FOR DATA ONLY:  (202) 691-5200      USDL 09-0170
FOR TECHNICAL INFORMATION:          TRANSMISSION OF MATERIAL IN
(202) 691-7705                      THIS RELEASE IS EMBARGOED
MEDIA CONTACT:  (202) 691-5902      UNTIL 8:30 A.M. (EST), THURSDAY,
http://www.bls.gov/ppi              FEBRUARY 19, 2009

                             Producer Price Indexes - January 2009

        The Producer Price Index for Finished Goods rose 0.8 percent in January, seasonally 
adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today.  This 
increase followed declines of 1.9 percent in December and 2.5 percent in November.  At the 
earlier stages of processing, the decrease in prices for intermediate materials slowed to 0.7 
percent from 4.2 percent in the prior month, and the index for crude materials declined 2.9 
percent after dropping 5.3 percent in December.  (See table A.)
        
        The upturn in the index for finished goods was led by the index for energy goods, which 
increased 3.7 percent after falling 9.1 percent in December.  Price declines for finished consumer 
foods slowed to 0.4 percent in January from 1.4 percent in the preceding month.  The index for 
finished goods less foods and energy increased 0.4 percent following a 0.2-percent rise a month 
earlier.

        Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.9 
percent in January to 170.3 (1982 = 100).  From January 2008 to January 2009, the index for 
finished goods moved down 1.0 percent.  Over the same period, prices for finished energy goods 
fell 18.4 percent.  By contrast, partially offsetting the decrease in finished goods prices, the index 
for finished goods less foods and energy rose 4.2 percent and prices for finished consumer foods 
increased 1.8 percent.  For the 12 months ended January 2009, the index for intermediate goods 
decreased 3.5 percent and prices for crude goods dropped 29.1 percent.
        
Finished goods 

	The index for finished energy goods turned up 3.7 percent in January after falling 9.1 
percent a month earlier.  The index for gasoline increased 15.0 percent after dropping 26.2 
percent in the preceding month.  Prices for liquefied petroleum gas, home heating oil, and 
kerosene also turned up after declining in December.  The indexes for diesel fuel and residential 
natural gas fell less than in the prior month.  Conversely, partially offsetting the upturn in 
finished energy goods prices, the rise in the index for residential electric power slowed to 0.3 
percent from 0.5 percent in December.  Prices for asphalt fell more than in the prior month.  (See 
table 2.)

        The decline in the index for finished consumer foods slowed to 0.4 percent in January 
from 1.4 percent in the prior month.  The index for fluid milk products fell 0.6 percent following 
a 5.3-percent decrease in December.  Prices for fresh vegetables (except potatoes), processed 
young chickens, eggs for fresh use, canned carbonated soft drinks, and raspberries turned up 
after declining a month earlier.  Conversely, the index for natural cheese (except cottage cheese) 
dropped 18.6 percent following a 3.4-percent rise in the preceding month.  Prices for pork also 
turned down in January and the index for beef and veal fell more than in December.

	The rise in the index for finished goods less foods and energy accelerated to 0.4 percent 
in January from 0.2 percent in the previous month.  The index for toys, sporting goods, and small 
arms turned up 4.4 percent after falling 0.8 percent in December.  Prices for communication and 
related equipment, alcoholic beverages, and commercial furniture also increased after declining 
in the prior month.  The index for consumer plastic products fell less in January, and prices for 
office and store machines and equipment rose after no change in December.  By contrast, the 
advance in the index for passenger cars slowed to 0.3 percent from 1.5 percent in the prior 
month.  Prices for soap and synthetic detergents turned down after rising in December.

Intermediate goods

	The Producer Price Index for Intermediate Materials, Supplies, and Components fell 0.7 
percent in January following a 4.2-percent decrease in December.  Prices for materials for 
durable manufacturing, intermediate foods and feeds, and materials and components for 
construction all declined less than they had a month earlier, while the indexes for intermediate 
energy goods and materials for nondurable manufacturing turned up in January.  Excluding foods 
and energy, prices for intermediate goods moved down 1.1 percent compared with a 2.9-percent 
decrease in the prior month.  (See table B.)

	The index for materials for durable manufacturing moved down 3.5 percent in January 
following a 7.2-percent decrease in December.  Prices for hot rolled steel sheet and strip fell 6.8 
percent after dropping 23.9 percent in the prior month.  Similarly, the indexes for cold rolled 
steel sheet and strip; hot rolled steel bars, plates, and structural shapes; copper and brass mill 
shapes; primary nonferrous metals; and thermoplastic resins and plastic materials also decreased 
less than a month earlier.  Prices for cold finished steel bars turned up in January.  By contrast, 
partially offsetting the slower rate of decline in prices for materials for durable manufacturing, 
the index for semifinished steel mill products moved down 13.8 percent subsequent to a 7.6-
percent decrease in December.  Prices for steel pipe and tube and for aluminum mill shapes also 
fell more in January than they had in the preceding month.  (See table 2.)

