US Producer Price Indexes - June 2007

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Producer Price Indexes - June 2007

The Producer Price Index for Finished Goods decreased 0.2 percent in
June, seasonally adjusted, the Bureau of Labor Statistics of the U.S.
Department of Labor reported today. This decline followed advances of 0.9
percent in May and 0.7 percent in April. At the earlier stages of
processing, prices received by producers of intermediate goods rose 0.5
percent in June after increasing 1.1 percent in the prior month, and the
crude goods index moved up 0.3 percent following a 2.0-percent advance in
May. (See table A.)

Table A. Monthly and annual percent changes in selected stage-of-processing price
indexes, seasonally adjusted
______________________________________________________________________________________
| | | | |
| | Finished goods | | |
| | | | |
| |---------------------------------------------------------| | |
| | | | | | Change in | | |
| | | | | Except |finished goods| Inter- | |
| | | | |foods and|from 12 months| mediate | Crude |
| Month | Total | Foods | Energy | energy | ago(unadj.) | goods | goods |
|--------------------------------------------------------------------------------------|

2006
June 0.5 1.2 1.1 0.1 4.9 0.5 -2.6
July -.1 .1 .7 -.5 4.0 .2 2.8
Aug. .4 1.2 -.5 .4 3.8 .4 2.6
Sept. -1.1 .4 -5.9 .3 .9 -1.3 -3.8
Oct. -1.5 -.4 -5.8 -.4 -1.2 -1.2 -9.2
Nov. 1.6 .1 5.4 .9 .9 .6 11.7
Dec. .7 1.1 2.4 .1 1.1 .9 2.6

2007
Jan. -.6 1.0 -4.3 .2 .1 -.7 -5.5
Feb. r 1.2 r 1.7 r 3.0 .4 r 2.4 r .8 r 9.0
Mar. 1.0 r 1.7 3.6 0 3.2 r 1.3 r 4.8
Apr. .7 .4 3.4 0 3.2 .9 -1.5
May .9 -.2 4.1 .2 4.1 1.1 2.0
June -.2 -.8 -1.1 .3 3.3 .5 .3

r=revised. Some of the figures shown above and elsewhere in this release may differ
from those previously reported because data for February 2007 have been revised to
reflect the availability of late reports and corrections by respondents.

-2-

Among prices for finished goods, the index for energy goods fell 1.1
percent in June after rising 4.1 percent in May. Prices for consumer foods
decreased 0.8 percent following a 0.2-percent decline in the previous
month. By contrast, slightly counteracting the downturn in finished goods
prices, the index for finished goods other than foods and energy increased
0.3 percent in June compared with a 0.2-percent rise in May.

During the first 6 months of 2007, the finished goods index rose at a
6.4-percent seasonally adjusted annual rate (SAAR) after no change during
the latter half of 2006. Prices for finished energy goods climbed at an
18.4-percent SAAR from December 2006 to June 2007 after declining at an 8.2-
percent SAAR for the 6 months ended December 2006. The index for finished
consumer foods moved up at a 7.8-percent SAAR during the first half of 2007
after increasing at a 4.9-percent SAAR during the second half of 2006.
Prices for finished goods other than foods and energy advanced at a 2.3-
percent SAAR for the 6 months ended June 2007 after rising at a 1.3-percent
SAAR during the prior 6-month period. At the earlier stages of processing,
the intermediate goods index increased at an 8.0-percent SAAR from December
2006 to June 2007 after falling at a 1.0-percent SAAR during the latter
half of 2006, and prices for crude goods advanced at an 18.6-percent SAAR
for the 6 months ended in June after moving up at an 11.3-percent SAAR for
the 6 months ended in December. (See summary table below.)

