Economic News Release

Producer Price Index News Release text

Transmission of material in this release is embargoed until                          USDL-14-2104
8:30 a.m. (EST), Tuesday, November 18, 2014

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 2014


The Producer Price Index for final demand rose 0.2 percent in October, seasonally adjusted, the 
U.S. Bureau of Labor Statistics reported today. This increase followed a 0.1-percent decline in 
September and no change in August. On an unadjusted basis, the index for final demand 
advanced 1.5 percent for the 12 months ended in October, the smallest 12-month increase since a 
1.2-percent rise in February 2014. (See table A.)

In October, the 0.2-percent rise in final demand prices can be traced to the index for final 
demand services, which advanced 0.5 percent. In contrast, prices for final demand goods moved 
down 0.4 percent.

Within intermediate demand, prices for processed goods declined 0.9 percent, the index for 
unprocessed goods fell 2.4 percent, and prices for services inched up 0.1 percent. (See tables B 
and C.)

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

2013

Oct.

0.3 0.1 0.3 0.0 0.0 0.3 0.2 0.3 0.3 1.3

Nov.

0.0 -0.1 -0.2 -0.6 0.1 0.0 0.2 -0.5 0.1 1.1

Dec.

0.0 0.4 -0.2 1.2 0.4 -0.2 -1.0 1.6 0.1 1.2

2014

Jan.

0.3 0.5 0.7 0.6 0.5 0.1 0.0 -0.9 0.2 1.3

Feb.

0.2 0.2 0.7 -0.3 0.2 0.3 0.6 -0.4 0.1 1.2

Mar.

0.3 0.1 1.3 -0.2 -0.1 0.4 0.6 0.4 0.3 1.6

Apr.

0.2 0.4 2.6 -0.2 0.2 0.0 -0.3 0.8 0.1 1.8

May

0.2 0.0 -0.3 0.0 0.1 0.3 0.8 0.5 0.0 2.1

June(1)

0.2 0.5 -0.1 2.0 0.1 0.0 -0.5 0.5 0.2 1.8

July(1)

0.2 -0.1 0.1 -0.8 0.2 0.3 0.6 0.5 0.1 1.7

Aug.

0.0 -0.3 -0.5 -1.5 0.0 0.3 0.0 0.3 0.3 1.8

Sept.

-0.1 -0.2 -0.7 -0.7 0.2 -0.1 0.0 -0.2 -0.1 1.6

Oct.

0.2 -0.4 1.0 -3.0 -0.1 0.5 1.5 -0.1 0.1 1.5

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for June 2014 have been revised to reflect the availability of late reports and corrections by respondents.

Final Demand

(Final demand includes goods, services, and construction which are sold for personal 
consumption, capital investment, government purchases, and export. See table 4 for product 
detail.)

Final demand services:  The index for final demand services moved up 0.5 percent in October, 
the largest increase since a 0.5-percent rise in July 2013. The October advance can be traced to a 
1.5-percent increase in margins for final demand trade services. (Trade indexes measure changes 
in margins received by wholesalers and retailers.) Prices for final demand services less trade, 
transportation, and warehousing inched up 0.1 percent. Conversely, the index for final demand 
transportation and warehousing services edged down 0.1 percent. 

Product detail:  In October, a 26.1-percent jump in margins for fuels and lubricants retailing 
accounted for nearly 40 percent of the increase in the index for final demand services.  The 
indexes for machinery, equipment, parts, and supplies wholesaling; food and alcohol retailing; 
food and alcohol wholesaling; inpatient care; and traveler accommodation services also moved 
higher. In contrast, prices for airline passenger services declined 0.7 percent. The indexes for 
loan services (partial) and for chemicals and allied products wholesaling also decreased. (See 
table 4.)

Final demand goods:  The index for final demand goods moved down 0.4 percent in October, the 
fourth consecutive decrease. The October decline was led by prices for final demand energy, which 
fell 3.0 percent. The index for final demand goods less foods and energy edged down 0.1 percent. 
Conversely, prices for final demand foods moved up 1.0 percent.  

Product detail:  Over 80 percent of the October decline in prices for final demand goods can be 
attributed to the index for gasoline, which dropped 5.8 percent. Prices for liquefied petroleum gas, 
prepared animal feeds, home heating oil, diesel fuel, and ethanol also moved lower. In contrast, the 
index for meats increased 5.3 percent. Prices for electric power, pharmaceutical preparations, and 
passenger cars also advanced. (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 2015 Model Vehicles, at www.bls.gov/web/ppi/ppimotveh.htm.)

