Monthly Labor Review • February 2011 3

PPI Experimental Aggregation

A new, experimental system of 

indexes from the PPI program

This month, the PPI program is releasing data from a new, 

experimental system of indexes; the new system covers more 

commodities and more portions of final demand than the 

stage-of-processing system, and also contains two different 

treatments of intermediate demand 

Jonathan C. Weinhagen

Jonathan C. Weinhagen is an 

economist in the Office of Prices 

and Living Conditions at the 

Bureau of Labor Statistics. E-mail: 

weinhagen.jonathan@bls.gov.

I

n its monthly news releases of Producer Price Index (PPI) data, the 

Bureau of Labor Statistics currently 

highlights the stage-of-processing (SOP) 

system as its key structure for analyzing 

producer prices. The SOP system aggregates price indexes for processed and unprocessed goods. Over the past 20 years, 

PPI coverage has expanded to include price 

indexes for many service and construction 

activities, but the SOP system continues 

to include only goods. The PPI program 

recently developed an experimental aggregation system that includes goods price 

indexes as well as service and construction 

price indexes for products sold to all portions of final demand (personal consumption, capital investment, government use, 

and export) and to intermediate demand 

(business inputs, excluding capital investment). The experimental aggregation 

system was introduced with the release of 

January 2011 data in February 2011. This 

article presents the new, experimental index aggregation system. 

The next section of the article provides 

an overview of the current SOP system. 

The section after that explains the development of the experimental aggregation 

system. After that, the article describes the 

price indexes for final demand included in 

the system and then discusses the intermediate demand price indexes that are included. 

The system contains two different sets of intermediate demand price indexes. The first 

set is price indexes for intermediate-demand 

goods, services, and construction commodities 

organized according to type of commodity. 

The second set is intermediate demand price 

indexes classified into stages that are based on 

the flow of production; these indexes can be 

used for price-transmission analysis. The final 

section of the article is a summary. 

Current PPI SOP system

The SOP system organizes goods according 

to the class of buyer and the amount of processing or assembling the products have undergone. The three stages within the SOP system are crude goods, intermediate goods, and 

finished goods. Finished goods are defined 

as commodities that are ready for sale to the 

final user—either an individual consumer, or 

a business that consumes the goods as capital investment. The category of intermediate 

goods consists partly of already-processed 

goods that still require further processing. The 

intermediate goods category also covers nondurable, physically complete goods purchased 

by businesses as inputs for their operations. 

Crude materials for further processing are de-
PPI Experimental Aggregation

4 Monthly Labor Review • February 2011

fined as unprocessed goods sold to businesses as inputs 

to production. 

The SOP system can be presented in terms of exhibit 

1, which is a simplified version of the actual input–output (I–O) “Use of Commodities by Industries” table 

constructed by the Bureau of Economic Analysis (BEA). 

The actual 2002 BEA I–O table includes a total of 423 

commodities and indicates the segments of the economy in which the consumption of these 423 commodities occurs. Consumption of commodities can be by any 

of the 427 industries included in the table or within any 

of 14 separate categories of final demand. Although the 

BEA table includes 14 categories of final demand, all of 

these categories can be classified under one of four primary components of final demand: personal consumption, capital investment, government purchase, or net 

exports. Commodities and industries are both classified 

according to North American Industry Classification 

System code within the BEA I–O table.1

The simplified version of the I–O table that appears 

as exhibit 1 contains only 12 commodities that can 

be consumed by any of 12 industries or within any of 

four segments of final demand. The leftmost column 

of exhibit 1 indicates the type of commodity being used. The 

commodity types are unprocessed goods, processed goods, 

construction, traditional services, transportation services, and 

trade services. Unprocessed goods are defined as goods that 

have not been altered or transformed from their original state. 