Summary of December-to-December, 6-month, and 3-month seasonally adjusted annual rates of
change in price indexes for selected stages of processing
_________________________________________________________________________________________
| | Percentage | |
| | change 12 |Seasonally adjusted annual rate for|
| | months ended | |
| Grouping | December | |
| |--------------------|-----------------------------------|
| | | | |6 months|3 months|3 months|3 months|
| | 2004 | 2005 | 2006 | ended | ended | ended | ended |
| | | | | Dec. | June | Mar. | June |
| | | | | 2006 | 2007 | 2007 | 2007 |
|-----------------------------------------------------------------------------------------|

Finished goods 4.2 5.4 1.1 0.0 6.4 7.1 5.7
Finished consumer foods 3.1 1.7 1.7 4.9 7.8 19.3 -2.6
Finished energy goods 13.4 23.9 -2.0 -8.2 18.4 9.1 28.6
Finished goods less foods
and energy 2.3 1.4 2.0 1.3 2.3 2.5 2.0
Finished consumer goods,
excluding foods and energy 2.2 1.6 1.8 1.1 2.4 2.9 1.9
Capital equipment 2.4 1.2 2.3 1.8 1.9 2.2 1.6

Intermediate materials,
supplies, and components 9.2 8.6 2.8 -1.0 8.0 5.7 10.4
Intermediate foods and feeds -2.3 2.4 4.7 10.6 20.3 32.3 9.3
Intermediate energy goods 15.8 26.2 -3.3 -9.4 19.8 14.4 25.5
Intermediate materials less
foods and energy 8.3 4.8 4.5 1.0 4.5 2.4 6.6
Materials for
nondurable manufacturing 13.7 8.9 1.2 -5.9 15.4 10.1 20.9
Materials for
durable manufacturing 18.3 5.9 12.5 2.0 11.1 4.8 17.7
Materials and components
for construction 10.1 6.1 4.3 1.0 3.5 2.1 4.9

Crude materials for further
processing 17.4 21.1 -4.7 11.3 18.6 36.0 3.3
Foodstuffs and feedstuffs -2.6 1.6 2.8 20.7 33.9 59.8 12.3
Crude energy materials 35.9 42.2 -15.7 13.7 3.5 8.0 -.8
Crude nonfood materials less
energy 20.5 5.2 17.0 -4.2 26.5 58.3 1.1

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NOTE: Late reports and corrections by respondents may cause some indexes to change 4 months
after original publication. In addition, seasonally adjusted indexes may be revised for 5
years, due to the recalculation of seasonal factors each January.

-3-

Before seasonal adjustment, the Producer Price Index for Finished
Goods fell 0.4 percent in June to 167.1 (1982 = 100). From June 2006 to
June 2007, prices for finished goods increased 3.3 percent. Over the same
period, the index for finished consumer foods rose 6.5 percent, prices for
finished energy goods climbed 4.7 percent, and the index for finished goods
other than foods and energy advanced 1.8 percent. For the 12 months ended
June 2007, prices received by intermediate goods producers moved up 3.7
percent, and the crude goods index increased 14.8 percent.

Finished goods

Prices for finished energy goods declined 1.1 percent in June after
increasing 4.1 percent in May. The gasoline index fell 3.9 percent
following a 10.2-percent jump in the previous month. Prices for liquefied
petroleum gas, residential electric power, home heating oil, and finished
lubricants also turned down after rising in May. By contrast, slightly
counteracting the downturn in the finished energy goods index, residential
natural gas prices advanced 2.6 percent in June following a 0.9-percent
increase a month earlier. The index for diesel fuel turned up after
decreasing in May. (See table 2.)

Prices for finished consumer foods fell 0.8 percent in June following
a 0.2-percent decrease in May. The index for fresh fruits and melons
declined 14.9 percent after climbing 12.1 percent in the preceding month.
Prices for eggs for fresh use, beef and veal, pork, processed fruits and
vegetables, and soft drinks also turned down following increases in May.
The index for processed young chickens decreased more in June than it had
in the prior month. By contrast, prices for fresh and dry vegetables rose
0.2 percent following a 35.0-percent drop a month earlier. The index for
dairy products advanced more in June than it had in May.