	The index for intermediate energy goods rose 1.5 percent in January after falling 9.8 
percent a month earlier.  Prices for liquefied petroleum gas climbed 20.2 percent compared with 
a 21.8-percent decrease in December.  The indexes for gasoline, heating oil, and residual fuels 
also turned up in January.  Prices for both diesel and jet fuel declined less than they had in 
December.  By contrast, the electric power index fell 0.9 percent after advancing 0.6 percent in 
the prior month.  Prices for natural gas to electric utilities and commercial natural gas also turned 
down in January.  

	The index for materials for nondurable manufacturing edged up 0.1 percent in January 
after decreasing 9.1 percent in December.  Leading this upturn, prices for basic organic 
chemicals rose 0.7 percent in January following a 17.8-percent drop a month earlier.  The 
indexes for medicinal and botanical chemicals and for finished fabrics also turned up after falling 
in December.  Prices for thermoplastic resins and plastic materials and for inedible fats and oils 
declined less in January than they had in the prior month.  By contrast, the index for agricultural 
chemicals and chemical products moved down 14.5 percent subsequent to an 8.2-percent 
decrease in December.  Prices for synthetic rubber also fell more than they had in the previous 
month.  The index for knit gray fabrics rose less than a month earlier.

	The intermediate foods and feeds index moved down 2.2 percent following a 3.3-percent 
decline in December.  In January, falling prices for natural cheese (except cottage cheese), beef 
and veal, processed cheese and related products, fats and oils, processed eggs, bulk fluid milk 
and cream, and pork outweighed rising prices for processed young chickens.

	The index for materials and components for construction moved down 0.7 percent after 
falling 1.2 percent in December.  Prices for paving mixtures and blocks declined 6.2 percent in 
January subsequent to an 8.3-percent drop a month earlier.  The index for sheet metal products 
also decreased less than in the prior month.  The indexes for plastic construction products and for 
prefabricated wood buildings and components advanced after falling in December.  Prices for 
ready-mixed concrete rose more than they had in the previous month.  Conversely, the index for 
structural, architectural, and pre-engineered metal products decreased 2.6 percent compared with 
a 1.1-percent decline in December.  Prices for treated wood products turned down in January, 
and the index for prepared paint rose less than in the preceding month.

Crude goods

	The Producer Price Index for Crude Materials for Further Processing fell 2.9 percent in 
January following a 5.3-percent decline in December.  In January, lower prices for crude energy 
materials outweighed higher prices for crude foodstuffs and feedstuffs and for crude nonfood 
materials less energy.  (See table B.)

        The index for crude energy materials decreased 8.1 percent in January after falling 5.9 
percent in the previous month.  Natural gas prices dropped 7.8 percent compared with a 14.7-
percent increase in the preceding month.  The coal index turned down 2.0 percent following a 
0.5-percent gain in December.  By contrast, partially offsetting the faster rate of decline in the 
crude energy materials index, prices for crude petroleum declined 12.5 percent in January after 
falling 31.0 percent a month earlier.  (See table 2.)
        
	The index for crude foodstuffs and feedstuffs advanced 1.0 percent following a 5.5-
percent decrease in December.  Slaughter cattle prices rose 1.1 percent in January subsequent to 
an 8.9-percent decline in the prior month.  The indexes for corn, soybeans, and fresh vegetables 
(except potatoes) also turned up in January.  Prices for slaughter barrows and gilts rose more 
than in December.  By contrast, prices for slaughter chickens fell 7.2 percent following a 6.9-
percent increase a month earlier.  The indexes for Irish potatoes for processing and tree nuts also 
turned down after rising in December.  Fluid milk prices decreased more than they had in the 
previous month.

        The index for crude nonfood materials less energy edged up 0.1 percent in January 
subsequent to a 2.2-percent decline in December.  The increase in iron and steel scrap prices 
accelerated to 21.9 percent from 13.8 percent in the preceding month.  The index for gold ores 
also advanced more than it had a month earlier.  Prices for corn, wheat, and soybeans for 
nonfood manufacturing turned up in January.  By contrast, the index for hides and skins dropped 
36.0 percent in January after decreasing 7.5 percent in December.  Prices for raw cotton and for 
construction sand, gravel, and crushed stone turned down in January.  The index for aluminum 
base scrap fell more than it had in December. 