Special grouping, Final demand less foods, energy, and trade:  The index for final demand less 
foods, energy, and trade services edged up 0.1 percent in October after inching down 0.1 percent a 
month earlier. For the 12 months ended in October, prices for final demand less foods, energy, and 
trade services rose 1.6 percent. (The index for final demand less foods, energy, and trade services 
represents about two-thirds of final demand.)

Special grouping, Finished goods:  Prices for finished goods moved down 0.3 percent in October, 
the third consecutive decrease. (The finished goods index represents about two-thirds of final 
demand goods, through the exclusion of the weight for government purchases and exports. The 
finished goods index represents about one-quarter of overall final demand.) The October decline was 
led by the index for finished consumer energy goods, which dropped 2.7 percent. Conversely, the 
index for finished consumer foods rose 1.4 percent, and prices for finished goods less foods and 
energy edged up 0.1 percent. Within finished goods, falling prices for gasoline, liquefied petroleum 
gas, home heating oil, alcoholic beverages, residential natural gas, and butter outweighed rising 
prices for meats, residential electric power, and passenger cars.

Intermediate Demand

(Intermediate demand includes goods, services, and maintenance and repair construction sold to 
businesses, excluding capital investment. BLS publishes two parallel treatments of intermediate 
demand, each constructed from the identical set of commodity price indexes. The first treatment 
organizes commodities according to commodity type, and the second organizes commodities using a 
stage-based, production flow model. See the technical note for more information.)

Intermediate Demand by Commodity Type

Processed goods for intermediate demand:  The index for processed goods for intermediate 
demand moved down 0.9 percent in October, the largest decrease since a 1.1-percent decline in 
March 2013. The broad-based decrease in October was led by the index for processed energy goods, 
which fell 3.2 percent. Prices for processed foods and feeds and for processed materials less foods 
and energy moved down 1.8 percent and 0.2 percent, respectively. For the 12 months ended in 
October, the index for processed goods for intermediate demand rose 0.4 percent. (See table B.)

Product detail:  In October, a major contributor to the decline in prices for processed goods for 
intermediate demand was the index for lubricating oil base stocks, which dropped 12.4 percent. 
Prices for gasoline, prepared animal feeds, diesel fuel, ethanol, and jet fuel also moved lower. In 
contrast, the index for electric power advanced 0.7 percent. Prices for meats and for asphalt and tar 
based roofing and siding products also moved up in October. (See table 5.)

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.)

2013

Oct.

-0.1 -1.8 0.0 0.1 -0.8 -0.5 1.1 -1.8 -0.6 -0.5

Nov.

-0.3 -0.9 -0.9 -0.1 -0.4 -1.7 -0.6 -4.0 1.0 -3.0

Dec.

0.4 0.7 1.2 0.1 0.1 2.2 -0.6 5.3 1.1 -1.9

2014

Jan.

0.7 1.2 1.5 0.4 0.5 0.9 3.6 -1.7 1.8 -0.5

Feb.

0.3 1.0 0.2 0.4 -0.2 5.1 0.6 13.4 -1.2 5.1

Mar.

0.0 1.3 -0.4 -0.2 0.7 -0.2 7.2 -6.4 -0.5 5.3

Apr.

0.0 3.1 -1.5 0.2 1.5 0.8 3.6 -2.5 1.6 6.5

May

0.0 -0.3 0.1 -0.1 1.4 -0.3 -2.5 1.9 -0.3 4.2

June(1)

0.3 0.3 1.1 0.1 1.5 -0.9 -2.7 1.0 -1.4 3.7

July(1)

0.1 -0.2 0.0 0.3 1.6 -2.5 -0.4 -5.8 0.1 0.9

Aug.

-0.3 -0.8 -1.7 0.2 1.3 -3.3 -3.4 -4.9 -0.7 -0.8

Sept.

0.1 0.6 -0.5 0.2 1.3 0.6 2.4 -1.1 0.5 -0.2

Oct.

-0.9 -1.8 -3.2 -0.2 0.4 -2.4 1.0 -5.5 -2.9 -1.9

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for June 2014 have been revised to reflect the availability of late reports and corrections by respondents.

Unprocessed goods for intermediate demand:  The index for unprocessed goods for 
intermediate demand fell 2.4 percent in October following a 0.6-percent advance in September. 
Leading the decline in prices for unprocessed goods for intermediate demand, the index for 
unprocessed energy materials decreased 5.5 percent. Prices for unprocessed nonfood materials 
less energy moved down 2.9 percent. Conversely, the index for unprocessed foodstuffs and 
feedstuffs rose 1.0 percent. For the 12 months ended in October, the index for unprocessed goods 
for intermediate demand fell 1.9 percent, the largest 12-month decrease since a 1.9-percent 
decline in December 2013.