Table B. Monthly and annual percent changes in selected price indexes for
intermediate goods and crude goods, seasonally adjusted
__________________________________________________________________________________
| | | |
| | Intermediate goods | Crude goods |
| | | |
| |---------------------------------------------------------------------------|
| | | | |Change in | | | | Change |
| | | | | interme- | | | |in crude |
| | | | | diate | | | | goods |
| | | | |goods from| | | | from 12 |
| | | | Except |12 months | | | Except | months |
| | | |foods and| ago | | |foods and| ago |
|Month | Foods | Energy | energy | (unadj.) | Foods | Energy | energy |(unadj.) |
|----------------------------------------------------------------------------------|

2006
June 0.6 0.4 0.6 9.5 4.0 -7.0 -1.0 8.7
July .8 -1.1 .5 8.7 2.2 3.7 1.5 6.2
Aug. -.4 .4 .4 8.8 .3 6.9 -3.4 5.1
Sept. .6 -6.0 0 4.7 1.8 -9.2 1.4 -8.2
Oct. .4 -5.9 -.1 .2 2.7 -20.1 -2.7 -21.1
Nov. 2.4 4.3 -.4 2.1 2.5 26.5 -.6 -10.5
Dec. 1.2 3.9 .1 2.8 -.1 4.8 1.7 -4.7

2007
Jan. 1.8 -3.7 0 1.1 2.4 -15.3 1.8 -9.5
Feb. r 3.0 r 3.5 r 0 r 2.2 r 7.4 r 14.3 r 2.9 r 7.7
Mar. r 2.3 r 3.7 r .6 3.5 r 2.2 r 5.4 r 7.1 15.6
Apr. .5 1.3 .8 3.7 1.3 -4.9 .4 11.1
May .1 4.2 .4 3.7 1.1 4.3 .1 11.5
June 1.6 .3 .4 3.7 .5 .6 -.2 14.8

r=revised. Some of the figures shown above and elsewhere in this release may
differ from those previously reported because data for February 2007 have been
revised to reflect the availability of late reports and corrections by respondents.

-4-

The index for finished goods other than foods and energy increased 0.3
percent in June following a 0.2-percent advance in May. Higher prices for
light motor trucks, passenger cars, sanitary papers and health products,
civilian aircraft, household furniture, and alcoholic beverages outweighed
lower prices for electronic computers, commercial furniture, pharmaceutical
preparations, and cosmetics and other toilet preparations.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and
Components rose 0.5 percent in June following a 1.1-percent advance in the
prior month. Prices for intermediate energy goods and materials for
nondurable manufacturing increased less than they had in May. Conversely,
partially offsetting the deceleration in intermediate goods prices, the
indexes for intermediate foods and feeds, materials and components for
construction, and materials for durable manufacturing rose more than in the
previous month. Prices for intermediate goods other than foods and energy
moved up 0.4 percent for the second consecutive month. (See table B.)

The index for intermediate energy goods rose 0.3 percent in June after
jumping 4.2 percent in May. The index for residual fuel increased 0.6
percent in June after climbing 7.8 percent a month earlier. Prices for
gasoline, industrial electric power, jet fuels, and liquefied petroleum gas
turned down after advancing in May. By contrast, the rise in the index for
natural gas to electric utilities accelerated to 7.8 percent from 1.4
percent in the previous month. Prices for commercial natural gas also
increased more in June, and the index for diesel fuel turned up after
declining in May. (See table 2.) From December 2006 to June 2007, the
index for intermediate energy goods advanced at a 19.8-percent SAAR after
dropping at a 9.4-percent SAAR in the previous 6-month period.

