February 27, 2014
The Producer Price Index (PPI) for final demand increased 0.2 percent in January, seasonally adjusted. This advance followed a 0.1-percent rise in December and no change in November. The release of January 2014 PPI data marks the transition from the Stage of Processing (SOP) aggregation system to the Final Demand–Intermediate Demand (FD–ID) aggregation system. In comparison to the SOP system, the FD-ID system more than doubles current PPI coverage of the U.S. economy to over 75 percent of in-scope domestic production. Final demand includes goods, services, and construction which are sold for personal consumption, capital investment, government purchases, and export.
|Month||Total final demand||Final demand, goods||Final demand, services|
In January, the 0.2-percent advance in prices for final demand can be traced primarily to the index for final demand goods, which rose 0.4 percent. Prices for final demand services inched up 0.1 percent.
Accounting for nearly a quarter of the January rise in the index for final demand goods, prices for pharmaceutical preparations advanced 2.7 percent. The indexes for dairy products, residential electric power, utility natural gas, beef and veal, and unprocessed finfish also moved up. In contrast, the gasoline index fell 1.3 percent. Prices for diesel fuel and integrated microcircuits also decreased.
|Month||Processed goods for intermediate demand||Unprocessed goods for intermediate demand||Services for intermediate demand|
Within intermediate demand, the index for processed goods increased 0.6 percent in January, prices for unprocessed goods moved up 0.9 percent, and the index for services was unchanged. Intermediate demand includes goods, services, and maintenance and repair construction sold to businesses, excluding capital investment.
The 0.6-percent increase in the index for processed goods for intermediate demand in January was the largest advance since a 1.0-percent rise in February 2013. The broad-based increase was led by the index for processed energy goods, which rose 1.4 percent.
The 0.9-percent increase in the index for unprocessed goods for intermediate demand in January followed a 2.3-percent jump in December. Leading the January increase, prices for unprocessed foodstuffs and feedstuffs climbed 3.5 percent.
A major factor in the January increase in prices for unprocessed goods for intermediate demand was the index for slaughter steers and heifers, which surged 8.8 percent. Prices for natural gas, raw milk, iron and steel scrap, unprocessed finfish, and copper ores also rose in January. Conversely, the index for crude petroleum fell 7.6 percent.
These data are from the BLS Producer Price Indexes program. To learn more, see "Producer Price Indexes — January 2014" (HTML) (PDF), news release USDL‑14‑0252. For more information about the transition to the Final Demand–Intermediate Demand (FD–ID) aggregation system, see the Beyond the Numbers article, "Improvements to the Producer Price Index measure: the Final-Demand–Intermediate-Demand system." All producer price indexes are routinely subject to revision once, 4 months after original publication, to reflect the availability of late reports and corrections by respondents.
Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Producer price indexes for final and intermediate demand goods and services, January 2014 on the Internet at http://www.bls.gov/opub/ted/2014/ted_20140227.htm (visited December 18, 2014).
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