Fresh fruit is an example of an unprocessed good. Processed 

goods are goods that have undergone some fabrication. Examples of processed goods are motor vehicles and canned 

vegetables. Construction is the erection of buildings or the 

creation of other engineering products, such as highways and 

utility systems. Traditional services are defined as all services 

other than trade and transportation services, such as publishing, banking, accommodation, and health care. Transportation services involve providing transportation for passengers 

and cargo, warehousing and storage of goods, and scenic and 

sightseeing transportation. Trade services include retailing 

and wholesaling goods, generally without transformation. The 

column headed “detailed commodity” designates the specific 

commodity being used. Domestic commodities are numbered 

1 through 12, and “imports” is the entry in the bottom cell of 

the column. (However, imports are currently considered out 

of scope for the PPI. Imports are therefore not included in any 

of the aggregation structures presented in this article.) In ex-

 A simplified input–output table representing the stage-of-processing system

Commodity produced

Consumed for:

Intermediate demand Final demand

Commodity 

type

Detailed 

commodity

1 2 3 4 5 6 7 8 9 10 11 12 PC CI Gov Exp

Unprocessed goods

1 A B C D E F G H I J K L M N O P

2 Q

3 R

Processed goods

4 S

5 T

6 U

Construction 7 V

Traditional services

8 W

9 X

Transportation 

 services

10 Y

Trade services

11 Z

12 AA

Imports AB

NOTE: PC = personal consumption, CI = capital investment, Gov = government purchase, and Exp = export.

Exhibit 1.

Crude goods Intermediate goods Finished goods
Monthly Labor Review • February 2011 5

hibit 1, commodities are valued in terms of producer prices; 

hence, goods and traditional services are valued in terms 

of the actual commodity sold, but transportation services 

and trade services are valued in terms of margins, not the 

value of the commodity transported or sold. The sum of the 

producer’s value, transportation costs, and trade margin is 

equal to the purchaser’s value. 

Spanning the headers “intermediate demand” and “final demand” is the header “consumed for.” Commodities 

can be consumed for either intermediate demand or final 

demand. Consumption for intermediate demand occurs 

when a commodity is consumed by an industry as an input 

to production, whereas consumption for final demand occurs when a commodity is consumed as part of personal 

consumption, capital investment, government purchase, or 

exports. Also spanned by “consumed for” are the column 

heads denoting the specific industries within intermediate demand and the segments of final demand in which 

the commodity is consumed. Consuming industries (under the heading “intermediate demand”) are numbered 

1 through 12; the primary commodity produced by each 

industry corresponds to the commodity with the same 

number. For example, the primary production of industry 

1 is commodity 1. The columns under the “final demand” 

header denote the four ways in which commodities can be 

used for final demand: personal consumption (PC), capital 

investment (CI), government purchase (Gov), and export 

(Exp). Cell E, for example, indicates the consumption of 

commodity 1 by industry 5, whereas cell M shows the 

personal consumption of commodity 1. The total consumption of commodity 1 includes cells A through P. The 

total consumption by industry 5 is represented by cells E 

through AB. 

The finished goods price index measures changes in the 

prices of the commodities shown in the darkest area of 

exhibit 1. The darkest area is composed of all processed 

and unprocessed goods consumed as either personal consumption expenditures or capital investment. A heavy 

truck purchased by a business is an example of a processed 

finished good consumed for capital investment, whereas 

an egg purchased by a consumer is an example of an unprocessed finished good sold for personal consumption. 

The intermediate goods index measures changes in prices 

for goods shown in the medium-gray area of exhibit 1. 

The medium-gray area encompasses all processed goods 

consumed by businesses as inputs to production, including processed goods that still require further processing as 

well as physically complete, nondurable goods purchased 

by businesses as inputs for their operations. Car parts, 

which will eventually be manufactured into an automobile, are an example of a processed intermediate good still 

requiring further processing, whereas gasoline consumed 

by a trucking firm is an example of a physically complete 

intermediate good consumed as an input to production. 

Finally, the crude goods index measures price change in 

the goods indicated by the light-gray area of the exhibit. 

This index covers all unprocessed goods consumed by 

businesses as inputs to production. Eggs used in the production of cakes by a food manufacturer are an example of 

a crude good consumed by a business.2

Developing the experimental aggregation

Exhibit 2 is an I–O table comparing the coverage of the 

current SOP system with that of the new, experimental 

aggregation system. The current SOP system tracks price 

changes for commodities included in the dark-gray area of 

exhibit 2. As stated earlier, this group of commodities comprises both processed and unprocessed goods consumed 

for the following three purposes: intermediate demand, 

personal consumption, and capital investment. The lightgray area indicates the areas of the economy that the experimental PPI aggregation system adds to the areas already 

included in the SOP system. These additional portions of 

the economy include processed and unprocessed goods sold 

to government or as exports, as well as construction, traditional services, transportation services, and trade services 

sold to all portions of final or intermediate demand. 

