Producer Price Index News Release summary

Transmission of material in this release is embargoed until                          USDL 18-0038 
8:30 a.m. (EST), Thursday, January  11, 2018

Technical information:      (202) 691-7705  *  ppi-info@bls.gov  *  www.bls.gov/ppi
Media contact:              (202) 691-5902  *  PressOffice@bls.gov                                    


                              PRODUCER PRICE INDEXES - DECEMBER 2017


The Producer Price Index for final demand fell 0.1 percent in December, seasonally adjusted, the 
U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.4 percent in both 
November and October. (See table A.) On an unadjusted basis, the final demand index climbed 
2.6 percent in 2017 after a 1.7-percent rise in 2016.

Most of the December decline in the final demand index is attributable to a 0.2-percent decrease 
in prices for final demand services. The index for final demand goods was unchanged.

Prices for final demand less foods, energy, and trade services edged up 0.1 percent in December 
after rising 0.4 percent in November. In 2017, the index for final demand less foods, energy, and 
trade services climbed 2.3 percent following a 1.8-percent advance in 2016.

Final Demand

Final demand services: The index for final demand services moved down 0.2 percent in December 
following nine consecutive increases. Most of the decrease can be traced to a 0.6-percent decline in 
margins 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 0.4 
percent. Conversely, the index for final demand services less trade, transportation, and warehousing 
inched up 0.1 percent.

Product detail: A major factor in the December decline in prices for final demand services was the 
index for automotive fuels and lubricants retailing, which fell 10.7 percent. The indexes for loan 
services (partial); airline passenger services; apparel, footwear, and accessories retailing; legal 
services; and health, beauty, and optical goods retailing also moved lower. In contrast, prices for 
inpatient care advanced 0.7 percent. The indexes for truck transportation of freight and apparel 
wholesaling also increased. (See table 4.)

Final demand goods: Prices for final demand goods were unchanged in December following a 1.0-
percent increase in November. The index for final demand less foods and energy advanced 0.2 
percent. Conversely, prices for final demand foods declined 0.7 percent. The index for final demand 
energy was unchanged.

Product detail: In December, prices for basic organic chemicals advanced 3.9 percent. The indexes 
for jet fuel, diesel fuel, home heating oil, and processed young chickens also moved higher. In 
contrast, prices for beef and veal fell 6.3 percent. The indexes for gasoline, fresh and dry vegetables, 
liquefied petroleum gas, and turbines and turbine generator sets also moved lower.

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

2016

Dec.

0.2 0.3 0.6 0.8 1.9 0.3 0.0 -0.4 1.1 0.1 1.7 1.8

2017

Jan.

0.6 0.1 1.0 0.6 4.0 0.4 0.4 1.2 0.0 0.1 1.7 1.7

Feb.

0.0 0.3 0.4 0.7 0.9 0.2 -0.3 -1.2 0.4 0.2 2.0 1.8

Mar.

0.0 0.0 -0.1 0.8 -2.9 0.4 0.2 0.4 -1.0 0.1 2.2 1.8

Apr.

0.5 0.6 0.5 1.2 0.5 0.3 0.5 0.4 0.9 0.5 2.5 2.0

May

0.0 0.0 -0.5 -0.7 -2.6 0.0 0.3 0.7 -0.3 0.2 2.3 2.1

June

0.0 0.2 -0.1 0.5 -1.0 0.1 0.1 -0.3 0.3 0.2 1.9 2.1

July

0.1 0.1 -0.1 -0.3 -0.2 -0.1 0.1 0.3 -0.5 0.2 2.0 2.0

Aug.(1)

0.4 0.1 0.6 -0.5 3.3 0.3 0.2 0.4 0.2 0.0 2.4 1.9

Sept.(1)

0.3 0.2 0.6 -0.5 3.6 0.2 0.2 0.1 0.9 0.2 2.6 2.1

Oct.

0.4 0.2 0.3 0.5 0.0 0.3 0.5 1.1 0.8 0.1 2.8 2.3

Nov.

0.4 0.4 1.0 0.3 4.6 0.3 0.2 -0.3 0.6 0.4 3.1 2.4

Dec.

