, the index for primary basic organic chemicals increased 13.0 percent.
Prices for commercial electric power and for meats also moved higher.
Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand fell 1.4 percent in October, the largest decline since dropping 5.2 percent in May. The broad-based October decrease was led by prices for unprocessed foodstuffs and feedstuffs, which moved down 3.1 percent. The indexes for unprocessed energy materials and for unprocessed nonfood materials less energy also fell, 0.3 percent and 0.4 percent, respectively. For the 12 months ended in October, prices for unprocessed goods for intermediate demand decreased 14.0 percent.
Product detail: A major factor in the October decrease in prices for unprocessed goods for intermediate demand was the index for slaughter poultry, which fell 4.9 percent. Prices for crude petroleum; slaughter hogs; hay, hayseeds, and oilseeds; corn; and copper base scrap also moved lower. In contrast, the index for natural gas increased 10.9 percent. Prices for recyclable paper and for slaughter cows and bulls also rose.
Services for intermediate demand: The index for services for intermediate demand was unchanged in both October and September. In October, increases of 0.9 percent in margins for trade services for intermediate demand and 0.7 percent in prices for transportation and warehousing services for intermediate demand offset a 0.3-percent decrease in the index for services less trade, transportation, and warehousing for intermediate demand. For the 12 months ended in October, prices for services for intermediate demand advanced 3.5 percent.
Product detail: Within the index for services for intermediate demand in October, margins for chemicals and allied products wholesaling rose 6.7 percent. The indexes for business loans (partial); metals, minerals, and ores wholesaling; legal services; and airline passenger services also moved higher. Conversely, prices for gross rents for retail properties fell 7.0 percent. The indexes for securities brokerage, dealing, investment advice, and related services; portfolio management; food wholesaling; and deep-sea water transportation of freight also decreased.
Intermediate Demand by Production Flow
Stage 4 intermediate demand: Prices for stage 4 intermediate demand decreased 0.3 percent in October, the largest decline since falling 0.3 percent in March. In October, the index for total goods inputs to stage 4 intermediate demand dropped 0.4 percent, and prices for total services inputs moved down 0.3 percent. (See table D.) Decreases in the indexes for gasoline; gross rents for retail properties; securities brokerage, dealing, investment advice, and related services; portfolio management; diesel fuel; and food wholesaling outweighed increases in the indexes for chemicals and allied products wholesaling, architectural and engineering services, and fabricated structural metal. For the 12 months ended in October, prices for stage 4 intermediate demand rose 1.9 percent.
Stage 3 intermediate demand: The index for stage 3 intermediate demand declined 0.5 percent in October, the largest decrease since falling 1.4 percent in May. In October, prices for total goods inputs to stage 3 intermediate demand dropped 1.7 percent. In contrast, the index for total services inputs advanced 0.5 percent. Lower prices for diesel fuel, gasoline, slaughter poultry, slaughter hogs, steel mill products, and gross rents for retail properties outweighed increases in the indexes for cable network advertising time sales, primary basic organic chemicals, and chemicals and allied products wholesaling. For the 12 months ended in October, prices for stage 3 intermediate demand declined 4.1 percent, the eighth straight 12-month decrease.
Stage 2 intermediate demand: Prices for stage 2 intermediate demand edged down 0.1 percent in October following three consecutive advances. In October, the index for total goods inputs to stage 2 intermediate demand fell 0.5 percent. Conversely, prices for total services inputs rose 0.2 percent.
Decreases in the indexes for crude petroleum, oilseeds, liquefied petroleum gas, food wholesaling, and prepared animal feeds outweighed increases in the indexes for business loans (partial), natural gas, primary basic organic chemicals, and chemicals and allied products wholesaling. For the 12 months ended in October, prices for stage 2 intermediate demand fell 2.7 percent.
Stage 1 intermediate demand: The index for stage 1 intermediate demand moved down 0.4 percent in October, the largest decrease since dropping 1.0 percent in May. In October, prices for total goods inputs to stage 1 intermediate demand fell 0.7 percent, and the index for total services inputs declined 0.2 percent. Lower prices for diesel fuel; gasoline; gross rents for retail properties; securities brokerage, dealing, investment advice, and related services; traveler accommodation services; and steel mill products outweighed increases in the indexes for primary basic organic chemicals, chemicals and allied products wholesaling, and airline passenger services. For the 12 months ended in October, prices for stage 1 intermediate demand fell 1.5 percent, the seventh consecutive 12-month decrease.
The Producer Price Index for November 2023 is scheduled to be released on Wednesday, December 13, 2023, at 8:30 a.m. (ET).
Resampling of Industries - October 2023
Effective with the release of data for October 2023, the Producer Price Index (PPI) includes data for 6 resampled industries classified according to the 2022 North American Industry
Classification System (NAICS). The Bureau of Labor Statistics periodically updates the sample of producers providing data for the PPI to reflect current conditions more accurately when the structure, membership, technology, or product mix of an industry shifts. The first results of this systematic process were published in July 1986. Subsequent efforts have been completed at regular intervals.
For information on index additions, deletions, and recodes effective October 2023, see the current issue of the PPI Detailed Report online at www.bls.gov/ppi/detailed-report/ppi-detailed- report-october-2023.pdf, or contact the PPI Section of Index Analysis and Public Information at [email protected] or (202) 691-7705.
NAICS
Code Industry
311511 Fluid milk manufacturing
311812 Commercial bakeries
327213 Glass container manufacturing
331315 Aluminum sheet, plate, and foil manufacturing
331511 Iron foundries
333519 Rolling mill and other metalworking machinery manufacturing
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Recalculated Seasonal Adjustment Factors and Relative Importance Figures to be
Available on February 14, 2024
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 information relating to the seasonal-factor update will be available on
February 14, 2024 (2 workdays prior to the release of PPI data for January 2024 on February 16,
2024):
* Direct seasonal factors for PPI commodity indexes for the year 2024,
* Recalculated seasonal factors for the last 5 years (2019-2023) for PPI commodity indexes,
* Recalculated seasonal factors for the last 5 years (2019-2023) for PPI Final Demand-
Intermediate Demand indexes,
* Recalculated seasonal index data for the last 5 years (2019-2023) 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 figure tables, which include values for December
2023, will be available on February 14, 2024:
* 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
This information will be available on the PPI website at www.bls.gov/ppi or by contacting the
PPI Section of Index Analysis and Public Information at [email protected] or (202) 691-7705.
