Gasoline, Natural Gas Prices Result in PPI Stalemate

After a combined 1.4% gain from September to November, the Producer Price Index for finished goods was unchanged in December. The index for finished goods other than foods and energy (core rate) increased 0.3%, slightly higher than analyst expectations.  

For the calendar year 2000, finished good prices increased 3.6%, its largest yearly gain since 1990. Excluding foods and energy, the index for finished goods was up 1.2% in 2000. 

In the manufacturing industry, the Index for Net Output of Total Domestic Manufacturing Industries made the biggest move in December with a 0.4% drop.    

Finished goods

An 8.4% drop in gasoline prices helped fuel a 0.7% decline for the finished energy goods index. Additional finished goods details for December are as follows:

• Before seasonal adjustment, the index for finished goods fell 0.1% to 139.7 (1982=100).
• For the Year 2000, the finished energy goods slowed to 17.1%, after an 18.8% gain in 1999.
• The finished consumer goods index fell 0.4%, while the index for finished consumer goods other than foods and energy declined 0.1%.
• Due largely to a 1.4% increase in prices for light motor trucks and a 0.5% increase for passenger cars, the capital equipment index rose 0.2%, after two consecutive months of no change.
  - Price gains: civilian aircraft, agricultural machinery and equipment
  - Price drops: heavy motor trucks, electronic computers 
  - Year 2000: 1.2% gain (1999 = 0.3% increase)

Intermediate goods

The producer price index for intermediate materials, supplies, and components continued its monthly see-saw ride with a 0.2% rise in December. Prices for intermediate energy goods were the main culprit, including a 33.9% jump for the industrial natural gas index. December index results for construction and manufacturing materials are as follows:

• Durable manufacturing materials: up 0.2% (down 1.1% in November)
  - rising prices: aluminum, copper and brass mill shapes
  - falling prices: plywood, prepared paint, hardwood lumber
  - Year 2000: 0.6% gain (1999 = 2.4% increase)
  
• Nondurable manufacturing materials: down 0.1% (down 0.1% in November)
  - rising prices: organic chemicals, fertilizer materials, alkalies
  - falling prices: plastic resins/materials, paper, paperboard, woodpulp
  - Year 2000: 4.1% gain (1999 = 4.0% increase)
  
• Construction materials/components: up 0.1% (down 0.2% in November)
  - rising prices: softwood lumber, asphalt coatings, switchgear, plumbing, fabricated structural metal products
  - falling prices: plywood, gypsum products, nonferrous wire/cable
  - Year 2000: 0.1% gain (1999 = 2.2% increase)

Crude goods

The Index for Crude Materials for Further Processing gained 8.7% in December; industrial materials index was unchanged.

Net Output of Total Domestic Manufacturing

The petroleum price drops had an impact on the Index for Net Output of Total Domestic Manufacturing Industries, which fell 0.4% in December. The index stood at 134.4 (December 1984 = 100), and has increased 3.0% for the Year 2000.

Some changes for the net output of major industry groups are listed below.

The January 2001 Producer Price Index report will be released on February 16, 2001.