Economic News Release

FOR DATA ONLY:  (202) 691-5200      USDL 09-0975
FOR TECHNICAL INFORMATION:          TRANSMISSION OF MATERIAL IN
(202) 691-7705                      THIS RELEASE IS EMBARGOED
MEDIA CONTACT:  (202) 691-5902      UNTIL 8:30 A.M. (EDT), TUESDAY,
http://www.bls.gov/ppi              AUGUST 18, 2009

                           Producer Price Indexes - July 2009

	The Producer Price Index for Finished Goods declined 0.9 percent in July, seasonally 
adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today.  This 
decrease followed advances of 1.8 percent in June and 0.2 percent in May.  At the earlier stages 
of processing, prices received by manufacturers of intermediate goods moved down 0.2 percent 
in July after rising 1.9 percent in the prior month, and the crude goods index fell 4.5 percent 
following a 4.6-percent increase in June.  (See table A.)

	The downturn in finished goods prices was broad based.  The index for energy goods fell 
2.4 percent in July after climbing 6.6 percent a month earlier, prices for consumer foods 
decreased 1.5 percent following a 1.1-percent advance in the previous month, and the index for 
goods other than foods and energy edged down 0.1 percent compared with a 0.5-percent rise in 
June. 

	Before seasonal adjustment, the Producer Price Index for Finished Goods decreased 0.9 
percent in July to 172.6 (1982 = 100).  From July 2008 to July 2009, prices for finished goods 
fell 6.8 percent, the index for intermediate goods decreased 15.1 percent, and crude goods prices 
dropped 44.8 percent, all of which are record 12-month declines.  Over the same period within 
finished goods, the index for energy goods fell 29.7 percent, prices for consumer foods moved 
down 4.2 percent, and the index for goods other than foods and energy rose 2.6 percent.  

Finished goods

	The index for finished energy goods moved down 2.4 percent in July following a 6.6-
percent advance in June.  Leading this downturn, gasoline prices decreased 10.2 percent after 
surging 18.5 percent a month earlier.  The indexes for home heating oil, diesel fuel, and kerosene 
also turned down in July.  Prices for liquefied petroleum gas increased less than in the prior 
month.  Conversely, partially offsetting the downturn in the finished energy goods index, prices 
for residential electric power advanced 0.7 percent subsequent to a 0.9-percent decline in June.  
The index for residential natural gas rose at a faster rate compared with the previous month, and 
prices for lubricating and similar oils turned up in July after falling in the preceding month.  (See 
table 2.)

	The index for finished consumer foods decreased 1.5 percent in July following a 1.1-
percent rise a month earlier.  Prices for fresh and dry vegetables declined 11.7 percent compared 
with a 21.8-percent gain in June.  The indexes for processed young chickens, eggs for fresh use, 
flour and flour base mixes and doughs, and bottled carbonated soft drinks also turned down in 
July.  Prices for beef and veal fell more than they had in June.  By contrast, prices for citrus fruits 
climbed 31.6 percent subsequent to a 9.2-percent decline a month earlier.  The indexes for 
noncarbonated soft drinks and fluid milk products also turned up in July.  

	Prices for finished goods other than foods and energy edged down 0.1 percent in July 
following a 0.5-percent advance in June.  The light motor trucks index declined 0.7 percent after 
rising 3.4 percent in the prior month.  Prices for passenger cars and for communication and 
related equipment also turned down in July.  By contrast, the pharmaceutical preparations index 
increased 1.2 percent compared with a 0.8-percent advance in the preceding month.  Prices for 
civilian aircraft declined at a slower rate than in June.  The indexes for plastic products; tools, 
dies, jigs, fixtures, and individual molds; and sporting and athletic goods turned up in July.

Intermediate goods

	The Producer Price Index for Intermediate Materials, Supplies, and Components declined 
0.2 percent in July subsequent to a 1.9-percent advance in June.  Prices for intermediate energy 
goods and intermediate foods and feeds turned down after rising in the previous month.  The 
index for materials for nondurable manufacturing increased less than it had in June, and prices 
for materials and components for construction fell in July after no change in the prior month.  By 
contrast, slightly offsetting the downturn in the index for intermediate materials, supplies, and 
components, the index for materials for durable manufacturing increased more than it had in 
June.  Excluding foods and energy, prices for intermediate materials moved up 0.2 percent in 
July following a 0.4-percent advance a month earlier.  (See table B.)

	The index for intermediate energy goods decreased 1.4 percent in July following an 8.9-
percent increase in the preceding month.  Diesel fuel prices dropped 8.0 percent after rising 14.6 
percent in June.  The indexes for gasoline, jet fuel, residual fuels, heating oil, and natural gas to 
electric utilities also turned down after advancing in the prior month.  Conversely, prices for 
electric power moved up 1.1 percent in July subsequent to a 0.6-percent decline a month earlier.  
The index for finished lubricants also turned up after falling in the preceding month.  Prices for 
commercial natural gas rose more than in June.  (See table 2.)

