Sept 23 -- The Bureau of Labor Statistics (BLS) has asked OMB to approve a renewal of the Producer Price Index for three years and invites the comments on its proposal by October 23, 2020.
The Producer Price Index (PPI) is a Principal Federal Economic Indicator consisting of a family of indexes that measures the average change over time in the selling prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index (CPI), that measure price change from the purchaser's perspective.
About 10,000 PPIs for individual products and groups of products are released each month. PPIs are available for the output of nearly all industries in the goods-producing sectors of the U.S. economy— mining, manufacturing, agriculture, fishing, and forestry— as well as natural gas, electricity, construction, and goods competitive with those made in the producing sectors, such as waste and scrap materials. The PPI program also currently publishes price data on about 133 service industries as well as 9 non-residential construction industries. The PPI now covers about 72% of in-scope services domestic output and about 31% of construction domestic output as measured by the 2012 Census Value of Shipments.
PPI and BLS’s Import Price Index (MPI) recently introduced a satellite set of net inputs to industry price indexes. These new indexes measure price change for both domestically produced and imported inputs consumed by most 3-digit NAICS industry groupings, excluding capital investment and labor. The new satellite series are complimentary to official indexes and are produced and published separately from the existing official PPI inputs to industry series. The new data series improves upon the existing net inputs to industry price indexes by adding prices for imported inputs of goods. The satellite series also represent a major coverage expansion relative to the official input price indexes, which are only available for construction industries and a very limited number of mining, manufacturing, and services industries. The new data provide business users with additional data options for industry cost analysis, price transmission analysis, contract escalation, and deflation of revenue streams, removing the effects of price changes and converting nominal revenue into real revenue. Each month beginning with the initial data release, PPI and MPI will post an Excel file on a new web page with data for the current period and revised data for the four months prior. Data in the table are published at the third decimal place level of precision. PPI will advertise the availability of the satellite data and conduct presentations to obtain user feedback.
There are four PPI publication structures, Industry, Commodity, FD-ID to Industry. Industry-based indexes use NAICS codes, while Commodity based indexes track goods according to the end use.
The FD-ID index structure tracks changes in prices for goods, services and construction sold to final demand. There are six main Final Demand price indexes: final demand goods, final demand trade services, final demand transportation and warehousing services, final demand services less trade, transportation, and warehousing, final demand construction, and overall final demand.
The intermediate-demand portion of the FD–ID system tracks price change for goods, services, and construction products sold to businesses as inputs to production, excluding capital investment. The system includes two parallel treatments of intermediate demand. The first treatment organizes intermediate-demand commodities by type. The second organizes intermediate demand commodities into production stages, with the explicit goal of developing a forward-flow model of production and price change. The treatment having to do with intermediate demand by type of commodity organizes commodities by similarity of product. This treatment is composed of six main intermediate-demand price indexes: unprocessed goods; processed goods; trade services; transportation and warehousing services; services less trade, transportation, and warehousing; and construction. There are also PPIs published for special commodity groupings and material and supply inputs for construction industries. In January 2015, PPI expanded coverage of inputs to industry indexes to include select manufacturing and service industries such as: Paint and coating manufacturing, Automobile manufacturing, Offices of health practitioners, Membership associations an organizations, Plastics products manufacturing, Mining and oil and gas field machinery manufacturing, Airplane manufacturing, Ship building and repairing, and Truck transportation.
The PPI program started publishing variance estimates based on final index calculations in 2016 for the previous calendar year. The PPI variance estimates include data describing PPIs for selected high-level indexes from the FD–ID Aggregation System. The FD–ID system represents the primary method to analyze producer inflation at the aggregate level. These variance estimates are updated on an annual basis. In that same year, the PPI program introduced new regional indexes for New Nonresidential Building Construction and Natural Gas Distribution. This increased the PPI program’s overall coverage of the United States’ economy.
The current universe for the PPI survey consists of roughly 5.0 million establishments comprising the covered portions of the mining, manufacturing, forestry, utility, and non-goods producing sectors. The PPI program initiates about 4,305 respondents annually. PPI repricing consists of 11,640 respondents providing data for 61,250 price quotations on a monthly basis. The PPI survey is based on probability-proportional-to-size sampling. Each establishment listed in the sampling frame of producing entities has a chance of selection for the PPI survey. The PPI program assigns this probability in proportion to the size of the establishment. The PPI program collects samples of populations of various individual NAICS industries. This means the chances of the PPI program selecting a given establishment for inclusion in the sample are proportional to the establishment’s overall importance within its respective NAICS industry.
PPI webpage:
https://www.bls.gov/ppi/
New BLS satellite series: inputs to industry price indexes
https://www.bls.gov/ppi/a-new-bls-satellite-series-inputs-to-industry-price-indexes.htm
FR notice:
https://www.federalregister.gov/documents/2020/09/23/2020-20950/agency-information-collection-activities-submission-for-omb-review-comment-request-producer-price
Proposal to OMB:
https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202007-1220-001 Click on IC List for survey instruments, View Supporting Statement for description of uses, methods, and schedule.
Point of Contact: Steven P. Paben, Supervisory Mathematical Statistician, Office of Prices and Living Conditions, Division of Price Statistical Methods (202) 691-6147 paben.steven@bls.gov
For AEA members wishing to provide comments, "A Primer on How to Respond to Calls for Comment on Federal Data Collections" is available at
https://www.aeaweb.org/content/file?id=5806