-0.1 0.1 0.0 -0.7 0.0 0.2 -0.2 -0.6 -0.4 0.1 2.6 2.3

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for August 2017 have been revised to reflect the availability of late reports and corrections by respondents.

Intermediate Demand by Commodity Type

Within intermediate demand in December, prices for processed goods increased 0.5 percent, the 
index for unprocessed goods rose 2.1 percent, and prices for services edged down 0.1 percent. (See 
tables B and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate 
demand climbed 0.5 percent in December, the fifth straight increase. Seventy percent of the 
December rise is attributable to a 0.5-percent advance in prices for processed materials less foods and 
energy. The index for processed energy goods also moved higher, increasing 0.8 percent. 
Conversely, prices for processed foods and feeds inched down 0.1 percent. In 2017, the index for 
processed goods for intermediate demand climbed 5.1 percent, compared with a 1.8-percent advance 
in 2016.  

Product detail: In December, a major factor in the rise in the index for processed goods for 
intermediate demand was prices for plastic resins and materials, which increased 3.1 percent. The 
indexes for basic organic chemicals, diesel fuel, jet fuel, residual fuels, and prepared animal feeds 
also moved higher. In contrast, beef and veal prices fell 6.3 percent. The indexes for gasoline and 
plastic construction products also declined. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate 
demand increased 2.1 percent in December following a 3.2-percent rise in November. Nearly three-
fourths of the broad-based December advance is attributable to prices for unprocessed energy 
materials, which climbed 4.7 percent. The indexes for unprocessed nonfood materials less energy and 
for unprocessed foodstuffs and feedstuffs also moved higher, increasing 1.4 percent and 0.5 percent, 
respectively. In 2017, prices for unprocessed goods for intermediate demand rose 5.2 percent after 
advancing 13.0 percent in 2016.

Product detail: Over half of the December increase in the index for unprocessed goods for 
intermediate demand can be traced to natural gas prices, which jumped 13.7 percent. The indexes for 
carbon steel scrap, crude petroleum, raw milk, slaughter barrows and gilts, and slaughter steers and 
heifers also moved higher. Conversely, corn prices decreased 3.3 percent. The indexes for fresh 
vegetables (except potatoes) and nonferrous scrap also moved lower.  

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.)

2016

Dec.

0.6 1.3 1.3 0.4 1.8 7.3 4.8 13.4 3.4 13.0

2017

Jan.

1.2 0.5 5.4 0.3 4.0 3.8 2.1 6.7 3.3 17.4

Feb.

0.7 0.4 0.8 0.7 5.4 -0.1 2.6 -4.2 1.0 19.2

Mar.

-0.3 0.3 -3.3 0.4 5.3 -3.4 -0.6 -11.0 2.0 13.4

Apr.

0.5 -0.5 1.4 0.4 5.4 1.6 -1.6 7.8 -0.6 12.8

May

-0.1 0.5 -0.4 -0.1 4.6 -1.0 1.7 -4.3 -0.7 8.5

June

0.1 0.8 -0.1 0.1 3.8 0.1 1.0 -1.5 0.6 5.8

July

-0.1 -0.5 0.3 -0.2 3.6 0.7 1.3 -0.5 1.4 6.0

Aug.(1)

0.5 -0.3 1.2 0.4 4.1 -1.2 -4.6 1.3 1.3 7.0

Sept.(1)

0.5 -1.0 3.0 0.1 4.3 -0.5 -2.7 0.4 1.4 7.0

Oct.

1.0 0.8 1.8 0.8 5.0 0.0 0.4 2.1 -3.7 7.7

Nov.

0.5 0.3 1.7 0.3 5.3 3.2 2.7 5.5 0.8 10.6

Dec.

0.5 -0.1 0.8 0.5 5.1 2.1 0.5 4.7 1.4 5.2

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for August 2017 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 down 0.1 
percent in December after a 0.7-percent jump in November. The decrease can be traced to prices for 
services less trade, transportation, and warehousing for intermediate demand, which fell 0.1 percent. 
The intermediate demand indexes for both trade services and for transportation and warehousing 
services were unchanged. In 2017, prices for services for intermediate demand increased 2.9 percent 
after rising 2.6 percent in 2016.