Criteria for a potential PPI aggregation system. In developing the experimental aggregation system, two main criteria were considered. First, the system should be designed 

in such a way as to alleviate or minimize problems resulting from multiple counting. Second, the system should be 

analytically useful.

Multiple counting can lead to overstated or understated measures of inflation. Multiple counting occurs 

when the price for a specific commodity and the inputs 

to production for that same commodity are included in 

an aggregate index. Before 1978, for example, the PPI

program highlighted the all commodities index as its 

primary aggregate index. This index aggregates prices for 

all goods sold in the economy, using weights that reflect 

sales to all portions of intermediate and final demand. The 

all commodities index was the subject of serious criticism 

when petroleum prices spiked in the 1970s. Price change, 

as measured by the all commodities index, was seen as 

exaggerated because the index included both gasoline sold 

for final demand and crude petroleum, the primary input 

used in the production of gasoline. Multiple counting was 
PPI Experimental Aggregation

6  Monthly Labor Review • February 2011

an important factor in the decision for the PPI program 

to move from highlighting the all commodities index to 

calculating, publishing, and highlighting SOP indexes.3

The SOP system substantially reduced multiple counting by separating goods into three stages: crude, intermediate, and finished. The system does, however, still have 

some multiple counting, specifically in its intermediate 

goods index. For example, a firm may extract iron ore and 

sell the ore to a second firm that manufactures steel. This 

steel then may be sold to a third firm that produces engine 

parts. These engine parts could then be sold to a fourth 

firm that manufactures engines. Finally, the engines may 

be sold to an automobile manufacturer that produces automobiles to sell to consumers. The prices for iron ore and 

automobiles would be included in the crude and finished 

goods indexes, respectively, but the intermediate goods 

index would include the prices for the steel, engine parts, 

and engines. Including prices from all three of these transactions in the intermediate goods index leads to multiple 

counting within the index.

The second criterion is that the aggregation system 

be analytically useful. The SOP system is more analytically useful than the all commodities index, as the system 

potentially allows price changes to be tracked through 

the various segments of the economy. In developing an 

aggregation system that incorporates prices for services 

and construction, the possible analytical functions of the 

system were considered. 

The new PPI aggregation system was designed to satisfy the two criteria identified earlier. To avoid multiple 

counting, the system separates final-demand transactions 

from intermediate-demand transactions and, in some cases, 

voids instances of multiple counting. One of the reasons the 

system is useful for analysis is that it combines commodity 

indexes into meaningful final-demand and intermediatedemand aggregates. The aggregates convey information 

about the types of commodities contributing to inflation at 

both the final-demand level and at earlier stages of production, and can be used to track price change through the 

economy. 

Experimental PPI aggregation system. The new PPI experimental aggregation system tracks price change for goods, 

services, and construction sold to all portions of final deCoverage of the current stage-of-processing system and of the experimental PPI system

Commodity produced Consumed for:

Commodity 

type

Detailed 

commodity

Intermediate demand Final demand

1 2 3 4 5 6 7 8 9 10 11 12 PC CI Gov Exp

Unprocessed goods

1

2

3

Processed goods

4

5

6

Construction 7

Traditional services

8

9

Transportation 

services

10

Trade services

11

12

Imports

NOTE: PC = personal consumption, CI = capital investment, Gov = government purchase, and Exp = export.

Exhibit 2.

Coverage of the current SOP system Additional coverage added by the experimental system
Monthly Labor Review • February 2011 7

mand and intermediate demand. The final-demand portion 

of the experimental aggregation system is discussed first, 

followed by the intermediate-demand portion. It should 

be noted that the PPI program does not currently calculate 

price indexes for all domestically produced commodities 

because of incomplete coverage in some portions of the 

economy. The experimental aggregation system therefore 

does not include price indexes for commodities not currently covered by the PPI. The majority of commodities that 

the PPI program does not have price indexes for are services 

and construction commodities. Educational services, residential construction and rentals, restaurants, research and 

development services, and computer design services are 

among the commodities that the PPI does not cover.4

Final demand

The final-demand segment of the new PPI experimental 

aggregation system tracks price change for commodities 

sold for personal consumption, capital investment, government purchase, and export. The segment is composed 

of six main price indexes: final demand goods, final demand construction, final demand traditional services, 

final demand transportation services, final demand trade 

services, and overall final demand. The final-demand segment of the system is presented in the I–O table shown 

as exhibit 3. 