The index for materials for nondurable manufacturing moved up 1.8
percent in June after advancing 2.9 percent in the prior month. The
increase in the index for primary basic organic chemicals slowed to 2.7
percent from 4.6 percent in May. Prices for plastic resins and materials
and for intermediate basic organic chemicals also rose less than in the
preceding month. Conversely, the increase in the fertilizer materials
index accelerated to 4.8 percent in June from 0.5 percent a month earlier.
Prices for basic inorganic chemicals also increased more than in the
preceding month. The indexes for paper, processed yarns and threads, and
synthetic rubber turned up after falling in May. The index for materials
for nondurable manufacturing rose at a 15.4-percent SAAR during the first
half of 2007 after declining at a 5.9-percent SAAR in the second half of
2006.

Prices for intermediate foods and feeds moved up 1.6 percent in June
after increasing 0.1 percent in the prior month. The index for prepared
animal feeds turned up 2.2 percent after dropping 3.1 percent in May.
Prices for flour, fluid milk products, and for natural, processed, and
imitation cheese rose more than in the previous month. By contrast, the
index for beef and veal turned down 3.3 percent after advancing 1.0 percent
in the prior month. Prices for pork also decreased after rising in May.
The index for shortening and cooking oils increased less in June, and
prices for processed young chickens fell more than in May. During the
first half of 2007, the index for intermediate foods and feeds rose at a
20.3-percent SAAR after advancing at a 10.6-percent SAAR in the second half
of 2006.

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The index for materials and components for construction moved up 0.4
percent in June after advancing 0.3 percent a month earlier. Price
increases for nonferrous wire and cable, plywood, asphalt felts and
coatings, wiring devices, softwood lumber, treated wood, and concrete
products outweighed price decreases for plastic construction products.
From December 2006 to June 2007, prices for materials and components for
construction moved up at a 3.5-percent SAAR after advancing at a 1.0-
percent SAAR from June to December 2006.

-5-

The index for materials for durable manufacturing increased 0.3
percent in June after moving up 0.2 percent in the prior month. Rising
prices for copper and brass mill shapes, cold rolled steel sheet and strip,
semifinished steel mill products, plywood, softwood lumber, and secondary
aluminum more than offset falling prices for aluminum mill shapes and cold
finished steel bars. The index for materials for durable manufacturing
climbed at an 11.1-percent SAAR in the first half of 2007 after rising at a
2.0-percent SAAR in the prior 6-month period.

Crude goods

The Producer Price Index for Crude Materials for Further Processing
moved up 0.3 percent in June following a 2.0-percent increase in May.
Prices for crude energy materials and for crude foodstuffs and feedstuffs
rose less than they had in May. The index for basic industrial materials
turned down after edging up in the prior month. (See table B.)

Prices for crude energy materials moved up 0.6 percent in June
subsequent to a 4.3-percent increase a month earlier. In June, rising
prices for crude petroleum and coal outweighed falling prices for natural
gas. (See table 2.) During the first half of 2007, the crude energy
materials index advanced at a 3.5-percent SAAR after rising at a 13.7-
percent SAAR in the previous 6-month period.

The crude foodstuffs and feedstuffs index advanced 0.5 percent
following a 1.1-percent increase in May. In June, higher prices for fluid
milk, corn, wheat, soybeans, slaughter hogs, and slaughter turkeys
outweighed lower prices for slaughter cattle, slaughter broilers and
fryers, fresh fruit and melons, and unprocessed finfish. The index for
crude foodstuffs and feedstuffs increased at a 33.9-percent SAAR in the
first half of 2007 subsequent to rising at a 20.7-percent SAAR in the
second half of 2006.

