Washington, DC…The Producer Price Index for final demand increased 0.8 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.6 percent in April and 1.0 percent in March. (See table A.) On an unadjusted basis, the final demand index advanced 6.6 percent for the 12 months ended in May, the largest increase since 12-month data were first calculated in November 2010.

Nearly 60 percent of the May increase in the index for final demand can be traced to a 1.5-percent rise in prices for final demand goods. The index for final demand services moved up 0.6 percent.

Prices for final demand less foods, energy, and trade services increased 0.7 percent in May, the same as in April. For the 12 months ended in May, the index for final demand less foods, energy, and trade services climbed 5.3 percent, the largest increase since 12-month data were first calculated in August 2014.

Final Demand

Final demand goods: Prices for final demand goods advanced 1.5 percent in May after rising 0.6 percent in April. Over 40 percent of the broad-based increase in May can be traced to the index for final demand goods less foods and energy, which moved up 1.1 percent. Prices for final demand foods and for final demand energy also advanced, 2.6 percent and 2.2 percent, respectively.

Product detail: Within the index for final demand goods in May, prices for nonferrous metals rose 6.9 percent. The indexes for beef and veal; diesel fuel; gasoline; hay, hayseeds, and oilseeds; and motor vehicles also advanced. In contrast, prices for fresh fruits and melons declined 1.9 percent. The indexes for primary basic organic chemicals and for asphalt also moved lower. (See table 4.)

Final demand services: Prices for final demand services rose 0.6 percent in May, the fifth consecutive increase. Forty percent of the broad-based May advance can be traced to the index for final demand trade services, which moved up 0.7 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand services less trade, transportation, and warehousing and for final demand transportation and warehousing services also rose, 0.2 percent and 1.9 percent, respectively.

Product Detail: Over 40 percent of the May increase in the index for final demand services is attributable to margins for automobile retailing (partial), which jumped 27.3 percent. The indexes for truck transportation of freight; apparel, footwear, and accessories retailing; portfolio management; chemicals and allied products wholesaling; and hardware, building materials, and supplies retailing also rose. Conversely, margins for food retailing fell 3.6 percent. The indexes for traveler accommodation services and for airline passenger services also decreased.

Intermediate Demand by Commodity Type

Within intermediate demand in May, prices for processed goods increased 2.8 percent, the index for
unprocessed goods rose 8.4 percent, and prices for services advanced 0.8 percent. (See tables B and
C.)

Processed goods for intermediate demand: The index for processed goods for intermediate
demand moved up 2.8 percent in May following a 1.6-percent advance in April. Over 60 percent of
the broad-based increase in May can be traced to prices for processed materials less foods and
energy, which climbed 2.3 percent. The indexes for processed energy goods and for processed foods
and feeds rose 4.8 percent and 2.5 percent, respectively. For the 12 months ended in May, prices for
processed goods for intermediate demand increased 21.9 percent, the largest advance since jumping
23.6 percent for the 12 months ended February 1975.

Product Detail: A major factor in the May advance in prices for processed goods for intermediate
demand was the index for lumber, which increased 15.5 percent. Prices for diesel fuel; utility natural
gas; structural, architectural, and pre-engineered metal products; ethanol; and beef and veal also
moved higher. In contrast, the index for primary basic organic chemicals fell 4.2 percent. Prices for
commercial electric power and for pork also declined. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate
demand advanced 8.4 percent in May after a 3.8-percent decline in April. Forty percent of the broad-
based rise can be attributed to prices for unprocessed energy materials, which climbed 9.6 percent.
The indexes for unprocessed foodstuffs and feedstuffs and for unprocessed nonfood materials less
energy also advanced, 6.4 percent and 9.3 percent, respectively. For the 12 months ended in May, the
index for unprocessed goods for intermediate demand surged 57.9 percent, the largest rise since
jumping 59.3 percent for the 12 months ended August 1973.