Final demand goods price index. The final demand goods 

price index measures price change for all processed and 

unprocessed goods consumed as part of personal consumption expenditures, capital investment, exports, or 

government purchases. Fresh fruits sold to consumers and 

computers sold as exports are examples of transactions included in the final demand goods price index. The index 

covers the same transactions as the current finished goods 

index in the SOP system but adds government purchases 

and exports of goods. In exhibit 3, the coverage of the final 

demand goods index is represented by the dark-gray area. 

Final demand construction price index. This index tracks 

prices for construction sold for personal consumption, 

capital investment, export, or government purchase. The 

orange area of the exhibit represents the transactions covered by the final demand construction price index. The 

majority of construction is consumed in the final-demand 

portion of the economy and would be included in the final 

demand construction index, given that BEA defines new 

Exhibit 3. Final demand in the experimental PPI system

Commodity produced Consumed for:

Commodity 

type

Detailed 

commodity

Intermediate demand (ID) Final demand (FD)

1 2 3 4 5 6 7 8 9 10 11 12 PC CI Gov Exp

Unprocessed goods

1

2

3

Processed goods

4

5

6

Construction 7

Traditional services 8

9

Transportation services 10

Trade services 11

12

Imports

NOTE: PC = personal consumption, CI = capital investment, Gov = government purchase, and Exp = export.

FD goods FD construction FD traditional services FD transportation services FD trade services
PPI Experimental Aggregation

8 Monthly Labor Review • February 2011

construction as capital investment. 

Final demand services price indexes. The new aggregation 

system includes final demand price indexes for three types 

of services—traditional services, transportation services, 

and trade services. These indexes track price changes for 

such services sold for personal consumption, capital investment, export, or government purchase.

The coverage of the index for final demand traditional services is shown in purple in exhibit 3. Medical 

care and accounting services purchased by consumers are 

examples of final demand traditional services. The index 

for final demand transportation services accounts for the 

blue area of the exhibit. Rail transportation for individuals and shipment of final-demand goods are examples of 

final-demand transportation services. The index for final 

demand trade services tracks prices of transactions represented by the dark-green portion of the exhibit. The 

service of selling groceries to consumers is an example 

of a final-demand trade service. It is important to note, 

however, that the type of prices used by the PPI program 

to construct its trade indexes is different from the type of 

prices typically included in PPIs. As explained earlier, the 

value of trade services is measured in terms of trade margins, which are calculated by subtracting the price paid 

by a trade establishment to acquire a specific good or set 

of goods from the price received by the establishment for 

selling the same good or set of goods. Thus, the indexes 

for trade should be interpreted as measuring changes in 

the price margins received by producers of trade services. 

Overall final demand index. In addition to the detailed 

final demand indexes for goods, services, and construction described in this article, the experimental system also 

includes an index for overall final demand. That index 

comprises all goods, services, and construction sold for 

personal consumption, for capital investment, for export, 

or to government. The overall final demand index tracks 

price change for transactions shown in all the shaded areas of exhibit 3.5

Historical final-demand data from the experimental index 

system. Although the PPI program began publishing the 

experimental aggregation system data with the release of 

January 2011 data, the calculation of most of the indexes 

in the system began with November 2009 data. This section presents and analyzes November 2009–November 

2010 final-demand data from the PPI experimental aggregation system. 

The overall final demand index will likely be considered the headline number within the experimental PPI 

system—similar to the finished goods index in the current 

SOP system. For this reason, the index for final demand is 

compared with the current index for finished goods. 

Chart 1 displays the index for overall final demand and 

the indexes for its three main components—final-demand 

goods, final-demand services, and final-demand construction—along with the index for finished goods, for the 

period from November 2009 to November 2010. The indexes for overall final demand and finished goods behaved 

somewhat similarly over the sample period: both indexes 

increased from November 2009 to November 2010 and 

shared almost the same set of turning points (peaks and 

troughs). Both the finished goods and final demand index 

peaked in January 2010 and May 2010 and hit a trough 

in February 2010 and June 2010. The only turning point 

not shared by the two series occurred in December 2009, 

when the index for final demand exhibited a slight trough 

that was not shared with the finished goods index. Although the indexes behaved fairly similarly over the period examined, the final demand index rose at a slower 

rate than the index for finished goods. The index for final 

demand advanced 2.5 percent from November 2009 to 

November 2010, while the index for finished goods increased 3.5 percent. 

