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Learning about the Producer Price Index Special Groupings

Inflation has been in the news—and on all of our minds—in recent months. Indeed, BLS price indexes have been prominent in nearly every inflation story. You may be familiar with the Consumer Price Index, which measures changes in the prices consumers pay for goods and services. You may be less familiar with the Producer Price Indexes (PPI), which measure price changes from the perspective of businesses.

The headline PPIs are the Final Demand-Intermediate Demand (FD-ID) Indexes. These indexes measure changes in the prices businesses receive for goods, services, and construction sold to end users (final demand) and to other businesses as inputs to production (intermediate demand). From July 2021 to July 2022, the Producer Price Index for Final Demand rose 9.8 percent.

BLS recently introduced two special grouping indexes that break government purchases into defense and nondefense purchases. I’ll say more below about these new groupings, but let’s first look at the variety of PPI data we publish.

PPI Basics

The PPI measures price change for more than 10,000 products and groups of products. We organize these items in many ways to show price change for categories of interest. We group the FD-ID indexes by the type of product sold. Within final demand, the three main indexes are final demand goods, final demand services, and final demand construction. These indexes measure price changes for products intended for personal consumption, capital investment, government, and export.

The main intermediate demand indexes are processed goods for intermediate demand, unprocessed goods for intermediate demand, and services for intermediate demand. These indexes measure price changes for business-to-business sales of fabricated goods, unfabricated goods, and services used as inputs to production.

In addition to the breakouts highlighted in the PPI news release, BLS also publishes special grouping indexes that further divide final demand and intermediate demand in useful ways.

The most popular special indexes are often called “core” indexes. These indexes remove historically volatile components, which may make it easier to understand the underlying rate of inflation. For example, you may have seen news stories that mention the special index for final demand less foods, energy, and trade services.

Indexes for Type of Buyer

A second set of special grouping final demand indexes organizes PPI data by type of buyer, based on Gross Domestic Product categories. These categories include personal consumption, private capital investment, government purchases, and exports. (The PPI measures price changes for domestic producers and thus excludes import prices.) Organizing final demand by type of buyer, rather than type of product, helps us identify when different categories of buyers experience differing rates of inflation.

The chart below shows the special grouping indexes for final demand by buyer type from January 2019 through July 2022. (For comparison purposes, these indexes are rebased to 100 in January 2019.) The chart highlights how different end-use buyers can experience different rates of inflation.

Producer Price Indexes for final demand by type of buyer, January 2019 to July 2022

Editor’s note: Data for this chart are available in the table below.

At the beginning of the COVID-19 pandemic, prices for exports and government purchases initially dropped more than prices for personal consumption and capital investment. From January 2020 through April 2020, prices for exports decreased 3.0 percent and prices for government purchases fell 4.1 percent. At the same time, prices declined 1.6 percent for personal consumption and 0.7 percent for private capital investment. From April 2020 through July 2022, prices jumped 26.9 percent for exports and 26.8 percent for government purchases, compared with increases of 18.1 percent for personal consumption and 19.5 percent for private capital investment.

Indexes for Government Purchases of Goods and Services

Now let’s examine the new special grouping indexes for government defense and nondefense purchases. The most highly weighted items in the defense index include military aircraft; engineering services; jet fuel; search detection, navigation and guidance systems and equipment; and machinery and equipment wholesaling. The most highly weighted items in the nondefense index consist of new school building construction, portfolio management, commercial electric power, diesel fuel, and property and casualty insurance.

The chart below presents the new government purchases indexes from January 2019 through July 2022. (Again, for comparison purposes these indexes are rebased to 100 in January 2019.) Although the two indexes move similarly, there is one notable difference. Prices for defense purchases fell more sharply than prices for nondefense purchases at the start of the COVID-19 pandemic. Both indexes moved higher beginning in mid-2020, but prices for government defense purchases have increased more slowly than for nondefense purchases.

Producer Price Indexes for government purchases, defense and nondefense, January 2019 to July 2022

Editor’s note: Data for this chart are available in the table below.

Indexes for Distributive Services

A third set of special grouping indexes are for distributive services. These indexes are particularly relevant now, given recent issues in U.S. and global supply chains. These indexes measure price changes for services associated with distributing goods sold to final demand and intermediate demand. Distributive services include transporting, storing, and reselling goods.

The chart below presents the indexes for final demand distributive services and intermediate demand distributive services from January 2019 through July 2022. The final demand distributive services index measures price changes for distributing goods sold to final demand (personal consumption, capital investment, government purchases, and exports). The intermediate demand distributive services index measures price changes for services associated with distributing goods sold to other businesses as inputs to production.

Producer Price Indexes for distributive services, January 2019 to July 2022

Editor’s note: Data for this chart are available in the table below.

Both distributive services indexes rose sharply from 2019 through 2022. Notably, neither index showed the dip at the beginning of the COVID-19 pandemic that happened with many other BLS price indexes. The intermediate demand distributive services index rose nearly 30 percent since March 2020, compared with approximately 25 percent for final demand distributive services. The larger increase in prices for business-to-business distributive services potentially highlights supply chain issues early in the production pipeline.

These are just some of the special groupings available for the PPI. You can see the full list of special grouping final demand and intermediate demand indexes in table 1 of the PPI news release.