Product detail:  Most of the October decline in the index for unprocessed goods for intermediate 
demand can be attributed to a 9.8-percent drop in prices for crude petroleum. The indexes for 
iron and steel scrap; nonferrous scrap; nonferrous metal ores; hay, hayseeds, and oilseeds; and 
natural gas also moved lower. In contrast, prices for slaughter poultry rose 3.5 percent in 
October. The indexes for coal and industrial sand also moved higher.

Services for intermediate demand:  The index for services for intermediate demand edged up 
0.1 percent in October after no change in September. In October, almost 90 percent of the 
advance can be traced to a 0.8-percent increase in prices for trade services for intermediate 
demand. The index for services less trade, transportation, and warehousing for intermediate 
demand inched up 0.1 percent. Prices for transportation and warehousing services for 
intermediate demand were unchanged. For the 12 months ended in October, the index for 
services for intermediate demand rose 1.6 percent. (See table C.)

Product detail:  A 1.4-percent rise in margins for machinery and equipment parts and supplies 
wholesaling was a major contributor to the October advance in prices for services for 
intermediate demand. The indexes for management consulting services; metals, minerals, and 
ores wholesaling; fuels and lubricants retailing; and temporary help services also increased. 
Conversely, prices for portfolio management fell 1.4 percent in October. The indexes for loan 
services (partial), chemicals and allied products wholesaling, 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.)

2013

Oct.

0.2 -0.3 0.3 0.2 1.2

Nov.

0.2 0.8 0.0 0.1 0.9

Dec.

-0.2 -0.5 0.5 -0.2 1.0

2014

Jan.

0.3 -0.2 -0.3 0.6 1.1

Feb.

0.2 0.1 0.9 0.0 1.4

Mar.

0.4 0.3 0.2 0.4 1.7

Apr.

-0.2 -1.1 0.3 -0.1 1.0

May

-0.1 1.0 0.3 -0.4 1.5

June(1)

0.2 -0.3 0.3 0.3 1.3

July(1)

0.5 0.9 0.5 0.4 1.7

Aug.

0.2 -0.2 0.2 0.3 1.6

Sept.

0.0 0.2 0.1 -0.2 1.5

Oct.

0.1 0.8 0.0 0.1 1.6

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for June 2014 have been revised to reflect the availability of late reports and corrections by respondents.

Intermediate Demand by Production Flow

Stage 4 intermediate demand (The stage 4 intermediate demand index measures price 
changes for products purchased by industries that primarily produce output sold to final 
demand.):  The index for stage 4 intermediate demand declined 0.2 percent in October following 
no change in both September and August. In October, prices for total goods inputs to stage 4 
intermediate demand fell 0.5 percent. In contrast, the index for total services inputs edged up 0.1 
percent. (See table D.) Decreasing prices for gasoline, jet fuel, loans services (partial), prepared 
animal feeds, diesel fuel, and portfolio management outweighed increases in the indexes for 
machinery and equipment parts and supplies wholesaling, meats, and management consulting 
services. (See table 6.) For the 12 months ended in October, prices for stage 4 intermediate 
demand advanced 1.0 percent, the smallest 12-month rise since a 0.6-percent increase in 
February 2014.

Stage 3 intermediate demand (The stage 3 intermediate demand index measures price 
changes for products purchased by industries that primarily produce output sold to industries 
classified in stage 4.):  Prices for stage 3 intermediate demand moved down 0.2 percent in 
October after climbing 0.4 percent in September. In October, the index for total goods inputs to 
stage 3 intermediate demand decreased 0.4 percent. Conversely, prices for total services inputs 
rose 0.2 percent. Declines in the indexes for gasoline, loan services (partial), diesel fuel, 
lubricating oil base stocks, prepared animal feeds, and residual fuels outweighed higher prices 
for management consulting services, slaughter poultry, and slaughter steers and heifers. For the 
12 months ended in October, the index for stage 3 intermediate demand increased 2.9 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

2013

Oct.

0.2 0.0 0.3 0.2 0.4 -0.1 -0.9 -1.4 -0.2 -0.1 -0.4 0.5

Nov.

0.0 -0.3 0.2 0.1 -0.1 0.2 -1.3 -2.5 0.3 0.2 0.2 0.2

Dec.

0.1 0.4 -0.1 0.0 0.2 -0.1 1.4 2.8 -0.3 0.5 0.8 0.0

2014

Jan.

0.3 0.5 0.2 1.1 1.5 0.5 0.3 0.1 0.6 1.2 2.1 0.1

Feb.

0.2 0.1 0.1 0.4 0.6 0.4 3.8 6.3 0.3 0.0 -0.2 0.3

Mar.