	Prices for materials for nondurable manufacturing advanced 1.4 percent in July compared 
with a 4.6-percent rise in the previous month.  The index for primary basic organic chemicals 
moved up 3.4 percent following a 16.0-percent jump in June.  Prices for inedible fats and oils, 
synthetic rubber, tire cord fabric, and unprocessed filament yarns turned down in July after 
increasing in the prior month.  Conversely, prices for fertilizer materials rose 4.6 percent in July 
subsequent to a 20.1-percent drop a month earlier.  The indexes for woodpulp and finished knit 
fabrics also turned up after declining in June.  Prices for plastic resins and materials increased 
more in July than in the preceding month, while the index for non-corrugated paperboard fell less 
than in June.  

	Prices for intermediate foods and feeds fell 2.0 percent subsequent to a 1.3-percent gain 
in June.  Leading this downturn, the prepared animal feeds index decreased 3.3 percent in July 
after rising 5.3 percent in the previous month.  Prices for processed young chickens, flour and 
flour base mixes and doughs, natural cheese (except cottage cheese), and processed cheese also 
turned down after rising a month earlier.  The indexes for beef and veal and for shortening and 
cooking oils fell more than they had in June.  By contrast, the cooked or smoked poultry 
products index turned up 3.6 percent following a 1.7-percent decline a month earlier.  Processed 
egg prices also increased in July after falling in the prior month.  

	The index for materials and components for construction moved down 0.3 percent in July 
compared with no change in June.  The index for prepared asphalt and tar roofing and siding 
products fell 4.7 percent subsequent to a 6.1-percent increase a month earlier.  Prices for ready-
mixed concrete, nonferrous wire and cable, and millwork also turned down in July after rising in 
the previous month.  The indexes for metal doors and frames (except storm doors) and for paving 
mixtures and blocks fell more than they had in June.  By contrast, the index for treated wood rose 
4.1 percent subsequent to a 2.9-percent decline in the prior month.  Prices for unfinished 
softwood lumber (not made from purchased materials) rose more than in June, and the index for 
non-farm prefabricated metal building systems was unchanged in July after decreasing in the 
prior month.

	Prices for materials for durable manufacturing climbed 0.6 percent compared with a 0.5-
percent advance in June.  In July, rising prices for both cold and hot rolled steel sheet and strip; 
unfinished softwood lumber (not made from purchased materials); thermoplastics resins and 
materials; primary nonferrous metals; aluminum mill shapes; and hot rolled steel bars, plates, 
and structural shapes more than offset declining prices for copper and brass mill shapes and for 
steel pipe and tube. 

Crude goods

        The Producer Price Index for Crude Materials for Further Processing turned down 4.5 
percent in July after rising 4.6 percent in the previous month.  Prices for crude energy materials 
fell after increasing in June and the index for crude foodstuffs and feedstuffs declined more than 
in the prior month.  By contrast, partially offsetting the downturn in crude materials prices, the 
index for crude nonfood materials less energy rose more than in June.  (See table B.)

	The index for crude energy materials turned down 6.2 percent in July after rising 10.9 
percent a month earlier.  Prices for crude petroleum fell 15.9 percent following a 20.3-percent 
advance in June.  The index for coal declined 1.4 percent in July after increasing 1.7 percent in 
the preceding month.  By contrast, price advances for natural gas accelerated to 5.0 percent from 
3.5 percent in June.  (See table 2.)

	The index for crude foodstuffs and feedstuffs fell 6.1 percent in July following a 0.4-
percent decrease in the previous month.  The index for hay, hayseeds, and oilseeds turned down 
14.1 percent after rising 6.2 percent in June.  Prices for corn, slaughter poultry, fresh vegetables 
(except potatoes), and wheat also declined after advancing in the prior month.  Conversely, the 
index for slaughter steers and heifers turned up 2.0 percent in July after falling 3.7 percent in the 
prior month.  Prices for slaughter barrows and gilts and for Irish potatoes for processing also rose 
following June declines.

	The advance in the index for crude nonfood materials less energy accelerated to 2.9 
percent in July from 2.6 percent in the preceding month.  The index for carbon steel scrap 
jumped 20.6 percent following a 0.5-percent increase in June.  Prices for aluminum base scrap 
also rose more than a month earlier.  The index for phosphates turned up in July after falling in 
the previous month.  Conversely, prices for grains fell 17.9 percent after advancing 4.1 percent in 
June.  The indexes for gold ores and soybeans also turned down after increasing in the prior 
month.  Prices for iron ore fell in July after no change in the preceding month, and the index for 
copper base scrap rose less than in June.

