Producer Price Index News Release summary

Transmission of material in this release is embargoed until                          USDL 18-1452 
8:30 a.m. (EDT), Wednesday, September 12, 2018

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                                  PRODUCER PRICE INDEXES - AUGUST 2018


The Producer Price Index for final demand declined 0.1 percent in August, seasonally adjusted, 
the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in July 
and increased 0.3 percent in June. (See table A.) On an unadjusted basis, the final demand index 
rose 2.8 percent for the 12 months ended in August.

In August, the decline in the final demand index can be attributed to a 0.1-percent decrease in 
prices for final demand services. The index for final demand goods was unchanged.

The index for final demand less foods, energy, and trade services edged up 0.1 percent in August 
after advancing 0.3 percent in both July and June. For the 12 months ended in August, prices for 
final demand less foods, energy, and trade services rose 2.9 percent.

Final demand

Final demand services: The index for final demand services inched down 0.1 percent in August, the 
same as in July. The August decrease was led by a 0.9-percent decline in the index for final demand 
trade services. (Trade indexes measure changes in margins received by wholesalers and retailers.) 
Prices for final demand transportation and warehousing services fell 0.6 percent. In contrast, the 
index for final demand services less trade, transportation, and warehousing rose 0.3 percent.

Product detail: In August, over 80 percent of the decrease in prices for final demand services can be 
traced to margins for machinery and equipment wholesaling, which fell 1.7 percent. The indexes for 
health, beauty, and optical goods retailing; application software publishing; airline passenger 
services; and hospital outpatient care also moved lower. Conversely, prices for loan services (partial) 
jumped 3.0 percent. The indexes for food retailing, bundled wired telecommunication access 
services, and physician care also rose. (See table 4.)

Final demand goods: The index for final demand goods was unchanged in August after increasing 
in each of the prior three months. In August, a 0.4-percent advance in prices for final demand energy 
offset a 0.6-percent decline in the index for final demand foods. Prices for final demand goods less 
foods and energy were unchanged. 

Product detail: In August, the index for residential electric power moved up 0.6 percent. Prices for 
fresh and dry vegetables, corn, gasoline, and passenger cars also increased. In contrast, the index for 
fresh fruits and melons dropped 11.3 percent. Prices for diesel fuel, meats, eggs for fresh use, and 
iron and steel scrap also declined.

Table A. Monthly and 12-month percent changes in selected final demand price indexes, seasonally adjusted
Month Total
final
demand
Final
demand
less
foods,
energy,
and
trade
Final demand goods Final demand services Change
in final
demand
from 12
months
ago
(unadj.)
Change
in final
demand
less
foods,
energy,
and
trade
from 12
mo. ago
(unadj.)
Total Foods Energy Less
foods
and
energy
Total Trade Transportation
and
warehousing
Other

2017

Aug.

0.3 0.1 0.5 -0.7 3.1 0.2 0.2 0.5 0.2 0.0 2.4 1.9

Sept.

0.3 0.2 0.6 -0.1 2.9 0.2 0.2 -0.2 1.3 0.1 2.6 2.1

Oct.

0.4 0.4 0.3 0.3 0.2 0.3 0.5 0.9 0.7 0.4 2.8 2.4

Nov.

0.4 0.2 0.8 0.2 3.5 0.3 0.1 -0.3 0.9 0.2 3.0 2.4

Dec.

0.0 0.1 0.1 -0.2 0.2 0.1 -0.2 -0.4 -0.6 0.2 2.5 2.3

2018

Jan.

0.5 0.5 0.6 0.1 2.9 0.3 0.5 0.4 -0.2 0.5 2.6 2.5

Feb.

0.2 0.3 0.1 -0.6 0.1 0.3 0.2 0.1 1.0 0.3 2.8 2.7

Mar.