Producer Price Indexes for final demand by type of buyer
MonthFinal demandExportPersonal consumptionGovernment purchasesPrivate capital investment

Jan 2019

100.000100.000100.000100.000100.000

Feb 2019

100.343100.000100.345100.448100.086

Mar 2019

100.857100.442101.034101.166100.172

Apr 2019

101.542100.795101.724101.614100.516

May 2019

101.628100.618101.810101.794100.774

Jun 2019

101.542100.530101.897101.345100.430

Jul 2019

101.714100.618102.069101.794100.860

Aug 2019

101.799100.353102.241101.704100.688

Sep 2019

101.37199.735101.897101.345100.000

Oct 2019

101.79999.912102.414101.435100.430

Nov 2019

101.37199.823101.810101.256100.430

Dec 2019

101.457100.088101.810101.435100.602

Jan 2020

101.971100.707102.328101.883100.774

Feb 2020

101.457100.000102.069100.807100.172

Mar 2020

101.20099.558101.810100.000100.086

Apr 2020

100.00097.703100.69097.668100.086

May 2020

100.51497.968101.46697.84899.742

Jun 2020

100.85798.410101.63898.744100.172

Jul 2020

101.45798.763102.24199.641100.688

Aug 2020

101.54299.117102.328100.000100.516

Sep 2020

101.71499.735102.50099.910100.344

Oct 2020

102.399100.618103.190100.179101.032

Nov 2020

102.228101.148102.759100.538101.032

Dec 2020

102.314102.208102.586101.166100.946

Jan 2021

103.599104.417104.052102.332101.290

Feb 2021

104.456105.389104.828103.408101.978

Mar 2021

105.398106.979105.862104.843102.064

Apr 2021

106.512108.657106.897105.650103.181

May 2021

107.541110.777107.500106.996104.557

Jun 2021

108.483111.749108.534108.072104.901

Jul 2021

109.532112.973109.543108.996106.063

Aug 2021

110.330113.887110.360109.641106.740

Sep 2021

110.639113.716110.711110.048107.269

Oct 2021

111.480114.644111.262111.408109.044

Nov 2021

112.331116.096111.962112.271109.996

Dec 2021

112.548116.431112.008112.168111.042

Jan 2022

114.031117.875113.262114.346113.212

Feb 2022

115.322119.163114.484116.048114.586

Mar 2022

117.687122.023116.866119.236115.960

Apr 2022

118.414123.824117.125121.090117.153

May 2022

119.489124.885118.190123.078117.801

Jun 2022

120.793125.305119.741124.975118.516

Jul 2022

120.223124.008119.038123.879119.514
Producer Price Indexes for government purchases, defense and nondefense
MonthGovernment purchases, defenseGovernment purchases, nondefense

Jan 2019

100.000100.000

Feb 2019

100.672100.380

Mar 2019

101.344101.045

Apr 2019

101.631101.614

May 2019

101.919101.804

Jun 2019

101.248101.519

Jul 2019

101.536101.994

Aug 2019

101.344101.899

Sep 2019

100.960101.614

Oct 2019

101.536101.425

Nov 2019

101.440101.235

Dec 2019

101.631101.330

Jan 2020

102.303101.709

Feb 2020

100.576100.950

Mar 2020

99.424100.285

Apr 2020

96.16198.291

May 2020

96.06598.575

Jun 2020

97.60199.240

Jul 2020

98.273100.285

Aug 2020

98.369100.855

Sep 2020

98.081100.760

Oct 2020

98.464101.045

Nov 2020

98.752101.330

Dec 2020

99.808101.899

Jan 2021

100.864103.134

Feb 2021

101.823104.179

Mar 2021

102.975105.793

Apr 2021

103.935106.458

May 2021

105.278107.882

Jun 2021

105.950109.117

Jul 2021

106.656110.179

Aug 2021

107.261110.821

Sep 2021

107.808111.176

Oct 2021

108.995112.638

Nov 2021

109.702113.563

Dec 2021

109.312113.556

Jan 2022

111.486115.760

Feb 2022

113.509117.346

Mar 2022

117.406120.283

Apr 2022

119.475122.065

May 2022

121.279124.189

Jun 2022

122.261126.568

Jul 2022

121.121125.379
Producer Price Indexes for distributive services
MonthFinal demand distributive services Intermediate demand distributive services

Jan 2019

100.000100.000

Feb 2019

100.256100.000

Mar 2019

100.683100.654

Apr 2019

101.537101.552

May 2019

101.281101.307

Jun 2019

101.281101.307

Jul 2019

101.281101.471

Aug 2019

102.050102.451

Sep 2019

101.366103.023

Oct 2019

102.391102.533

Nov 2019

100.939102.288

Dec 2019

101.110102.941

Jan 2020

101.366103.350

Feb 2020

101.025103.105

Mar 2020

101.964103.268

Apr 2020

102.818103.023

May 2020

102.135103.186

Jun 2020

101.964103.676

Jul 2020

102.818103.758

Aug 2020

102.904105.147

Sep 2020

102.733106.454

Oct 2020

104.611107.598

Nov 2020

103.672107.353

Dec 2020

102.989109.069

Jan 2021

103.672110.376

Feb 2021

104.526111.111

Mar 2021

105.124112.337

Apr 2021

107.515114.951

May 2021

108.881117.075

Jun 2021

109.564119.690

Jul 2021

111.207120.672

Aug 2021

113.412122.481

Sep 2021

113.825122.740

Oct 2021

115.137123.395

Nov 2021

116.470123.114

Dec 2021

117.774124.770

Jan 2022

119.292126.529

Feb 2022

121.753127.859

Mar 2022

125.159132.128

Apr 2022

126.081133.998

May 2022

126.610134.707

Jun 2022

126.983133.757

Jul 2022

127.362133.879

2 comments on Learning about the Producer Price Index Special Groupings

  1. Jeff Beliveau says:

    Useful article, thank you! Unfortunately, it appears that none of these are available using either the data extraction tools or going to https://download.bls.gov/pub/time.series/pc/.

    Are there plans to make these series available like all the other series?

    1. BLS Commissioner says:

      Thanks for your comments. All of these series are available from the data-retrieval tool at https://data.bls.gov/PDQWeb/wp

Comments are closed.