Net output price indexes

Mining, utilities, and manufacturing industries.  The Producer Price Index for the Net Output 
of Total Mining, Utilities, and Manufacturing Industries fell 0.5 percent in July after rising 1.7 
percent in June.  (Net output price indexes are not seasonally adjusted.)  Prices received by 
petroleum refineries dropped 5.2 percent in July following a 17.9-percent surge in the previous 
month.  The industry indexes for automobile, light truck, and utility vehicle manufacturing; 
crude petroleum and natural gas extraction; livestock slaughtering; animal feed manufacturing; 
and poultry processing also turned down after advancing in June.  Prices received by electric 
power distributors increased less in July than they had a month earlier.  By contrast, partially 
offsetting the downturn in mining, utilities, and manufacturing industries prices, the index for the 
electric power generation industry advanced 4.0 percent following a 0.4-percent rise in June.  
Prices received by the phosphatic fertilizer and by the plastic material and resin manufacturing 
industries climbed after decreasing in the prior month.  In July, the index for total mining, 
utilities, and manufacturing industries was 106.5 (December 2006 = 100), 10.4 percent below its 
year-ago level.

Trade Industries.  The Producer Price Index for the Net Output of Total Trade Industries 
decreased 0.4 percent in July following a 1.2-percent increase in June.  (Trade indexes measure 
changes in margins received by wholesalers and retailers.)  Margins received by merchant 
wholesalers of durable goods declined 1.8 percent after rising 1.2 percent in the preceding 
month.  The margin indexes for women's clothing stores, discount department stores, new car 
dealers, and supermarkets also turned down in July.  Margins received by gasoline stations with 
convenience stores advanced less than in June.  By contrast, margins received by warehouse 
clubs and supercenters jumped 7.8 percent in July compared with a 3.1-percent drop in the prior 
month.  The margin indexes for fuel dealers and non-discount department stores also turned up 
after falling in June.  In July, the index for total trade industries was 111.3 (December 2006 = 
100), 2.0 percent above its year-ago level.

Transportation and Warehousing Industries.  The Producer Price Index for the Net Output of 
Total Transportation and Warehousing Industries increased 1.2 percent in July following a 0.3-
percent advance in June.  Leading this acceleration, prices received by the scheduled air 
transportation industry group climbed 4.7 percent after moving up 0.3 percent in the previous 
month.  The industry index for long-distance general freight trucking (by the truckload) also rose 
more in July than it had a month earlier.  Prices received by the industries for both deep sea and 
for Coastal and Great Lakes freight transportation turned up in July.  The index for pipeline 
transportation of crude petroleum products advanced after no change in June.  By contrast, prices 
received by the specialized freight trucking industry group edged down 0.1 percent following a 
1.7-percent jump in the previous month.  The indexes for inland water freight transportation and 
local general freight trucking also turned down in July.  Prices received by line-haul railroads 
increased less than they had in June.  In July, the index for total transportation and warehousing 
industries was 107.9 (December 2006 = 100), 7.0 percent below its year-ago level.

Traditional Service Industries.  The Producer Price Index for the Net Output of Total 
Traditional Service Industries was unchanged in July after inching down 0.1 percent in the 
preceding month.  In July, higher prices received by non-casino hotels and motels, direct 
property and casualty insurers, offices of physicians, savings institutions, and the automotive 
equipment rental and leasing industry group were offset by lower prices received by commercial 
banks, the industry group for security and commodity contract intermediaries and brokerages, 
software publishers, and cable networks.  In July, the index for total traditional service industries 
was 102.4 (December 2006 = 100), 0.2 percent above its year-ago level.

                                                 *****

Producer Price Index data for August 2009 are scheduled to be released on Tuesday, September 
15, 2009 at 8:30 a.m. (EDT).




                                   PPI Expands Commodity Code Detail

        Effective with this release, the Producer Price Index (PPI) program has the capability to 
publish commodity indexes at a greater level of detail than previously was available.  As such, 
the July 2009 data release includes some newly introduced commodity indexes associated with 
9-, 10-, and 11-digit commodity codes.  (The maximum code length permitted for commodity 
indexes will become 12 digits.)  These indexes are available in both the PPI Detailed Report and 
on the BLS website at www.bls.gov/ppi, using the current commodity data retrieval tools.

        Further information is available from the PPI Section of Index Analysis and Public 
Information, at ppi-info@bls.gov or (202) 691-7705.