Net output price indexes

Mining, Utilities, and Manufacturing Industries.  The Producer Price Index for the Net Output 
of Total Mining, Utilities, and Manufacturing Industries inched up 0.1 percent in January 
following a 2.8-percent decrease in December.  (Net output price indexes are not seasonally 
adjusted.)  Most of this upturn can be traced to prices received by petroleum refineries, which 
advanced 8.1 percent in January after falling 26.4 percent in the prior month.  The industry 
indexes for poultry processing and farm-feed manufacturing also increased following December 
declines.  Prices received by petrochemical manufacturers decreased less in January than they 
had a month earlier, and the industry index for soft drink manufacturing climbed more than in 
December.  By contrast, partially offsetting the upturn in the index for total mining, utilities, and 
manufacturing industries, prices received by cheese manufacturers fell 14.8 percent in January 
after rising 2.4 percent in the preceding month.  The indexes for livestock slaughtering and for 
electric power generation, transmission, and distribution decreased more than they had in 
December.  Prices received by pharmaceutical preparation manufacturers rose less than in the 
preceding month.  In January, the index for total mining, utilities, and manufacturing industries 
was 105.2 (December 2006 = 100), 1.9 percent below its year-ago level.

Trade Industries.  The Producer Price Index for the Net Output of Total Trade Industries 
declined 0.3 percent in January following a 0.5-percent advance in the preceding month.  (Trade 
indexes measure changes in margins received by wholesalers and retailers.)  Leading this 
downturn, margins received by merchant wholesalers of nondurable goods fell 2.3 percent after 
rising 4.6 percent in December.  The margin indexes for department stores, gasoline stations with 
convenience stores, and fuel dealers also decreased following increases in the prior month.  
Conversely, margins received by gasoline stations without convenience stores jumped 10.3 
percent following a 21.0-percent decrease in the prior month.  The margin indexes for home 
centers, electronic shopping and mail-order houses, supermarkets, and new car dealers also 
turned up in January after falling in December.  Margins received by merchant wholesalers of 
durable goods rose more than they had in the previous month.  In January, the index for total 
trade industries was 110.8 (December 2006 = 100), 5.3 percent above its year-ago level.

Transportation and Warehousing Industries.  The Producer Price Index for the Net Output of 
Total Transportation and Warehousing Industries declined 0.8 percent in January following a 
2.8-percent drop in December.  Prices received by the air transportation industry group edged 
down 0.1 percent in January after falling 4.2 percent in the preceding month.  The index for 
couriers and messengers also decreased less than it had in December.  Prices received by the 
general freight trucking industry group and by the inland water freight transportation industry 
turned up in January.  By contrast, the index for the line-haul railroad industry moved down 4.3 
percent following a 2.5-percent decline in December.  Prices received by the industry for local 
specialized freight trucking of new goods also decreased more in January than in the previous 
month.  The indexes for deep sea freight transportation and freight transportation arrangement 
fell after no change in December.  In January, the index for total transportation and warehousing 
industries was 108.6 (December 2006 = 100), 0.3 percent above its year-ago level.

Total Traditional Service Industries.  The Producer Price Index for the Net Output of Total 
Traditional Service Industries advanced 0.4 percent in January following a 0.8-percent decline in 
December.  Prices received by the industry for investment banking and securities dealing 
increased 7.0 percent after falling 2.0 percent a month earlier.  The indexes for automotive 
equipment rental and leasing, software publishers, and offices of lawyers also turned up in 
January.  Prices received by the depository credit intermediation industry group were unchanged 
following decreases in December.  The index for direct health and medical insurance carriers 
rose more in January than it had in the prior month.  Conversely, prices received by real estate 
agents and brokers fell 4.5 percent in January after declining 0.6 percent in December.  Prices 
received by the industries for temporary help services moved down in January after rising in 
December.  In January, the index for total traditional service industries was 102.3 (December 
2006 = 100), unchanged from its year-ago level.


                                            *****

Producer Price Index data for February 2009 are scheduled to be released on Tuesday, March 17, 
2009 at 8:30 a.m. (EDT).

                                            *****

           PPI Commodity Weight Allocations to Stage-of-Processing Indexes Updated

	Effective with the release of January 2009 data on February 19, 2009, the Bureau of 
Labor Statistics updated the weight allocations used to calculate its stage-of-processing (SOP) 
indexes to more accurately reflect recent sales patterns.  While PPI weights continue to be based 
on shipment values from the 2002 economic census, the proportion of these weights allocated to 
the various SOP categories within and, in some cases, across the Finished, Intermediate, and 
Crude goods stages have changed.  The new allocations are based primarily on data contained in 
the 2002 Input/Output Accounts published by the Bureau of Economic Analysis.