Product detail: Leading the December decrease in the index for services for intermediate demand, 
prices for loan services (partial) dropped 5.4 percent. The indexes for legal services, airline passenger 
services, machinery and equipment parts and supplies wholesaling, and staffing services also moved 
lower. In contrast, prices for securities brokerage, dealing, investment advice, and related services 
increased 1.4 percent. The indexes for television advertising time sales; metals, minerals, and ores 
wholesaling; and truck transportation of freight also rose.

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.)

2016

Dec.

0.2 1.1 0.7 -0.2 2.6

2017

Jan.

0.4 0.2 0.1 0.5 1.7

Feb.

0.4 1.1 0.6 0.3 2.1

Mar.

0.0 0.4 -0.1 -0.1 2.0

Apr.

0.5 0.6 0.3 0.5 2.5

May

0.0 0.3 0.0 0.0 2.7

June

0.5 0.1 0.2 0.6 2.8

July

-0.1 0.0 -0.1 -0.1 2.2

Aug.(1)

0.4 0.4 0.2 0.4 2.8

Sept.(1)

-0.2 -0.6 0.4 -0.2 2.7

Oct.

0.3 0.5 0.5 0.2 2.9

Nov.

0.7 1.0 0.5 0.6 3.2

Dec.

-0.1 0.0 0.0 -0.1 2.9

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for August 2017 have been revised to reflect the availability of late reports and corrections by respondents.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand declined 0.2 percent in 
December following a 0.6-percent jump in November. In December, prices for total services inputs 
to stage 4 intermediate demand fell 0.3 percent, and the index for total goods inputs was unchanged. 
(See table D.) Decreases in the indexes for loan services (partial), legal services, machinery and 
equipment parts and supplies wholesaling, gasoline, plastic construction products, and beef and veal 
outweighed rising prices for diesel fuel; portfolio management; and securities brokerage, dealing, 
investment advice, and related services. (See table 6.) In 2017, the index for stage 4 intermediate 
demand increased 3.3 percent after climbing 1.7 percent in 2016.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand moved up 0.5 percent in 
December, the fifth consecutive rise. In December, the index for total goods inputs to stage 3 
intermediate demand climbed 1.0 percent, and prices for total services inputs were unchanged. 
Increases in the indexes for jet fuel; raw milk; basic organic chemicals; slaughter barrows and gilts; 
and securities brokerage, dealing, investment advice, and related services outweighed decreases in 
the indexes for gasoline, loan services (partial), and machinery and equipment parts and supplies 
wholesaling. In 2017, prices for stage 3 intermediate demand advanced 4.8 percent following a 2.0-
percent rise in 2016.

Stage 2 intermediate demand: The index for stage 2 intermediate demand increased 0.9 percent in 
December, the sixth straight advance. In December, prices for total goods inputs to stage 2 
intermediate demand advanced 1.8 percent, and the index for total services inputs was unchanged. 
Higher prices for natural gas; plastic resins and materials; crude petroleum; cable network advertising 
time sales; securities brokerage, dealing, investment advice, and related services; and basic organic 
chemicals outweighed declines in the indexes for legal services, airline passenger services, and 
liquefied petroleum gas. In 2017, prices for stage 2 intermediate demand increased 3.8 percent after 
advancing 6.4 percent in 2016.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand moved up 0.7 percent in 
December, the same as in November. In December, the index for total goods inputs to stage 1 
intermediate demand advanced 1.4 percent. Conversely, prices for total services inputs fell 0.4 
percent. Higher prices for basic organic chemicals; carbon steel scrap; diesel fuel; deposit services 
(partial); natural gas; and securities brokerage, dealing, investment advice, and related services 
outweighed decreases in the indexes for loan services (partial), airline passenger services, and 
gasoline. In 2017, prices for stage 1 intermediate demand climbed 5.8 percent following a 4.4-
percent advance in 2016.

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

2016

Dec.

0.4 0.4 0.3 1.2 2.2 0.2 2.0 4.5 0.3 1.4 2.1 0.4

2017

Jan.

0.6 0.8 0.5 1.1 1.8 0.3 1.3 2.5 0.4 1.3 2.1 0.4

Feb.