0.2 0.3 0.3 2.2 -2.0 0.3 0.3 -0.1 0.5 0.3 2.9 2.9

Apr.(1)

0.2 0.2 0.0 -1.3 0.4 0.3 0.2 0.3 0.7 0.0 2.7 2.6

May(1)

0.5 0.1 0.9 0.3 4.2 0.2 0.3 1.0 0.8 -0.1 3.1 2.6

June

0.3 0.3 0.1 -1.1 0.8 0.3 0.4 0.7 0.5 0.3 3.4 2.7

July

0.0 0.3 0.1 -0.1 -0.5 0.3 -0.1 -0.8 0.3 0.3 3.3 2.8

Aug.

-0.1 0.1 0.0 -0.6 0.4 0.0 -0.1 -0.9 -0.6 0.3 2.8 2.9

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for April 2018 have been revised to reflect the availability of late reports and corrections by respondents.

Intermediate Demand by Commodity Type

Within intermediate demand in August, prices for processed goods were unchanged, the index for 
unprocessed goods fell 5.8 percent, and prices for services edged up 0.1 percent. (See tables B and 
C.)

Processed goods for intermediate demand: The index for processed goods for intermediate 
demand was unchanged in August, the same as in July. In August, a 0.2-percent rise in prices for 
processed materials less foods and energy offset declines of 0.8 percent for processed foods and 
feeds and 0.3 percent for processed energy goods. For the 12 months ended in August, the index for 
processed goods for intermediate demand climbed 6.3 percent.

Product detail: In August, prices for steel mill products increased 2.6 percent. The indexes for 
industrial electric power, industrial chemicals, commercial electric power, and jet fuel also moved 
higher. Conversely, meat prices decreased 1.7 percent. The indexes for diesel fuel, lumber, primary 
nonferrous metals, and natural cheese (except cottage cheese) also declined. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate 
demand fell 5.8 percent in August, the largest decrease since dropping 9.7 percent in January 2015. 
In August, 60 percent of the broad-based decline is attributable to prices for unprocessed energy 
materials, which moved down 7.9 percent. The indexes for unprocessed foodstuffs and feedstuffs and 
for unprocessed nonfood materials less energy fell 5.2 percent and 1.9 percent, respectively. For the 
12 months ended in August, prices for unprocessed goods for intermediate demand advanced 2.9 
percent.

Product detail: Over half of the August decrease in the index for unprocessed goods for intermediate 
demand can be traced to prices for crude petroleum, which dropped 13.4 percent. The indexes for 
slaughter poultry, slaughter barrows and gilts, raw milk, iron and steel scrap, and grapes also moved 
lower. In contrast, corn prices rose 11.7 percent. The indexes for hay, hayseeds, and oilseeds and for 
wastepaper also increased.

Table B. Monthly and 12-month percent changes in selected intermediate demand price indexes for goods by commodity type, seasonally adjusted
Month Processed goods for intermediate demand Unprocessed goods for intermediate demand
Total Foods
and
feeds
Energy
goods
Less
foods
and
energy
Total,
change
from 12
months
ago
(unadj.)
Total Foodstuffs
and
feedstuffs
Energy
materials
Nonfood
materials
less
energy
Total,
change
from 12
months
ago
(unadj.)

2017

Aug.

0.5 -0.3 1.4 0.4 4.1 -0.7 -3.6 1.3 1.3 7.0

Sept.

0.6 -0.8 2.5 0.3 4.5 0.5 -1.0 1.4 1.4 7.7

Oct.

0.6 0.5 1.6 0.4 4.8 0.5 1.2 1.8 -2.6 8.5

Nov.

0.8 -0.2 2.5 0.5 5.4 2.6 2.5 4.7 -0.2 11.0

Dec.

0.3 0.1 0.8 0.2 5.0 1.3 -0.7 3.3 1.8 5.0

2018

Jan.

0.8 0.1 2.1 0.5 4.7 1.9 -0.6 3.5 3.5 3.3

Feb.

0.6 1.2 0.8 0.5 4.8 1.7 2.2 2.3 0.0 5.3

Mar.