	It is important to note that the allocation update does not change the PPI classification 
system, reference base, or aggregation structure.  It has, however, resulted in significant shifts in 
the relative importance of some component series in the stage-of-processing model.  A detailed 
explanation of the SOP allocation update is available on the BLS Web site at:  
http://www.bls.gov/ppi/ppisopallo.htm.

	Relative importance figures as of December 2008, are available on the BLS Web site 
at:  www.bls.gov/ppi.  Choose the "PPI Tables" link, under the "On This Page" heading.  The 
revised SOP relative importance figures will be available through the links:  "Component series 
by stage of processing" and "Commodity groupings by major stage of processing category."  The 
information may also be requested from the Division of Industrial Prices and Price Indexes, 
Section of Index Analysis and Public Information, at 202-691-7705.  For further information on 
this change, please contact Jon Weinhagen at (202) 691-7709.

                                             *****

                                    Resampling of Industries

	Effective with this release, the Producer Price Index (PPI) includes data for 42 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 January 2009 issue of the PPI Detailed Report online at 
http://www.bls.gov/ppi/ppidr200901.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

236221        New warehouse building construction
311312        Cane sugar refining
311313        Beet sugar manufacturing
311421        Fruit and vegetable canning
311514        Dry, condensed, and evaporated dairy products
311830        Tortilla manufacturing
312112        Bottled water manufacturing
313221        Narrow fabric mills
315222        Men's and boys' suit, coat, and overcoat manufacturing
321999        Miscellaneous wood product manufacturing
322211        Corrugated and solid fiber box manufacturing
322225        Flexible packaging foil manufacturing
323111        Commercial gravure printing
323114        Quick printing
325131        Inorganic dye and pigment manufacturing
325188        All other basic inorganic chemical manufacturing
325199        All other basic organic chemical manufacturing
331522        Nonferrous, except Al, die-casting foundries
331525        Copper foundries, except die-casting
332323        Ornamental and architectural metal work manufacturing
333220        Plastics and rubber industry machinery
333298        All other industrial machinery manufacturing
335221        Household cooking appliance manufacturing
335222        Household refrigerator and home freezer manufacturing
335224        Household laundry equipment manufacturing
336211        Motor vehicle body manufacturing
339913        Jewelers' material and lapidary work manufacturing
339950        Sign manufacturing
441310        Automotive parts and accessories stores
443112        Radio, TV, and other electronics stores
452111        Department stores, except discount
452112        Discount department stores
452900        Other general merchandise stores
453210        Office supplies and stationery stores
484210        Used household and office goods moving
484220        Other specialized trucking, local
484230        Other specialized trucking, long-distance
488330        Navigational services to shipping
488510        Freight transportation arrangement
541211        Offices of certified public accountants
541810        Advertising agencies
561330        Professional employer organizations

 
                                                *****

                              Recalculation of Seasonal Adjustment Factors

        Effective with this release, seasonal adjustment factors have been recalculated to reflect 
price-movement patterns during 2008 for stage-of-processing (SOP) and commodity-grouping 
indexes.  This routine annual recalculation may affect previously published seasonally adjusted 
indexes and percent changes for January 2004 through December 2008.  Revised seasonally 
adjusted data for this period, as well as seasonal adjustment factors for commodity indexes to be 
used through December 2009, were released February 17, 2009.  To obtain this information, 
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, or visit the Producer Price Index homepage 
at www.bls.gov/ppi.

	The table below provides monthly seasonally adjusted percent changes for the three 
major SOP categories during 2008, based on former and recalculated seasonal factors.  These 
percent changes include final price data through August 2008 and may differ from values shown 
in tables A and B of this release, which include final price data through September 2008.

Over-the-month percent changes in major stage-of-processing indexes, seasonally 
adjusted, using former and recalculated seasonal factors for 2008


               Finished Goods       Intermediate Goods      Crude Goods     
Month         Former  Recalculated  Former  Recalculated  Former  Recalculated
 

January         1.2        0.9        1.2        1.1        2.9        2.8
February        0.3        0.4        0.9        1.0        3.9        3.9
March           0.9        0.9        2.4        2.2        6.7        6.6
April           0.3        0.2        1.0        1.0        4.7        4.7
May             1.4        1.5        2.7        2.5        6.1        6.0
June            1.7        1.3        2.2        2.0        2.8        2.7
July            1.2        1.3        2.7        2.8        4.0        3.9
August         -0.9       -0.5       -1.5       -1.3      -12.3      -12.0
September      -0.4       -0.2       -0.9       -0.5       -6.0       -6.0
October        -2.8       -2.6       -3.9       -3.9      -18.6      -18.4
November       -2.2       -2.5       -4.3       -4.3      -12.5      -12.6
December       -1.9       -1.9       -4.2       -4.2       -5.3       -5.3