April Producer Price Index Summary 2023

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The Producer Price Index for final demand advanced 0.2 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices fell 0.4 percent in March and were unchanged in February. (See table A.) On an unadjusted basis, the index for final demand moved up 2.3 percent for the 12 months ended in April.

In April, 80 percent of the rise in the index for final demand is attributable to a 0.3-percent increase in prices for final demand services. The index for final demand goods advanced 0.2 percent. Prices for final demand less foods, energy, and trade services rose 0.2 percent in April after inching up 0.1 percent in March. For the 12 months ended in April, the index for final demand less foods, energy, and trade services increased 3.4 percent.

Final Demand

Final demand services: Prices for final demand services moved up 0.3 percent in April, the largest increase since a 0.4-percent rise in November 2022. Leading the advance in April, the index for final demand services less trade, transportation, and warehousing climbed 0.4 percent. Margins for final demand trade services increased 0.5 percent. (Trade indexes measure changes in margins received by
wholesalers and retailers.) In contrast, the index for final demand transportation and warehousing services decreased 1.7 percent.

Product detail: Over one-third of the April advance in the index for final demand services can be traced to a 4.1-percent rise in prices for portfolio management. The indexes for food and alcohol wholesaling, outpatient care (partial), loan services (partial), hospital inpatient care, and guestroom rental also moved higher. Conversely, prices for long-distance motor carrying declined 2.3 percent. The indexes for food retailing and for securities brokerage, dealing, and investment advice also fell.
(See table 2.)

Final demand goods: Prices for final demand goods increased 0.2 percent in April after falling 1.0 percent in March. Leading the advance, the index for final demand energy rose 0.8 percent. Prices for final demand goods less foods and energy moved up 0.2 percent. In contrast, the index for final demand foods decreased 0.5 percent.

Product detail: An 8.4-percent advance in prices for gasoline was a major factor in the April increase in the index for final demand goods. Prices for fresh and dry vegetables, carbon steel scrap, plastic resins and materials, aircraft and aircraft equipment, and fluid power equipment also moved higher. Conversely, the index for chicken eggs dropped 37.9 percent. Prices for jet fuel and for light motor
trucks also declined.

 

Intermediate Demand by Commodity Type

Within intermediate demand in April, the index for processed goods declined 0.4 percent, prices for unprocessed goods rose 1.7 percent, and the index for services advanced 0.7 percent. (See tables B and C.)

Processed goods for intermediate demand: Prices for processed goods for intermediate demand decreased 0.4 percent in April after moving down 0.9 percent in March. Leading the April decline, the index for processed energy goods dropped 2.3 percent. Prices for processed foods and feeds fell 1.2 percent. In contrast, the index for processed materials less foods and energy increased 0.3 percent. For the 12 months ended in April, prices for processed goods for intermediate demand decreased 3.2 percent, the largest 12-month decline since falling 3.7 percent in July 2020.

Product detail: Over half of the April decrease in prices for processed goods for intermediate demand can be traced to a 4.1-percent decline in the index for diesel fuel. Prices for jet fuel, utility natural gas, meats, fats and oils, and nitrogenates also fell. Conversely, the index for plastic resins and materials rose 2.9 percent. Prices for gasoline and for cold rolled steel sheet and strip also advanced.

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand increased 1.7 percent in April, the largest advance since moving up 4.8 percent in August 2022. A major factor in the April rise was a 5.2-percent jump in prices for unprocessed energy materials. The index for unprocessed nonfood materials less energy moved up 1.8 percent. In contrast, prices for unprocessed foodstuffs and feedstuffs decreased 1.4 percent. For the 12 months ended in April, the index for unprocessed goods for intermediate demand fell 19.2 percent, the largest 12-month decline since dropping 20.1 percent in May 2020.

Product detail: Leading the April advance in prices for unprocessed goods for intermediate demand, the index for crude petroleum rose 14.2 percent. Prices for slaughter steers and heifers, corn, carbon steel scrap, fresh and dry vegetables, and coal also increased. Conversely, the index for ungraded chicken eggs dropped 40.7 percent. Prices for natural gas and for aluminum base scrap also fell.

Services for intermediate demand: The index for services for intermediate demand rose 0.7 percent in April after declining 0.2 percent in March. More than three-quarters of the increase can be attributed to a 0.8-percent advance in prices for services less trade, transportation, and warehousing for intermediate demand. Margins for trade services for intermediate demand moved up 1.5 percent. In contrast, the index for transportation and warehousing services for intermediate demand decreased 0.8 percent. For the 12 months ended in April, prices for services for intermediate demand increased 4.5 percent.

Product detail: More than 20 percent of the April advance in the index for services for intermediate demand can be traced to a 2.4-percent rise in prices for nonresidential real estate rents. The indexes for food and alcohol wholesaling, loan services (partial), staffing services, portfolio management, and services related to securities brokerage and dealing (partial) also moved higher. Conversely, prices for long-distance motor carrying fell 2.3 percent. The indexes for securities brokerage, dealing, and investment advice and for hardware, building materials, and supplies retailing also declined.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand moved up 0.4 percent in April after declining 0.2 percent in March. In April, the index for total services inputs to stage 4 intermediate demand advanced 0.9 percent. In contrast, prices for total goods inputs edged down 0.1 percent. Increases in the indexes for nonresidential real estate rents, portfolio management, food and alcohol wholesaling, gasoline, services related to securities brokerage and dealing (partial), and loan services (partial) outweighed falling prices for meats; securities brokerage, dealing, and investment advice; and diesel fuel. For the 12 months ended in April, the index for stage 4 intermediate demand rose 2.9 percent.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand edged down 0.1 percent in April after falling 0.5 percent in March. In April, the index for total goods inputs to stage 3 intermediate demand decreased 1.0 percent. Conversely, prices for total services inputs advanced 0.7 percent. Declines in the indexes for ungraded chicken eggs, jet fuel, diesel fuel, slaughter hogs, and arrangement of freight and cargo transportation outweighed rising prices for television advertising time sales, slaughter cattle, staffing services, and plastic resins and materials. For the 12 months ended in April, the index for stage 3 intermediate demand moved down 3.6 percent, the largest 12- month decrease since falling 3.6 percent in August 2020.

Stage 2 intermediate demand: Prices for stage 2 intermediate demand increased 1.2 percent in April, the largest advance since climbing 3.0 percent in August 2022. The indexes for total goods inputs and for total services inputs to stage 2 intermediate demand both moved higher, 1.8 percent and 0.7 percent, respectively. Increases in the indexes for crude petroleum, loan services (partial), food and alcohol wholesaling, staffing services, carbon steel scrap, and janitorial services outweighed declines in prices for gas fuels, arrangement of freight and cargo transportation, and prepared animal feeds. For the 12 months ended in April, the index for stage 2 intermediate demand fell 5.1 percent,
the largest 12-month decrease since dropping 5.3 percent in July 2020.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand were unchanged in April following two consecutive decreases. In April, a 0.5-percent increase in the index for total services inputs to stage 1 intermediate demand offset a 0.5-percent decline in prices for total goods inputs. Advances in the indexes for nonresidential real estate rents, services related to securities brokerage and dealing (partial), gasoline, fluid power equipment, and portfolio management offset falling prices for diesel fuel; utility natural gas; securities, brokerage, dealing, and investment advice; transportation of passengers (partial); and nitrogenates. For the 12 months ended in April, the index
for stage 1 intermediate demand decreased 0.8 percent, the first 12-month decline since moving down 0.6 percent in October 2020.

Article and Data Courtesy of the U.S. Bureau of Labor Statistics.