-0.1 1.0 -2.9 0.6 4.8 -3.5 -0.2 -9.2 1.2 5.3

Apr.(1)

0.4 0.3 1.1 0.3 4.8 0.9 -2.4 4.1 0.6 4.2

May(1)

1.3 0.4 4.5 0.6 6.3 1.6 -1.3 4.8 0.0 6.8

June

0.7 -1.1 1.8 0.7 6.8 -1.0 0.2 -2.1 -0.2 5.8

July

0.0 -0.9 -1.3 0.3 6.8 2.7 -2.0 8.6 -1.2 8.2

Aug.

0.0 -0.8 -0.3 0.2 6.3 -5.8 -5.2 -7.9 -1.9 2.9

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for April 2018 have been revised to reflect the availability of late reports and corrections by respondents.

Services for intermediate demand: The index for services for intermediate demand edged up 0.1 
percent in August after climbing 0.2 percent in July. The August increase was the result of a 0.5-
percent advance in the index for services less trade, transportation, and warehousing for intermediate 
demand. Conversely, margins for trade services for intermediate demand fell 1.1 percent, and prices 
for transportation and warehousing services for intermediate demand inched down 0.1 percent. For 
the 12 months ended in August, prices for services for intermediate demand rose 2.9 percent.

Product detail: Most of the August increase in the index for services for intermediate demand can be 
traced to prices for gross rents for retail properties, which advanced 5.5 percent. The indexes for loan 
services (partial), portfolio management, financial auditing, and chemicals and allied products 
wholesaling also increased. In contrast, margins for metals, minerals, and ores wholesaling declined 
10.5 percent. The indexes for tax preparation and planning; hardware, building materials, and 
supplies retailing; and airline passenger services also decreased.

Table C. Monthly and 12-month percent changes in selected intermediate demand price indexes for services by commodity type, seasonally adjusted
Month Services for intermediate demand
Total Trade Transportation
and
warehousing
Other Total, change
from 12 months
ago (unadj.)

2017

Aug.

0.2 0.3 0.2 0.2 2.8

Sept.

0.2 -0.3 0.7 0.1 2.8

Oct.

0.6 1.0 0.6 0.6 3.3

Nov.

0.2 -0.3 0.6 0.2 3.2

Dec.

0.2 0.4 -0.1 0.2 2.9

2018

Jan.

0.3 0.4 0.1 0.3 3.2

Feb.

0.3 0.6 0.6 0.3 3.1

Mar.

0.3 0.3 0.4 0.1 3.2

Apr.(1)

0.3 0.8 0.4 0.2 3.0

May(1)

0.3 1.3 0.5 0.1 3.3

June

0.1 0.1 0.2 0.0 2.9

July

0.2 -0.7 0.2 0.3 3.0

Aug.

0.1 -1.1 -0.1 0.5 2.9

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for April 2018 have been revised to reflect the availability of late reports and corrections by respondents.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand were unchanged in August 
following a 0.1-percent decline in July. In August, the index for total services inputs to stage 4 
intermediate demand rose 0.2 percent. Conversely, prices for total goods inputs edged down 0.1 
percent. (See table D.) Increases in the indexes for gross rents for retail properties, loan services 
(partial), portfolio management, chemicals and allied products wholesaling, and corn were offset by 
declines in the indexes for diesel fuel; metals, minerals, and ores wholesaling; grapes; lumber; and 
hardware, building materials, and supplies retailing. (See table 6.) For the 12 months ended in 
August, prices for stage 4 intermediate demand climbed 3.5 percent.

