During the first quarter of 2008, the finished goods index rose at a 10.2-percent seasonally adjusted annual rate (SAAR), after climbing at an 11.5-percent SAAR during the fourth quarter of 2007. Much of this slower rate of increase can be traced to prices for finished energy goods, which moved up at a 22.5-percent SAAR for the 3 months ended in March after jumping at a 44.1-percent SAAR for the 3 months ended in December. By contrast, prices for finished goods less foods and energy increased at a 5.0-percent SAAR during the first quarter of 2008 after rising at a 2.2-percent SAAR during the fourth quarter of 2007. The index for finished consumer foods increased at a 10.1-percent SAAR for the 3 months ended in March after advancing at a 9.6-percent SAAR for the 3 months ended in December. At the earlier
stages of processing, the intermediate goods index moved up at a 19.4-percent SAAR during the first quarter of 2008 after increasing at a 14.5-percent SAAR during the fourth quarter of 2007, and prices for crude goods surged at a 73.4-percent SAAR for the 3 months ended in March after jumping at a 67.7-percent SAAR for the 3 months ended in December.
Before seasonal adjustment, the Producer Price Index for Finished Goods climbed 1.9 percent in March to 175.4 (1982 = 100). From March 2007 to March 2008, finished goods prices rose 6.9 percent. Over the same period, the index for finished energy goods increased 20.4 percent, prices for finished consumer foods moved up 5.8 percent, and the index for finished goods less foods and energy advanced 2.7 percent. For the 12 months ended in March, prices received by manufacturers of intermediate goods rose 10.5 percent, and the crude goods index advanced 31.4 percent.
Finished goods
The rise in the finished energy goods index accelerated to 2.9 percent from 0.8 percent in February. Over half of this acceleration can be attributed to the liquefied petroleum gas index, which turned up 4.2 percent in March after dropping 9.7 percent a month earlier. Prices for home heating oil, residential electric power, and kerosene also moved up after falling in the preceding month. The indexes for diesel fuel and asphalt advanced more in March than in the prior month. Conversely, partially offsetting the acceleration in finished energy goods prices, the rise in the index for gasoline slowed to 1.3 percent from 2.9 percent in February. Prices for residential natural gas also advanced less than a month earlier.
The index for finished consumer foods turned up 1.2 percent in March following a 0.5-percent decrease in February. The index for fresh and dry vegetables jumped 15.4 percent in March after dropping 15.7 percent in the previous month. Prices for processed young chickens also turned up in March after falling in the prior month. The index for fresh fruits and melons fell less than in February. Prices for beef and veal and for shortening and cooking oils advanced more than a month earlier. By contrast, the index for soft drinks turned down 0.8 percent after rising 0.5 percent in February. Prices for eggs for fresh use also fell in March after advancing in the preceding month, and the index for pork decreased more than in February.
The index for finished goods less foods and energy climbed 0.2 percent after rising 0.5 percent in February. The rise in the index for pharmaceutical preparations slowed to 0.4 percent in March from 1.3 percent in the prior month. Prices for sanitary paper and health products, alcoholic beverages, civilian aircraft, and pet food also increased less than in February. The indexes for light motor trucks and passenger cars turned down in March after rising in the prior month. By contrast, the index for soaps and synthetic detergents rose 2.0 percent following a 0.1-percent advance in February.
Intermediate goods
The Producer Price Index for Intermediate Materials, Supplies, and Components rose 2.3 percent in March subsequent to a 0.8-percent increase in the prior month. This price acceleration was broad based as the indexes for intermediate energy goods, materials for both durable and nondurable manufacturing, intermediate foods and feeds, and materials and components for construction all rose more in March. Prices for intermediate materials less foods and energy moved up 1.1 percent after advancing 0.6 percent in February.
The intermediate energy goods index climbed 5.9 percent in March following a 1.1-percent gain in the previous month. Leading this acceleration, the index for diesel fuel surged 15.3 percent after rising 0.9 percent in February. Prices for jet fuel, residual fuel, liquefied petroleum gas, electric power, and home heating oil turned up in March. By contrast, slightly offsetting the acceleration in the intermediate energy goods index, gasoline prices advanced 1.3 percent compared with a 2.9-percent rise in February. The index for utility natural gas also rose less than it had in the prior month. The intermediate energy goods index advanced at a 46.4-percent SAAR from December 2007 to March 2008 after moving up at a 50.6-percent SAAR during the final quarter of 2007.