There are four differences between the finished goods 

and final demand indexes that potentially can explain the 

slower rate of rate of increase in the final demand index as 

compared with the finished goods index. Namely, the final 

demand index includes prices for services, construction, 

government purchases of goods, and exports of goods, 

whereas the index for finished goods does not include 

these prices. In addition to enabling comparisons between 

the overall final demand and finished goods indexes, chart 

1 can be used to determine which of the main components 

of final demand caused the variation in trend between the 

final demand and finished goods indexes. 

The overall final demand index and all of its component indexes increased from November 2009 to November 2010. The index for overall final demand rose 2.5 

percent, final-demand goods prices increased 4.4 percent, 

final-demand services prices rose 1.5 percent, and finaldemand construction prices increased 0.6 percent. Most 

of the slower rate of increase in overall final demand prices 

as compared with finished goods prices can be attributed 

to services prices. Services carry a high weight in the final 

demand index (63 percent), and final-demand services 

prices rose substantially less than finished goods prices. 

Construction prices also contributed—though by much 

less—to the slower rate of increase in final demand prices 
Monthly Labor Review • February 2011 9

as compared with finished goods prices; construction accounts for only approximately 2 percent of final demand. 

In contrast to the services and construction indexes, the 

final demand goods index rose at a faster rate than the finished goods index, increasing 4.4 percent from November 

2009 to November 2010. This faster rate of increase can 

be traced to prices for government purchases and exports. 

Intermediate demand

The intermediate-demand portion of the PPI experimental 

aggregation system tracks price change for goods, services, 

and construction products sold to businesses as inputs to 

production (excluding capital investment). In order to 

meet the needs of different data users, the experimental 

aggregation system includes two separate treatments of 

intermediate demand, each designed to address a different 

analytical use. The first approach organizes intermediatedemand commodities by commodity type just as the current PPI SOP system does but with more types of commodities included. The resulting intermediate demand 

indexes provide value to data users by supplying specific 

information pertaining to the type(s) of commodities 

creating inflationary pressure in the economy. The second 

approach organizes intermediate-demand commodities 

into stages by production flow with the explicit goal of 

developing a forward-flow model of production and price 

change. A forward-flow model assigns commodities to 

stages in such manner that the commodities included in 

each sequential stage are the inputs used to produce commodities in the next stage, with the last stage in the system 

composed of final-demand goods. The goal of the indexes 

of intermediate demand by production flow is to allow 

data users to better study price transmission through the 

various stages of the economy. 

Intermediate demand by commodity type. The intermediate-demand-by-commodity-type organization of intermediate demand is similar in its underlying methods to 

the treatment of final demand in the experimental aggregation system. The relevant indexes track price change for 

intermediate-demand commodities grouped by type of 

commodity, where commodity types include unprocessed 

goods, processed goods, construction, traditional services, 

 Chart 1. The overall final demand index, its three main component indexes, and the finished goods index, 

November 2009–November 2010 

105

104

103

102

101

100

99

Nov. Dec. Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. 

2009 2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010

105

104

103

102

101

100

99

Final demand

Final demand construction

Final demand goods Finished goods

Final demand services

Index

(Nov. 2009 = 100)

Index

(Nov. 2009 = 100)
PPI Experimental Aggregation

10 Monthly Labor Review • February 2011

transportation services, and trade services. The indexes of 

intermediate demand by commodity type are presented in 

terms of the I–O table shown as exhibit 4. 

The intermediate-demand-by-commodity-type portion of the system includes two main goods price indexes: unprocessed goods for intermediate demand, and 

processed goods for intermediate demand. These indexes 

track price changes for the areas of the economy represented by the light-gray and medium-gray areas, respectively, of exhibit 4. The unprocessed goods for intermediate demand index measures price change for unprocessed 

goods purchased by businesses as inputs to production, 

and the processed goods for intermediate demand index 

tracks price change for fully or partially processed goods 

purchased by firms as inputs to production. These two indexes are identical, respectively, to the crude and intermediate goods indexes in the current PPI SOP system. 