Stage 3 intermediate demand: The index for stage 3 intermediate demand declined 0.8 percent in 
August, the largest decrease since falling 0.8 percent in February 2016. In August, prices for total 
goods inputs to stage 3 intermediate demand moved down 1.5 percent. In contrast, the index for total 
services inputs edged up 0.1 percent. Declines in the indexes for slaughter poultry; slaughter barrows 
and gilts; raw milk; metals, minerals, and ores wholesaling; diesel fuel; and tax preparation and 
planning outweighed increases in prices for gross rents for retail properties, steel mill products, and 
jet fuel. For the 12 months ended in August, the index for stage 3 intermediate demand increased 4.3 
percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand fell 1.2 percent in 
August, the largest decline since a 1.2-percent decrease in March. In August, prices for total goods 
inputs to stage 2 intermediate demand moved down 2.8 percent. Conversely, the index for total 
services inputs inched up 0.1 percent. Declines in the indexes for crude petroleum; natural gas; tax 
preparation and planning; lumber; hardware, building materials, and supplies retailing; and airline 
passenger services outweighed advances in prices for financial auditing; hay, hayseeds, and oilseeds; 
and corn. For the 12 months ended in August, the index for stage 2 intermediate demand rose 5.4 
percent.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand declined 0.5 percent in 
August, the first decrease since falling 0.6 percent in August 2016. In August 2018, the index for 
total goods inputs to stage 1 intermediate demand dropped 0.8 percent, and prices for total services 
inputs moved down 0.2 percent. Declines in the indexes for diesel fuel; metals, minerals, and ores 
wholesaling; iron and steel scrap; nonferrous scrap; crude petroleum; and airline passenger services 
outweighed higher prices for wastepaper, corn, and loan services (partial). For the 12 months ended 
in August, the index for stage 1 intermediate demand increased 5.9 percent.

Table D. Monthly percent changes in selected intermediate demand price indexes by production flow, seasonally adjusted
Month Stage 4 intermediate
demand
Stage 3 intermediate
demand
Stage 2 intermediate
demand
Stage 1 intermediate
demand
Total Goods
inputs
Services
inputs
Total Goods
inputs
Services
inputs
Total Goods
inputs
Services
inputs
Total Goods
inputs
Services
inputs

2017

Aug.

0.3 0.3 0.3 0.4 0.5 0.2 0.2 0.5 0.0 0.7 1.1 0.2

Sept.

0.2 0.3 0.2 0.4 0.7 0.2 0.6 1.3 0.2 0.6 1.0 0.2

Oct.

0.5 0.4 0.7 0.8 0.8 0.7 0.7 0.8 0.5 0.5 0.3 0.9

Nov.

0.4 0.6 0.2 1.0 1.8 0.1 1.0 1.7 0.3 0.7 1.4 -0.1

Dec.

0.1 0.1 0.1 0.3 0.3 0.3 0.6 1.3 0.1 0.5 0.9 0.0

2018

Jan.

0.5 0.8 0.3 0.6 1.0 0.3 0.9 1.5 0.5 1.1 1.9 0.2

Feb.

0.3 0.2 0.3 0.7 1.0 0.3 0.8 1.4 0.3 0.3 0.3 0.3

Mar.

0.3 0.5 0.2 -0.3 -0.7 0.2 -1.2 -3.1 0.3 0.0 -0.2 0.3

Apr.(1)

0.3 0.3 0.3 0.1 -0.3 0.3 0.8 1.9 0.2 0.4 0.5 0.3

May(1)

0.7 0.9 0.5 1.0 1.6 0.5 1.0 2.4 -0.1 1.1 1.3 0.9

June

0.3 0.5 0.0 0.5 1.1 0.0 -0.1 -0.5 0.2 0.7 1.1 0.1

July

-0.1 -0.1 -0.1 0.0 0.0 0.0 1.4 2.9 0.3 0.2 0.1 0.3

Aug.

0.0 -0.1 0.2 -0.8 -1.5 0.1 -1.2 -2.8 0.1 -0.5 -0.8 -0.2

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for April 2018 have been revised to reflect the availability of late reports and corrections by respondents.

________________
The Producer Price Index for September 2018 is scheduled to be released on Wednesday, 
October 10, 2018 at 8:30 a.m. (EDT).

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Last Modified Date: September 12, 2018