Transmission of material in this release is embargoed until                          USDL 20-2091
8:30 a.m. (ET), Friday, November 13, 2020

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 2020


The Producer Price Index for final demand advanced 0.3 percent in October, seasonally adjusted, 
the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.4 percent in 
September and 0.3 percent in August. (See table A.) On an unadjusted basis, the final demand 
index increased 0.5 percent for the 12 months ended in October, the largest advance since 
moving up 1.1 percent for the 12 months ended in February.

In October, nearly 60 percent of the rise in the final demand index can be traced to a 0.5-percent 
increase in prices for final demand goods. The index for final demand services moved up 0.2 
percent.

The index for final demand less foods, energy, and trade services advanced 0.2 percent in 
October, the sixth consecutive increase. For the 12 months ended in October, prices for final 
demand less foods, energy, and trade services rose 0.8 percent, the largest advance since moving 
up 1.0 percent for the 12 months ended in March.

Final Demand

Final demand goods: The index for final demand goods increased 0.5 percent in October, the sixth 
consecutive rise. Nearly three-fourths of the October advance is attributable to prices for final 
demand foods, which jumped 2.4 percent. The index for final demand energy moved up 0.8 percent. 
Prices for final demand goods less foods and energy were unchanged.

Product detail: In October, a major factor in the increase in prices for final demand goods was the 
index for fresh and dry vegetables, which rose 26.8 percent. Prices for gasoline, meats, chicken eggs, 
and thermoplastic resins and materials also moved higher. In contrast, the residential electric power 
index fell 1.0 percent. Prices for light motor trucks, packaged fluid milk and related products, and 
passenger cars also decreased. (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 2021 Model Vehicles at www.bls.gov/web/ppi/ppimotveh.htm.) 

Final demand services: The index for final demand services rose 0.2 percent in October after 
advancing 0.4 percent in September. Nearly 40 percent of the broad-based October increase can be 
traced to prices for final demand transportation and warehousing services, which moved up 1.1 
percent. The indexes for final demand trade services and final demand services less trade, 
transportation, and warehousing also advanced, 0.2 percent and 0.1 percent, respectively. (Trade 
indexes measure changes in margins received by wholesalers and retailers.) 

Product detail: Over a quarter of the advance in the index for final demand services can be traced to 
prices for long-distance motor carrying, which rose 1.9 percent. The indexes for hardware, building 
materials, and supplies retailing; securities brokerage, dealing, and investment advice; automotive 
fuels and lubricants retailing; hospital inpatient care; and automobile retailing (partial) also moved 
higher. Conversely, margins for chemicals and allied products wholesaling fell 2.6 percent. The 
indexes for gaming receipts (partial) and physician care also decreased. (See table 4.)

Intermediate Demand by Commodity Type

Within intermediate demand in October, prices for processed goods advanced 0.3 percent, the index 
for unprocessed goods rose 2.6 percent, and prices for services increased 0.8 percent. (See tables B 
and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate 
demand rose 0.3 percent in October, the fifth consecutive advance. Seventy percent of the October 
increase is attributable to prices for processed foods and feeds, which climbed 2.2 percent. The index 
for processed materials less foods and energy moved up 0.2 percent. In contrast, prices for processed 
energy goods declined 0.3 percent. For the 12 months ended in October, the index for processed 
goods for intermediate demand fell 1.5 percent.

Product detail: A 3.4-percent advance in the index for prepared animal feeds was a major factor in 
the October rise in prices for processed goods for intermediate demand. The indexes for gasoline, 
diesel fuel, meats, thermoplastic resins and materials, and lubricating oil base stocks also moved 
higher. Conversely, prices for natural gas to electric utilities decreased 10.6 percent. The indexes for 
electric power and softwood lumber (not edge worked) also fell. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate 
demand advanced 2.6 percent in October, the third straight increase. Over half of the broad-based 
rise in October can be traced to prices for unprocessed energy materials, which moved up 4.5 
percent. The indexes for unprocessed foodstuffs and feedstuffs and for unprocessed nonfood 
materials less energy also increased, 2.3 percent and 0.6 percent, respectively. For the 12 months 
ended in October, prices for unprocessed goods for intermediate demand declined 3.4 percent.

