Producer Price Index News Release Summary July 2021

Transmission of material in this release is embargoed until                          USDL 21-1469
8:30 a.m. (ET), Thursday, August 12, 2021

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                            PRODUCER PRICE INDEXES - JULY 2021


The Producer Price Index for final demand increased 1.0 percent in July, seasonally adjusted, the 
U.S. Bureau of Labor Statistics reported today. Final demand prices rose 1.0 percent in June and 
0.8 percent in May. (See table A.) On an unadjusted basis, the final demand index moved up 7.8 
percent for the 12 months ended in July, the largest advance since 12-month data were first 
calculated in November 2010. 

Nearly three-fourths of the July increase in the final demand index can be traced to a 1.1-percent 
advance in prices for final demand services. The index for final demand goods rose 0.6 percent. 

Prices for final demand less foods, energy, and trade services moved up 0.9 percent in July, the 
largest advance since climbing 1.0 percent in January. For the 12 months ended in July, the index 
for final demand less foods, energy, and trade services rose 6.1 percent, the largest increase since 
12-month data were first calculated in August 2014.

Final Demand

Final demand services: The index for final demand services rose 1.1 percent in July, the largest 
one-month increase since data were first calculated in December 2009. Nearly half of the broad-
based advance in July is attributable to margins for final demand trade services, which jumped 1.7 
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 moved higher, 0.6 percent and 2.7 percent, respectively. 

Product detail: About 20 percent of the July advance in prices for final demand services can be 
traced to margins for automobiles and automobile parts retailing, which climbed 11.2 percent. The 
indexes for airline passenger services; hospital outpatient care; machinery and equipment 
wholesaling; traveler accommodation services; and securities brokerage, dealing, investment advice, 
and related services also increased. In contrast, prices for portfolio management fell 1.8 percent. The 
indexes for chemicals and allied products wholesaling and for fuels and lubricants retailing also 
declined. (See table 4.)

Final demand goods: The index for final demand goods moved up 0.6 percent in July following a 
1.2-percent jump in June. Leading the July advance in prices for final demand goods, the index for 
final demand goods less foods and energy increased 1.0 percent. Prices for final demand energy rose 
2.6 percent. Conversely, the index for final demand foods decreased 2.1 percent. 

Product detail: Among prices for final demand goods in July, the index for tobacco products 
increased 2.7 percent. Prices for gasoline; diesel fuel; gas fuels; consumer, institutional, and 
commercial plastic products; and eggs for fresh use also moved higher. In contrast, the index for beef 
and veal fell 11.6 percent. Prices for residential electric power and for softwood lumber (not edge 
worked) also declined. 

Intermediate Demand by Commodity Type

Within intermediate demand in July, prices for processed goods rose 1.7 percent, the index for 
unprocessed goods increased 1.4 percent, and prices for services advanced 1.0 percent. (See tables B 
and C.)

Processed goods for intermediate demand: The index for processed goods for intermediate 
demand moved up 1.7 percent in July following a 1.9-percent rise in June. Two-thirds of the increase 
in July can be attributed to prices for processed materials less foods and energy, which advanced 1.6 
percent. The index for processed energy goods moved up 4.0 percent. Conversely, prices for 
processed foods and feeds decreased 1.6 percent. For the 12 months ended in July, the index for 
processed goods for intermediate demand increased 22.9 percent, the largest 12-month rise since 
jumping 23.6 percent in February 1975. 

Product detail: Nearly one-fifth of the July advance in the index for processed goods for intermediate 
demand can be traced to a 22.9-percent increase in prices for cold rolled steel sheet and strip. The 
indexes for natural gas to electric utilities, diesel fuel, hot rolled steel sheet and strip, gasoline, and 
steel pipe and tube also moved higher. In contrast, prices for beef and veal dropped 11.6 percent. The 
indexes for softwood lumber (not edge worked) and for canned, cooked, smoked, or prepared poultry 
also decreased. (See table 5.)

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate 
demand rose 1.4 percent in July, the fourth consecutive increase. The advance in July can be traced 
to prices for unprocessed energy materials, which moved up 6.5 percent. Conversely, the index for 
unprocessed foodstuffs and feedstuffs decreased 2.5 percent. Prices for unprocessed nonfood 
materials less energy were unchanged. For the 12 months ended in July, the index for unprocessed 
goods for intermediate demand jumped 55.0 percent.

