Price movements May 2005

PPI Detailed Report, May, 2005

The Producer Price Index for Finished Goods fell 0.6 percent in May, seasonally adjusted. This decline followed a 0.6-percent increase in April and a 0.7-percent advance in March. At the earlier stages of processing, prices received by manufacturers of intermediate goods decreased 0.7 percent in May, after rising 0.8 percent in the preceding month, while the crude goods index moved down 2.0 percent, following a 2.7-percent jump in April. (See table A.)

Over three-fourths of the downturn in the finished goods index can be traced to prices for energy goods, which fell 3.5 percent in May after posting a 2.1-percent increase in April. Prices for finished consumer foods also turned down, declining 0.3 percent following a 0.1-percent advance in the prior month. The index for finished goods other than foods and energy went up 0.1 percent in May, compared with a 0.3-percent gain in April.

Before seasonal adjustment, the Producer Price Index for Finished Goods moved down 0.2 percent in May to 154.1 (1982=100). From May 2004 to May 2005, prices for finished goods increased 3.5 percent. Over the same period, the index for finished energy goods climbed 10.2 percent, the index for finished consumer foods advanced 0.8 percent, and prices for finished goods other than foods and energy rose 2.6 percent. For the 12 months ended May 2005, prices for intermediate goods increased 6.3 percent, and the crude goods index went up 6.1 percent.

Finished goods

The index for finished energy goods fell 3.5 percent in May, after rising 2.1 percent in April. Accounting for nearly half of this downturn, gasoline prices dropped 9.9 percent in May, following a 2.6-percent increase a month earlier. The indexes for residential natural gas and liquefied petroleum gas also turned down, following April gains. Prices for home heating oil, residential electric power, and diesel fuel decreased at faster rates than they did in the preceding month. (See table 2.)

Prices for finished consumer foods declined 0.3 percent in May, compared with a 0.1-percent rise in April. The index for fresh and dry vegetables dropped 15.0 percent, following a 1.1-percent increase in the preceding month. Pork prices were unchanged in May, after advancing a month earlier. The indexes for roasted coffee and confectionery end products moved up at slower rates than they did in April, while prices for processed turkeys and for shortening and cooking oils fell more in May than they did in the prior month. By contrast, the index for soft drinks rose 1.0 percent in May, compared with a 1.3-percent decrease in April. Prices for eggs for fresh use and for finfish and shellfish also turned up in May.

The index for finished consumer goods other than foods and energy inched up 0.1 percent in May, following a 0.2-percent advance in April. In May, rising prices for cigarettes, pharmaceutical preparations, periodical circulation, textile housefurnishings, household furniture, alcoholic beverages, and mobile homes slightly outweighed falling prices for light motor trucks; passenger cars; and women's, girls', and infants' apparel.

The capital equipment index edged up 0.1 percent in May, after moving up 0.2 percent in April. In May, higher prices for construction machinery and equipment; civilian aircraft; heavy motor trucks; commercial furniture; agricultural machinery and equipment; and tools, dies, jigs, fixtures, and industrial molds slightly outweighed lower prices for light motor trucks, passenger cars, and electronic computers.

Intermediate goods

The Producer Price Index for Intermediate Materials, Supplies, and Components declined 0.7 percent in May, after increasing 0.8 percent in April. The majority of this downturn was due to the index for intermediate energy goods, which fell after rising in April. Prices for materials for durable manufacturing declined in May, after showing no change in the prior month. The index for materials and components for construction edged down slightly more in May than it did in the previous month. By contrast, prices for materials for nondurable manufacturing advanced in May, after declining in April. Prices for intermediate foods and feeds rose at the same pace in May as they did in the previous month. Excluding foods and energy, prices for intermediate goods turned down 0.3 percent, following a 0.2-percent advance in April. (See table B.)

The index for intermediate energy goods decreased 2.6 percent in May, compared to a 3.4-percent advance in April. Prices for industrial natural gas fell 1.5 percent, after rising 8.4 percent in April. Prices for jet fuels, gasoline, commercial natural gas, natural gas to electric utilities, and liquefied petroleum gas also turned down in May, compared with increases in the prior month. The home heating oil and diesel fuel indexes fell at faster rates in May than they did in April. Conversely, the index for commercial electric power increased 1.1 percent, following a 0.1-percent gain in the preceding month. (See table 2.)

Prices for materials for durable manufacturing fell 1.4 percent in May, after showing no change in April. The index for hot rolled steel sheet and strip declined 8.4 percent, following a 1.1-percent decline in the previous month. Prices for aluminum mill shapes, cold rolled steel sheet and strip, and unprocessed filament yarns increased less than they did in the prior month. The flat glass and original equipment automotive stamping indexes turned down, compared with increases in April. By contrast, the index for semifinished steel mill products rose 0.1 percent, after dropping 10.3 percent in April. Also moving up in May, after falling in the prior month, were the indexes for hot rolled steel bars, plates, and structural shapes; cold finished steel bars; copper and brass mill shapes; and hardwood lumber.