Prices for materials for durable manufacturing increased 3.8 percent in March subsequent to a 1.6-percent rise in the preceding month. The cold rolled steel sheet and strip index advanced 7.6 percent following a 4.2-percent decline a month earlier. Prices for hot rolled steel sheet and strip, aluminum mill shapes, nonferrous wire and cable, secondary aluminum, and copper and brass mill shapes advanced at faster rates compared with the prior month. By contrast, the index for prepared paint decreased 1.5 percent after rising 1.7 percent in February. Prices for semifinished steel mill products and for hot rolled steel bars, plates, and structural shapes increased less than they had a month earlier. From December 2007 to March 2008, prices for materials for durable manufacturing advanced at a 26.5-percent SAAR after moving down at a 2.3-percent SAAR in the prior quarter.
The index for materials for nondurable manufacturing rose 1.5 percent following a 0.9-percent increase in February. Prices for basic organic chemicals moved up 2.0 percent after declining 0.5 percent a month earlier. The phosphates index also turned up in March. Prices for inedible fats and oils, paper, and paint materials increased more than they had in February. By contrast, the nitrogenates index decreased 2.0 percent compared with a 14.3-percent advance in the preceding month. Prices for plastic resins and materials, medicinal and botanical chemicals, and woodpulp also turned down in March. The index for materials for nondurable manufacturing advanced at a 19.8-percent SAAR for the 3 months ended March 2008 after climbing at a 21.0-percent SAAR in the previous quarter.
Prices for intermediate foods and feeds moved up 2.9 percent in March following a 2.3-percent increase in the prior month. The beef and veal index rose 4.0 percent subsequent to a 0.6-percent gain in February. Prices for shortening and cooking oils and for prepared animal feeds also advanced more than they had in the previous month. The indexes for natural, processed, and imitation cheese and for processed young chickens turned up in March. By contrast, the flour index increased 6.2 percent following a 15.2-percent climb in the preceding month. Prices for fluid milk products and pork declined more than they had in February. The index for intermediate foods and feeds increased at a 39.6-percent SAAR in the first quarter of 2008 after rising at a 20.7-percent SAAR in the final quarter of 2007.
Prices for materials and components for construction increased 0.8 percent in March after moving up 0.7 percent in the prior month. In March, higher prices for nonferrous wire and cable, fabricated structural metal products, steel mill products, fabricated ferrous wire products, asphalt felts and coatings, and concrete products more than offset lower prices for plastic construction products and for plumbing fixtures and brass fittings. The index for materials and components for construction advanced at a 7.9-percent SAAR in the first quarter of 2008 after edging up at a 0.4-percent SAAR in the prior quarter.
Crude goods
The Producer Price Index for Crude Materials for Further Processing climbed 8.0 percent in March following a 3.7-percent increase in February. Most of this acceleration can be traced to the index for crude energy materials, which surged in March after rising at a slower rate a month earlier. Prices for crude foodstuffs and feedstuffs and for crude nonfood materials less energy also moved up more than they had in February.
The index for crude energy materials jumped 13.4 percent in March following a 5.6-percent advance in the preceding month. This faster rate of increase is attributable to prices for crude petroleum, which surged 17.5 percent after rising 0.6 percent in February. By contrast, partially offsetting the acceleration in the index for crude energy goods, the coal index fell 0.9 percent in March subsequent to a 1.0-percent gain in the prior month. Natural gas prices moved up slightly less than they had in February - 11.4 percent compared with 11.5 percent. During the first quarter of 2008, the index for crude energy materials increased at a 120.7-percent SAAR after advancing at a 129.9-percent SAAR in the fourth quarter of 2007.
The index for crude foodstuffs and feedstuffs increased 2.0 percent in March following a 0.7-percent rise in the previous month. Corn prices jumped 14.5 percent after declining 1.9 percent in February. The indexes for fresh vegetables (excluding potatoes), slaughter broilers and fryers, and raw cane sugar and byproducts also turned up in March. Prices for fresh fruits and melons fell less than they had in February. Conversely, price advances for wheat slowed to 0.6 percent in March following a 19.2-percent surge a month earlier. The indexes for slaughter cattle, slaughter hogs, and Irish potatoes for processing turned down after increasing in February. Prices for crude foodstuffs and feedstuffs climbed at a 23.8-percent SAAR for the 3 months ended in March after rising at a 32.5-percent SAAR for the 3 months ended in December.
The index for crude nonfood materials less energy advanced 3.5 percent in March compared with a 3.3-percent rise a month earlier. In March, higher prices for nonferrous metal ores; nonferrous scrap; iron and steel scrap; construction sand, gravel, and crushed stone; wastepaper; shosphates; raw cotton; and pulpwood outweighed lower prices for softwood logs, bolts, and timber. During the first quarter of 2008, the index for crude nonfood materials less energy increased at a 52.6-percent SAAR after moving up at a 10.1-percent SAAR in the fourth quarter of 2007.