Product Detail: Nearly 30 percent of the May increase in the index for unprocessed goods for
intermediate demand can be traced to prices for crude petroleum, which rose 12.8 percent. The
indexes for corn; natural gas; hay, hayseeds, and oilseeds; raw milk; and nonferrous metals also
moved higher. Conversely, prices for slaughter hogs dropped 12.9 percent. The index for logs, bolts,
timber, pulpwood, and wood chips and prices for coal also fell.

Services for intermediate demand: The index for services for intermediate demand rose 0.8 percent
in May, the sixth consecutive increase. Nearly half of the broad-based advance in May can be traced
to a 1.7-percent jump in margins for trade services for intermediate demand. Prices for services less
trade, transportation, and warehousing for intermediate demand and for transportation and
warehousing services for intermediate demand also moved higher, rising 0.3 percent and 1.5 percent,
respectively. For the 12 months ended in May, the index for services for intermediate demand
climbed 7.9 percent, the largest advance since 12-month data were first calculated in November
2010.

Product detail: Leading the May increase in prices for services for intermediate demand, margins for
metals, minerals, and ores wholesaling rose 6.4 percent. The indexes for hardware, building
materials, and supplies retailing; truck transportation of freight; portfolio management; chemicals
and allied products wholesaling; and arrangement of freight and cargo transportation also moved
higher. In contrast, prices for cable network advertising time sales fell 14.6 percent. The indexes for
machinery and equipment parts and supplies wholesaling and for airline passenger services also
declined.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand moved up 1.5 percent in
May, the largest advance since the index began in December 2009. In May, the index for total goods
inputs to stage 4 intermediate demand jumped 2.4 percent, and prices for total services inputs rose
0.8 percent. (See table D.) Increases in the indexes for corn; structural, architectural, and pre-
engineered metal products; lumber; metals, minerals, and ores wholesaling; portfolio management;
and utility natural gas outweighed declines in the indexes for machinery and equipment parts and
supplies wholesaling, fresh fruits and melons, and commercial electric power. (See table 6.) For the
12 months ended in May, prices for stage 4 intermediate demand climbed 11.1 percent, the largest
advance since 12-month data were first calculated in November 2010.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand increased 2.1 percent in May
after rising 2.7 percent in April. In May, the index for total goods inputs to stage 3 intermediate
demand climbed 3.6 percent, and prices for total services inputs moved up 0.7 percent. Advances in
the indexes for corn; raw milk; diesel fuel; metals, minerals, and ores wholesaling; steel mill
products; and lumber outweighed decreasing prices for slaughter hogs, cable network advertising
time sales, and asphalt. For the 12 months ended in May, the index for stage 3 intermediate demand
rose 19.9 percent, the largest increase since 12-month data were first calculated in November 2010.

Stage 2 intermediate demand: The index for stage 2 intermediate demand advanced 3.1 percent in
May following a 2.1-percent decline in April. In May, prices for total goods inputs to stage 2
intermediate demand jumped 6.3 percent, and the index for total services inputs increased 0.4
percent. Higher prices for crude petroleum, gas fuels, oilseeds, ethanol, nonferrous scrap, and
arrangement of freight and cargo transportation outweighed decreases in the indexes for fuels and
lubricants retailing, primary basic organic chemicals, and loan services (partial). For the 12 months
ended in May, prices for stage 2 intermediate demand moved up 21.5 percent, the largest rise since
12-month data were first calculated in November 2010.

Stage 1 intermediate demand: Prices for stage 1 intermediate demand increased 2.6 percent in
May, the largest advance since rising 2.8 percent in December. In May, the index for total goods
inputs to stage 1 intermediate demand jumped 4.0 percent, and prices for total services inputs moved
up 1.4 percent. Increases in the indexes for corn; diesel fuel; utility natural gas; hardware, building
materials, and supplies retailing; fabricated structural metal products; and metals, minerals, and ores
wholesaling outweighed falling prices for primary basic organic chemicals, traveler accommodation
services, and commercial electric power. For the 12 months ended in May, the index for stage 1
intermediate demand rose 21.6 percent, the largest advance since 12-month data were first calculated
in November 2010.

Source = Bureau of Labor Statistics