Product detail: Leading the July advance in prices for unprocessed goods for intermediate demand, 
the index for natural gas jumped 13.5 percent. Prices for crude petroleum, recyclable paper, slaughter 
poultry, iron and steel, and wheat also moved up. In contrast, the index for corn fell 4.8 percent. 
Prices for slaughter barrows and gilts and for nonferrous metal ores also decreased. 

Services for intermediate demand: The index for services for intermediate demand rose 1.0 percent 
in July, the eighth consecutive increase. In July, nearly half of the broad-based advance can be traced 
to margins for trade services for intermediate demand, which moved up 2.1 percent. Prices for 
services less trade, transportation, and warehousing for intermediate demand rose 0.7 percent. The 
index for transportation and warehousing services for intermediate demand advanced 0.6 percent. For 
the 12 months ended in July, prices for services for intermediate demand jumped 9.2 percent, the 
largest increase since 12-month data were first calculated in November 2010.

Product detail: Over a quarter of the July increase in prices for services for intermediate demand can 
be attributed to margins for machinery and equipment parts and supplies wholesaling, which rose 4.6 
percent. The indexes for securities brokerage, dealing, investment advice, and related services; 
metals, minerals and ores wholesaling; nonresidential real estate rents; airline passenger services; and 
internet advertising (excluding print publishers) also advanced. Conversely, prices for tax preparation 
and planning fell 6.2 percent. The indexes for chemicals and allied products wholesaling and for 
arrangement of freight and cargo transportation also declined.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand advanced 1.1 percent in July, 
the same as in June. In July, the index for total services inputs to stage 4 intermediate demand rose 
1.2 percent, and prices for total goods inputs moved up 1.1 percent. (See table D.) Increases in the 
indexes for machinery and equipment parts and supplies wholesaling; securities brokerage, dealing, 
investment advice, and related services; nonresidential real estate rents; cold rolled steel sheet and 
strip; metals, minerals, and ores wholesaling; and motor vehicles and equipment outweighed 
declining prices for softwood lumber (not edge worked), portfolio management, and beef and veal. 
(See table 6.)  For the 12 months ended in July, the index for stage 4 intermediate demand rose 12.0 
percent, the largest advance since 12-month data were first calculated in November 2010.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand advanced 1.1 percent in July, 
following a 2.1-percent increase in June. In July, the index for total goods inputs to stage 3 
intermediate demand rose 1.5 percent, and prices for total services inputs moved up 0.8 percent. 
Advances in the indexes for cold rolled steel sheet and strip; hot rolled steel sheet and strip; cable 
network advertising time sales; metals, minerals, and ores wholesaling; diesel fuel; and jet fuel 
outweighed decreasing prices for raw milk, softwood lumber (not edge worked), and tax preparation 
and planning. For the 12 months ended in July, the index for stage 3 intermediate demand moved up 
20.2 percent. 

Stage 2 intermediate demand: The index for stage 2 intermediate demand advanced 1.7 percent in 
July, the fourth consecutive increase. In July, prices for total goods inputs to stage 2 intermediate 
demand rose 3.1 percent, and the index for total services inputs moved up 0.5 percent. Increases in 
the indexes for gas fuels, crude petroleum, machinery and equipment parts and supplies wholesaling, 
loan services (partial), recyclable paper, and cold rolled steel sheet and strip outweighed decreasing 
prices for softwood lumber (not edge worked), oilseeds, and broadcast and network television 
advertising time sales. For the 12 months ended in July, the index for stage 2 intermediate demand 
advanced 23.0 percent, the largest rise since 12-month data were first calculated in November 2010.

Stage 1 intermediate demand: The index for stage 1 intermediate demand rose 1.9 percent in July 
following a 1.6-percent increase in June. In July, prices for total goods inputs to stage 1 intermediate 
demand moved up 2.2 percent, and prices for total services inputs advanced 1.7 percent. Increases in 
the indexes for natural gas to electric utilities; cold rolled steel sheet and strip; securities brokerage, 
dealing, investment advice, and related services; internet advertising (excluding print publishers); 
metals, minerals, and ores wholesaling; and diesel fuel outweighed decreases in the indexes for corn, 
portfolio management, and chemicals and allied products wholesaling. For the 12 months ended in 
July, prices for stage 1 intermediate demand rose 21.8 percent, the largest advance since 12-month 
data were first calculated in November 2010.

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The Producer Price Index for August 2021 is scheduled to be released on Friday, September 10, 2021 
at 8:30 a.m. (ET).