Prices for crude nonfood materials less energy inched down 0.2 percent
in June after edging up 0.1 percent in the preceding month. The copper
base scrap index declined 6.6 percent following a 10.3-percent gain in May.
Similarly, prices for wastepaper and pulpwood also turned down in June.
The indexes for aluminum base scrap and for construction sand, gravel, and
crushed stone were unchanged after increasing in the previous month.
Prices for gold ores fell more than they had a month earlier. By contrast,
partially offsetting the downturn in the basic industrial materials index,
prices for iron and steel scrap advanced 1.4 percent in June subsequent to
an 8.3-percent decrease in the prior month. The indexes for phosphates and
for hardwood logs, bolts, and timber also turned up in June. Prices for
raw cotton declined less than they had in May. From December 2006 to June
2007, the index for basic industrial materials increased at a 26.5-percent
SAAR after decreasing at a 4.2-percent SAAR in the prior 6-month period.

Net output price indexes

Mining, Utilities, and Manufacturing Industries. The Producer Price Index
for the Net Output of Total Mining, Utilities, and Manufacturing Industries
advanced 0.2 percent in June following a 1.2-percent rise in May. (Net
output price indexes are not seasonally adjusted.) In June, prices
received by electric power distributors increased 3.3 percent. The
industry indexes for electric power generation; natural gas distribution;
mining support activities; as well as, food, chemical, and electrical
equipment and appliance manufacturing also moved up in June. By contrast,
prices received by petroleum and coal products manufacturers fell 3.1
percent in June. The industry indexes for printing and related support
activities and for beverage and tobacco manufacturing also declined in
June.

-6-

Trade Industries. The Producer Price Index for the Net Output of Total
Trade Industries decreased 1.2 percent in June after climbing 2.0 percent
in May. (Trade indexes measure changes in margins received by wholesalers
and retailers.) Margins received by gasoline stations dropped 8.4 percent
in June compared with a 43.3-percent jump in the prior month. The margin
indexes for merchant wholesalers of both durable and nondurable goods,
grocery stores, health and personal care stores, and florists also turned
down following advances in May. Margins received by building materials and
supplies dealers rose less in June than they had a month earlier. By
contrast, partially counteracting the downturn in the trade industries
index, margins received by shoe stores increased 18.6 percent following a
15.2-percent decline in May. The margin indexes for department stores,
wholesale trade agents and brokers, and recreational vehicle dealers also
moved up in June after falling in the previous month.

Transportation and Warehousing Industries. The Producer Price Index for
the Net Output of Total Transportation and Warehousing Industries advanced
0.8 percent in June after inching down 0.1 percent in May. Prices received
by the industry for scheduled passenger air transportation rose 4.5 percent
in June following an 8.4-percent decrease in the preceding month. Prices
received by the industries for line-haul railroad transportation, inland
water freight transportation, and courier services increased more in June
than they had a month earlier. The index for long-distance general freight
trucking (by the truckload) was unchanged following a decline in May.
Conversely, prices received by the United States Postal Service were
unchanged in June after rising 6.5 percent in the prior month. The indexes
for scheduled freight air transportation, long distance general freight
trucking (less than truckload), and local general freight trucking turned
down after advancing in May.

Traditional Service Industries. The Producer Price Index for the Net
Output of Total Traditional Service Industries climbed 0.7 percent in June
following a 0.3-percent decline in May. Prices received by the commercial
banking industry jumped 4.7 percent in June after falling 3.8 percent a
month earlier. The indexes for savings institutions, lessors of
nonresidential buildings (except miniwarehouses), offices of real estate
agents and brokers, and passenger car rental also turned up following
decreases in May. Prices received by non-casino hotels and motels moved up
more in June than they had in the previous month. The indexes for wired
telecommunications carriers and general medical and surgical hospitals rose
after no change in May. By contrast, prices received by cellular and other
wireless carriers declined 2.2 percent in June after increasing 3.0 percent
in the preceding month. The indexes for management consulting services and
offices of lawyers also turned down following advances in May.

*****
Producer Price Index data for July 2007 are scheduled to be released on
Tuesday, August 14, 2007 at 8:30 a.m. (EDT).







Technical Note

Brief Explanation of Producer Prices 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 8,000 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.