0.5 0.5 0.5 0.9 1.4 0.5 0.0 -0.3 0.3 0.7 0.9 0.4

Mar.

-0.1 0.1 -0.1 -0.1 -0.4 0.1 -1.5 -3.6 0.1 0.0 0.3 -0.3

Apr.

0.5 0.3 0.7 -0.1 -0.5 0.4 1.3 2.5 0.4 0.3 -0.1 0.9

May

0.0 0.0 0.1 0.0 -0.2 0.1 -0.4 -1.3 0.2 -0.2 -0.2 -0.2

June

0.4 0.2 0.4 0.3 0.3 0.4 -0.1 -0.7 0.4 0.3 -0.2 0.8

July

0.0 0.1 -0.2 -0.1 -0.4 0.1 0.1 0.4 0.0 0.2 0.4 -0.2

Aug.(1)

0.3 0.3 0.4 0.3 0.2 0.3 0.2 0.3 0.0 0.8 1.2 0.4

Sept.(1)

0.0 0.2 -0.2 0.1 0.3 -0.1 0.2 0.6 0.0 0.3 0.7 -0.3

Oct.

0.5 0.6 0.3 0.4 0.7 0.3 1.0 1.5 0.5 0.6 0.7 0.5

Nov.

0.6 0.5 0.8 1.4 2.1 0.7 1.1 1.9 0.5 0.7 0.7 0.8

Dec.

-0.2 0.0 -0.3 0.5 1.0 0.0 0.9 1.8 0.0 0.7 1.4 -0.4

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for August 2017 have been revised to reflect the availability of late reports and corrections by respondents.

________________
The Producer Price Index for January 2018 is scheduled to be released on Thursday, 
February 15, 2018 at 8:30 a.m. (EST).



                                        *****

      Recalculated Seasonal Adjustment Factors and Relative Importance Figures to be 
                           Available on February 13, 2018

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 13, 2018 (2 workdays 
prior to the release of PPI data for January 2018 on February 15, 2018):

*  Direct seasonal factors for PPI commodity indexes for the year 2018,
*  Recalculated seasonal factors for the last 5 years (2013-2017) for PPI commodity indexes, 
*  Recalculated seasonal factors for the last 5 years (2013-2017) for PPI Final Demand-
   Intermediate Demand indexes, 
*  Recalculated seasonal index data for the last 5 years (2013-2017) 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 2017, 
will be available on February 13, 2018:  

*  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 Weights to be Updated
 
In February 2018, with the release of January 2018 Producer Price Index (PPI) data, the Bureau of 
Labor Statistics will update PPI value weights to more accurately reflect recent production and 
marketing patterns. The updated weights will be based on shipment values from the year 2012. These 
value weights come from the Census of Manufactures, the Census of Mining, the Census of Services, 
and the Census of Agriculture. PPI weights have been based on 2007 Census shipment values since 
January 2012.
 
All PPIs will be affected by this weight update, including all the industry net output indexes, as well 
as indexes for traditional commodity groupings. In addition, weights will be updated from the 2007 
to the 2012 Census for all Final demand-Intermediate demand (FD-ID) indexes, durability of product 
indexes, special commodity-grouping indexes, and input to industry indexes. This weight revision 
will not change any arithmetic reference bases for indexes, the dates when PPIs were set to 100.
 
It is important to note that the basic structures of the PPI commodity and FD-ID classification 
systems will not change as a result of the weight revision. The PPIs classified according to the North 
American Industry Classification System (NAICS), however, will be updated to reflect 2017 NAICS 
definitions, as established by the U.S. Census Bureau. The weight update will also result in 
significant shifts in the relative importance of various industries and products. These shifts will 
impact aggregate indexes in a manner commensurate with the relative gains and losses in value 
weights from 2007 to 2012.
 
In addition, the PPI sample updates normally occurring with the release of October and February data 
will be combined and released in conjunction with the weight update in February 2018. Commodity 
and FD-ID relative importance figures for December 2017 will be available two business days prior 
to the release of January 2018 PPI data. 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. 

                                      *****



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Last Modified Date: January 11, 2018