Net output price indexes
Mining, Utilities, and Manufacturing Industries. The Producer Price Index for the Net Output of Total Mining, Utilities, and Manufacturing Industries rose 2.3 percent in March following a 0.7-percent increase in February. (Net output price indexes are not seasonally adjusted.) Prices received by the petroleum and coal products industry group jumped 13.2 percent after increasing 0.6 percent in the prior month. The indexes for oil and gas extraction and for manufacturers of food, electrical equipment and appliances, and fabricated metal products also rose more than they had in February. Prices for electric power distribution turned up in March. By contrast, slightly counteracting the acceleration in the index for total mining, utilities, and manufacturing industries, prices for the transportation equipment industry group fell 0.3 percent in March following a 0.4-percent gain a month earlier. The indexes for electric power generation and for beverage and tobacco manufacturers also turned down in March. Prices received by the chemical manufacturing industry group rose less than they had in February. For the first 3 months of 2008, the Producer Price Index for the Net Output of Total Mining, Utilities, and Manufacturing Industries advanced at a 16.4-percent annualized rate compared with a 7.1-percent annualized rate of increase in the final quarter of 2007. In March, the Producer Price Index for the Net Output of Total Mining, Utilities, and Manufacturing Industries was 110.3
(December 2006 = 100), 8.2 percent above its year-ago level.
Trade Industries. The Producer Price Index for the Net Output of Total Trade Industries moved up 0.3 percent after increasing 0.5 percent in February. (Trade indexes measure changes in margins received by wholesalers and retailers.) The rate of increase in margins received by department stores slowed to 0.2 percent in March from 3.5 percent in the previous month. The margin indexes for merchant wholesalers of nondurable goods, grocery stores, automobile dealers, and fuel dealers turned down after rising in the prior month. Conversely, margins received by gasoline stations increased 2.7 percent following a 9.8-percent drop a month earlier. The margin indexes for shoe stores and furniture stores also turned up in March. Margins received by merchant wholesalers of durable goods rose after no change in February. For the first quarter of 2008, the Producer Price Index for the Net Output of Total Trade Industries fell at a 1.9-percent annualized rate after rising at an 8.3-percent annualized rate in the preceding quarter. In March, the Producer Price Index for the Net Output of Total Trade Industries was 105.4 (December 2006 = 100), 2.6 percent above its year-ago level.
Transportation and Warehousing Industries. The Producer Price Index for the Net Output of Transportation and Warehousing Industries rose 1.0 percent in March following a 0.3-percent increase in the previous month. Prices received by the scheduled passenger air transportation industry advanced 3.3 percent after inching down 0.1 percent a month earlier. The industry indexes for couriers, local general freight trucking, line-haul railroads, and long distance specialized freight trucking of new goods also turned up following declines in the preceding month. By contrast, prices received by the scheduled freight air transportation industry decreased 0.2 percent after climbing 4.1 percent a month earlier. The industry indexes for coastal and Great Lakes freight transportation, general warehousing and storage, and used household and office goods moving also turned down after rising in February. Prices received by the industry for long distance general freight trucking (less than truckload) advanced less than they had in the prior month. From December 2007 to March 2008, the Producer Price Index for the Net Output of Transportation and Warehousing Industries climbed at an 11.4-percent annualized rate following a 7.1-percent annualized rate of increase in the final quarter of 2007. In March, the Producer Price Index for the Net Output of Transportation and Warehousing Industries was 109.2 (December 2006 = 100), 6.7 percent above its year-ago level.
Traditional Service Industries. The Producer Price Index for the Net Output of Total Traditional Service Industries decreased 0.6 percent in March after edging down 0.1 percent in February. Prices received by the commercial banking industry fell 8.2 percent in March following a 0.8-percent decline a month earlier. The industry indexes for offices of physicians (excluding mental health) and direct life insurance carriers turned down after increasing in the previous month. Prices received by management consultants and wired telecommunication carriers were unchanged in March following advances in February. By contrast, the index for investment banking and securities dealing increased 5.8 percent in March after falling 1.3 percent in February. The indexes for general medical and surgical hospitals, software publishers,and lessors of nonresidential buildings (excluding miniwarehouses) also turned up in March. Prices received by portfolio managers fell less than they had in February. During the first quarter of 2008, the Producer Price Index for the Net Output of Total Traditional Service Industries declined at a 0.8-percent annualized rate following a 2.7-percent annualized rate of decrease from September to December 2007. In March, the Producer Price Index for the Net Output of Total Traditional Service Industries was 101.3 (December 2006 = 100), 1.2 percent above its year-ago level.