Product detail: Over 70 percent of the October rise in the index for unprocessed goods for 
intermediate demand is attributable to prices for crude petroleum, which jumped 13.8 percent. The 
indexes for slaughter hogs; slaughter steers and heifers; slaughter poultry; corn; and hay, hayseeds, 
and oilseeds also moved higher. In contrast, raw milk prices fell 18.4 percent. The indexes for natural 
gas and corrugated recyclable paper also decreased.

Services for intermediate demand: The index for services for intermediate demand climbed 0.8 
percent in October, the fifth consecutive increase. Nearly half of the broad-based October advance is 
attributable to a 0.5-percent rise in prices for services less trade, transportation, and warehousing for 
intermediate demand. The indexes for trade services for intermediate demand and for transportation 
and warehousing services for intermediate demand moved up 1.1 percent and 1.6 percent, 
respectively. For the 12 months ended in October, prices for services for intermediate demand 
advanced 1.6 percent, the largest increase since rising 1.7 percent for the 12 months ended in 
January.

Product Detail: A major factor in the October increase in the index for services for intermediate 
demand was a 15.0-percent jump in prices for broadcast and network television advertising time 
sales. The indexes for hardware, building materials, and supplies retailing; metals, minerals, and ores 
wholesaling; arrangement of freight and cargo transportation; securities brokerage, dealing, and 
investment advice; and temporary help services also advanced. Conversely, prices for gross rents of 
retail properties fell 8.8 percent. The indexes for chemicals and allied products wholesaling and for 
legal services also declined. 

Intermediate Demand by Production Flow

Stage 4 intermediate demand: In October, the index for stage 4 intermediate demand advanced 0.4 
percent, the sixth consecutive increase. In October, prices for both total goods and total services 
inputs to stage 4 intermediate demand also moved up 0.4 percent. (See table D.) Advances in the 
indexes for natural cheese (except cottage cheese); hardware, building materials, and supplies 
retailing; metals, minerals, and ores wholesaling; securities brokerage, dealing, and investment 
advice; machinery and equipment parts and supplies wholesaling; and meats outweighed declines in 
the indexes for gross rents of retail properties, chemicals and allied products wholesaling, and 
electric power. (See table 6.) For the 12 months ended in October, prices for stage 4 intermediate 
demand climbed 1.6 percent, the largest increase since rising 1.6 percent for the 12 months ended in 
January.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand rose 0.4 percent in October 
after increasing 1.1 percent in the prior month. In October, the index for total services inputs to stage 
3 intermediate demand climbed 0.7 percent, and prices for total goods inputs moved up 0.2 percent. 
Advances in the indexes for arrangement of freight and cargo transportation; slaughter hogs; 
gasoline; slaughter poultry; slaughter steers and heifers; and metals, minerals, and ores wholesaling 
outweighed decreasing prices for raw milk, gross rents of retail properties, and jet fuel. For the 12 
months ended in October, the index for stage 3 intermediate demand fell 2.5 percent. 

Stage 2 intermediate demand: Prices for stage 2 intermediate demand rose 1.3 percent in October, 
the sixth consecutive increase. In October, the index for total goods inputs to stage 2 intermediate 
demand advanced 2.0 percent, and prices for total services inputs moved up 0.8 percent. Increases in 
the indexes for crude petroleum; arrangement of freight and cargo transportation; thermoplastic 
resins and materials; temporary help services; securities brokerage, dealing, and investment advice; 
and hardware, building materials, and supplies retailing outweighed falling prices for natural gas, 
softwood lumber (not edge worked), and legal services. For the 12 months ended in October, the 
index for stage 2 intermediate demand declined 0.9 percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand advanced 0.5 percent in 
October after increasing 1.8 percent in September. In October, prices for both total goods and total 
services inputs to stage 1 intermediate demand also rose 0.5 percent. Advances in the indexes for 
diesel fuel; metals, minerals, and ores wholesaling; crude petroleum; hardware, building materials, 
and supplies retailing; corn; and securities brokerage, dealing, and investment advice outweighed 
declines in the indexes for gross rents of retail properties, chemicals and allied products wholesaling, 
and electric power. For the 12 months ended in October, prices for stage 1 intermediate demand fell 
0.6 percent.