0.3 0.2 0.6 1.0 1.6 0.2 -2.0 -3.5 0.0 -0.3 -1.0 0.5

Apr.

0.0 0.2 -0.3 0.3 0.6 -0.1 -0.4 -0.4 -0.3 -0.2 -0.1 -0.3

May

0.0 0.0 0.0 -0.4 -0.8 0.0 0.3 0.6 0.0 -0.3 -0.2 -0.3

June(1)

0.2 0.2 0.2 0.1 0.1 0.2 0.2 0.2 0.1 0.3 0.4 0.4

July(1)

0.3 0.0 0.5 0.7 0.8 0.4 -1.5 -2.9 0.4 0.7 0.6 0.7

Aug.

0.0 -0.2 0.1 -0.7 -1.3 0.2 -1.4 -2.5 0.1 -0.2 -0.4 0.3

Sept.

0.0 0.1 0.1 0.4 0.9 -0.2 -0.3 -0.4 -0.1 0.2 0.1 0.2

Oct.

-0.2 -0.5 0.1 -0.2 -0.4 0.2 -2.1 -4.0 0.5 -0.8 -1.5 0.2

Footnotes
(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for June 2014 have been revised to reflect the availability of late reports and corrections by respondents.

Stage 2 intermediate demand (The stage 2 intermediate demand index measures price 
changes for products purchased by industries that primarily produce output sold to industries 
classified in stage 3.):  The index for stage 2 intermediate demand fell 2.1 percent in October, 
the fourth straight decrease. In October, prices for total goods inputs to stage 2 intermediate 
demand dropped 4.0 percent. In contrast, the index for total services inputs advanced 0.5 percent. 
Lower prices for crude petroleum, prepared animal feeds, gas fuels, loan services (partial), 
ethanol, and lubricating oil base stocks outweighed increasing indexes for management 
consulting services; metals, minerals, and ores wholesaling; and corn. For the 12 months ended 
in October, prices for stage 2 intermediate demand declined 2.9 percent, the largest 12-month 
decrease since a 6.2-percent drop in July 2012.

Stage 1 intermediate demand (The stage 1 intermediate demand index measures price 
changes for products purchased by industries that primarily produce output sold to industries 
classified in stage 2.):  Prices for stage 1 intermediate demand declined 0.8 percent in October, 
the largest decrease since a  0.8-percent drop in April 2013. In October, the index for total goods 
inputs to stage 1 intermediate demand fell 1.5 percent. Conversely, prices for total services 
inputs rose 0.2 percent. Decreasing indexes for iron and steel scrap, gasoline, nonferrous scrap, 
lubricating oil base stocks, chemical and allied products wholesaling, and portfolio management 
outweighed increases in the indexes for traveler accommodation services, electric power, and 
fuels and lubricants retailing. For the 12 months ended in October, prices for stage 1 intermediate 
demand moved up 1.4 percent, the smallest 12-month advance since a 1.1-percent rise in March 
2014.
____________
The Producer Price Index for November 2014 is scheduled to be released on Friday, 
December 12, 2014 at 8:30 a.m. (EST).


                                          *****

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

Effective with the release of data for January 2015 on February 18, 2015, 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 2007 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 2007 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, or the FD-ID aggregation structure. It may, however, result in significant 
shifts in the relative importance figures of commodity components that make up the FD-ID 
indexes.

Relative importance figures as of December 2014, which will detail this shift from 2002 to 2007 
input-output relationships, will be available on February 13, 2015 on the BLS website at 
www.bls.gov/ppi. This information also may be requested from the Division of Industrial Prices 
and Price Indexes, Section of Index Analysis and Public Information through e-mail to ppi-
info@bls.gov or by calling (202) 691-7705. For further information on this update, contact 
Jonathan Weinhagen at weinhagen.jonathan@bls.gov or (202) 691-7709.                         

                                          *****

       Recalculated Seasonal Adjustment Factors and Relative Importance Figures to be 
                                Available on February 13, 2015

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, 2015 (2 workdays 
prior to the release of PPI data for January 2015 on February 18):

*  Direct seasonal factors for PPI commodity indexes for the year 2015,
*  Recalculated seasonal factors for the last 5 years (2010-2014) for PPI commodity indexes, 
*  Recalculated seasonal factors for the last 5 years (2010-2014) for PPI Final Demand-
   Intermediate Demand indexes, 
*  Recalculated seasonal data for the last 5 years (2010-2014) 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 as of December 2014 also will be available 
on February 13, 2015:  

*  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

To obtain this information, visit the PPI website at www.bls.gov/ppi, e-mail PPI at ppi-
info@bls.gov, or call the Division of Industrial Prices and Price Indexes, Section of Index 
Analysis and Public Information at (202) 691-7705.                         



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