                              PPI Introduces Wherever Provided Services Indexes

        Effective with this release, the Producer Price Index (PPI) program is publishing 
Wherever Provided (WEP) Services indexes.  Similar to current PPI commodity indexes, the 
new WEP service indexes are constructed with pricing information collected from PPI's 
industry-based survey, aggregated on a service-specific basis rather than by industry of origin.  
Therefore, the WEP services indexes measure price changes for specific services, regardless of 
the type of companies providing the services.

        Since the WEP services indexes are conceptually similar to traditional PPI commodity 
indexes, they are included in Table 6 of the PPI Detailed Report, with major WEP services 
grouping codes ranging from 30 through 80.

        Since the WEP services indexes do not include data for physical products, they do not 
contribute to the PPI's current Stage-of-Processing structure.

        Further information is available from the PPI Section of Index Analysis and Public 
Information, at ppi-info@bls.gov or (202) 691-7705.





                                PPI Updates Industry Net Output Ratios

	Effective with the release of August 2009 data on September 15, 2009, the Producer Price 
Index (PPI) program will update the net output ratios used to calculate industry indexes based on 
the North American Industry Classification System (NAICS).  With this update, net output ratios 
will be based on 2002 Input-Output Account data from the Bureau of Economic Analysis (BEA) 
of the U.S. Department of Commerce.  Net output ratios represent the proportion of an industry's 
or industry grouping's output consumed outside its respective area.  Prior to this update, net 
output ratios for calculating NAICS-based PPIs reflected values from BEA 1997 Input-Output 
Accounts.  This update does not affect commodity-grouping indexes from the PPI.

	Further information is available from the PPI Section of Index Analysis and Public 
Information, at ppi-info@bls.gov or (202) 691-7705.





                         Upcoming Changes to the Producer Price Index News Release

        Effective with the August 2009 Producer Price Index (PPI) News Release scheduled for 
September 15, 2009, the Bureau of Labor Statistics will introduce changes in the presentation of 
the text section of the release.  There will be no changes to the format and content of the tables.  
A sample of the revamped PPI News Release has been posted at 
http://www.bls.gov/bls/changes_to_text_sections_of_nrs.htm.




                                      Resampling of Industries

	Effective with this release, the Producer Price Index (PPI) includes data for 45 resampled 
industries classified according to the North American Industry Classification System (NAICS).  
The Bureau of Labor Statistics periodically updates the sample of producers providing data for 
the PPI to reflect current conditions more accurately when the structure, membership, 
technology, or product mix of an industry shifts.  The first results of this systematic process were 
published in July 1986.  Subsequent efforts have been completed at 6-month intervals.  
        
        For information on specific index additions, deletions, and recodes that are effective with 
this semiannual update, see the July 2009 issue of the PPI Detailed Report online at 
http://www.bls.gov/ppi/ppidr200907.pdf, or contact the Division of Industrial Prices and Price 
Indexes, Section of Index Analysis and Public Information at ppi-info@bls.gov or (202) 691-
7705.

NAICS
Code                    Industry

211111        Crude petroleum and natural gas extraction
211112        Natural gas liquids and residue gas
236222        New school building construction
311613        Rendering and meat byproduct processing
311823        Dry pasta manufacturing
311919        Other snack food manufacturing
312120        Breweries
315999        All other accessory and apparel manufacturing
321219        Reconstituted wood product manufacturing
322291        Sanitary paper product manufacturing
323110        Commercial lithographic printing
323119        Other commercial printing
324110        Petroleum refineries
325120        Industrial gas manufacturing
325414        Other biological product manufacturing
325998        Other miscellaneous chemical product manufacturing
331411        Primary smelting and refining of copper
332111        Iron and steel forging
332112        Nonferrous forging
332117        Powder metallurgy part manufacturing
332618        Other fabricated wire product manufacturing
332911        Industrial valve manufacturing
332912        Fluid power valve and hose fitting manufacturing
332999        Miscellaneous fabricated metal product manufacturing
333293        Printing machinery and equipment manufacturing
333411        Air purification equipment manufacturing
333412        Industrial and commercial fan and blower manufacturing
333922        Conveyor and conveying equipment manufacturing
333924        Industrial truck, trailer, and stacker manufacturing
334417        Electronic connector manufacturing
334510        Electromedical apparatus manufacturing
335921        Fiber optic cable manufacturing
336360        Motor vehicle seating and interior trim manufacturing
336510        Railroad rolling stock manufacturing
339111        Laboratory apparatus and furniture manufacturing
339911        Jewelry, except costume, manufacturing
339914        Costume jewelry and novelty manufacturing
443111        Household appliance stores
445110        Supermarkets and other grocery stores
448210        Shoe stores
484110        General freight trucking, local
484121        General freight trucking, long-distance, truckload
484122        General freight trucking, long-distance, less than truckload
511130        Book publishers
524210        Insurance agencies and brokerages