________________
The Producer Price Index for November 2020 is scheduled to be released on Friday, 
December 11, 2020 at 8:30 a.m. (ET).

                                             *****

   Coronavirus (COVID-19) Pandemic Impact on October 2020 Producer Price Index Survey Data

As was the case for March through September, the Producer Price Index (PPI) response rates for 
October were consistent with pre-COVID-19 response rates, and no changes in estimation 
procedures were necessary. Additional information is available at www.bls.gov/covid19/effects-
of-covid-19-pandemic-on-producer-price-index.htm.

                                             *****

                                    Resampling of Industries

Effective with the release of data for October 2020, the Producer Price Index (PPI) includes data 
for 12 resampled industries classified according to the 2017 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 2020, see the 
current issue of the PPI Detailed Report online at www.bls.gov/ppi/ppidr202010.pdf, or contact 
the PPI Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-
7705.

NAICS
Code                    Industry
212230        Copper, nickel, lead, and zinc mining
311412        Frozen specialty food manufacturing
332996        Fabricated pipe and pipe fitting manufacturing
333132        Oil and gas field machinery and equipment manufacturing
333243        Sawmill, woodworking, and paper machinery manufacturing
333994        Industrial process furnace and oven manufacturing
334418        Printed circuit assembly manufacturing
334419        Other electronic component manufacturing
334513        Industrial process variable instruments manufacturing
336612        Boat building
483111        Deep sea freight transportation
511199        All other publishers


                                             *****

           Recalculated Seasonal Adjustment Factors and Relative Importance Figures to be 
                                Available on February 12, 2021

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 12, 2021 (2 workdays 
prior to the release of PPI data for January 2021 on February 17, 2021):

*  Direct seasonal factors for PPI commodity indexes for the year 2021,
*  Recalculated seasonal factors for the last 5 years (2016-2020) for PPI commodity indexes, 
*  Recalculated seasonal factors for the last 5 years (2016-2020) for PPI Final Demand-
   Intermediate Demand indexes, 
*  Recalculated seasonal index data for the last 5 years (2016-2020) 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, which include values for December 2020, 
will be available on February 12, 2021:  

*  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 ppi-info@bls.gov or (202) 691-7705.

                                              *****

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

Effective with the release of data for January 2021 on February 17, 2021, 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 2012 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 2012 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 substantial shifts in the relative importance figures of certain commodity 
components that make up the FD-ID indexes.

Relative importance figure tables for December 2020, which reflect the shift from 2007 to 2012 
input-output relationships, will be available on February 12, 2021 on the BLS website at 
www.bls.gov/ppi. This information also may be requested from the PPI Section of Index 
Analysis and Public Information through e-mail to ppi-info@bls.gov or by calling (202) 691-
7705. For more information about this update, contact Jonathan Weinhagen at 
weinhagen.jonathan@bls.gov or (202) 691-7709.

                                              *****

                                 Recent articles about the PPI

*  Measuring the substitution effect in Producer Price Index goods data 2002-16:               
   www.bls.gov/opub/mlr/2020/article/measuring-the-substitution-effect-in-ppi-data.htm.

*  The impact of the COVID-19 pandemic on food price indexes and data collection: 
   www.bls.gov/opub/mlr/2020/article/the-impact-of-the-covid-19-pandemic-on-food-price-
   indexes-and-data-collection.htm.

*  A new BLS satellite series of net inputs to industry price indexes: methodology and uses: 
   www.bls.gov/opub/mlr/2020/article/a-new-bls-satellite-series-of-net-inputs-to-industry-price-
   indexes.htm.

*  From the barrel to the pump: the impact of the COVID-19 pandemic on prices for petroleum 
   products: www.bls.gov/opub/mlr/2020/article/from-the-barrel-to-the-pump.htm.

*  The effects of tariff rates on the U.S. economy: what the Producer Price Index tells us: 
   www.bls.gov/opub/btn/volume-9/the-effects-of-tarifff-rates-on-the-u-s-economy-what-the-
   producer-price-index-tells-us.htm.

*  International cotton trade and causes of price volatility in the United States: 
   www.bls.gov/opub/btn/volume-9/international-cotton-trade-and-causes-of-price-volatility-in-
   the-united-states.htm.