The intermediate-demand-by-commodity portion of 

the system includes a price index for intermediate-demand construction; the index measures price change for 

construction purchased by firms as inputs to production. 

The light-orange area of the exhibit represents the transactions covered by the intermediate demand construction 

price index. Since BEA defines new construction as a part 

of the final-demand portion of the economy, this index 

tracks price change for maintenance and repair construction purchased by firms. 

The experimental system includes intermediate demand 

price indexes for three types of services: traditional services, 

transportation services, and trade services. The intermediate traditional services index measures price change in traditional services purchased by firms as inputs to production. 

Legal and accounting services purchased by businesses are 

examples of intermediate-demand traditional services. This 

index measures price change for the transactions shown in 

the light-purple area of exhibit 4. The intermediate demand transportation services index measures price change 

in transportation-related services sold to businesses. This 

index tracks prices for transactions depicted by the lightblue area of exhibit 4. Trucking of intermediate-demand 

goods and business travel are examples of intermediate 

transportation services. The index for intermediate trade 

services measures price change in the service of retailing 

or wholesaling goods purchased by businesses as inputs 

Intermediate demand by commodity type in the experimental PPI system

Commodity produced Consumed for:

Commodity 

type

Detailed 

commodity

Intermediate demand (ID) Final demand (FD)

1 2 3 4 5 6 7 8 9 10 11 12 PC CI Gov Exp

Unprocessed goods

1

2

3

Processed goods

4

5

6

Construction 7

Traditional services

8

9

Transportation 

services

10

Trade services

11

12

Imports

NOTE: PC = personal consumption, CI = capital investment, Gov = government purchase, and Exp = export.

Exhibit 4.

Unprocessed goods for ID Processed goods for ID

ID traditional services

ID construction

ID transportation services ID trade services
Monthly Labor Review • February 2011 11

to production. The index for intermediate-demand trade 

tracks prices from transactions depicted by the green portion of exhibit 4. The service of selling car parts to an automobile manufacturer is an example of an intermediate 

trade service. 

Although the experimental system contains an overall 

final demand index, it does not include an overall intermediate demand index. An overall intermediate demand 

index would have severe multiple counting problems and 

therefore would not accurately measure price change for 

intermediate demand.

Intermediate demand by production flow. The intermediate-demand-by-production-flow treatment of intermediate demand organizes commodities into a number of 

stages and measures price changes for the commodities in 

each stage. As stated earlier, the goal of the productionflow-based treatment is to assign commodities to sequential stages such that commodities in one intermediate stage 

are used as inputs to produce commodities in the next intermediate stage until the last intermediate-demand stage, 

which contains commodities used as inputs to the production of final-demand commodities. 

The intermediate-demand stages were developed by 

using both BEA commodity-consumption and industryproduction data. Although the PPI does not cover all industries in the economy, all the data included in the BEA

tables were used to develop the stages. A four-step process 

was used by the PPI program to assign commodities to 

stages and develop the intermediate-demand-by-production-flow system. 

The first step in the process of developing stages was 

to determine the total production of each industry in the 

economy. In general, industries are classified as primary 

producers of specific goods or services; however, industries 

may also be secondary producers of other goods or services. 

A firm classified in the automobile industry, for example, 

produces primarily automobiles, but the same firm may also 

produce and sell additional commodities, such as car parts, 

scrap metal, or car rentals. These additional commodities 

are classified as secondary production. The first step therefore requires determining both the primary production and 

secondary production of each industry in the economy. The 

2002 BEA “Make of Commodities by Industries” table was 

used for this purpose.6

The second step in developing stages was to ascertain 

where the total output of each industry is consumed. This 

step requires determining, for each industry, the portion 

of the industry output consumed as final demand and 

the portion consumed as intermediate demand. For the 

intermediate-demand portion, determining which specific 

industries are consuming the industry’s output also is required. BEA 2002 “Use of Commodities by Industry” data 

were employed to make this determination.

The third step in developing stages was to assign industries to stages of production. Within a stage-based system, 

transactions can be classified as forward flow, backflow, or 

internal flow. Forward flow occurs when an industry sells 

its output to an industry classified in a forward stage of 

production (to be used as an input) or to final demand. 

Internal flow occurs when an industry sells its output to 

another industry classified within the same stage of production to be used as an input. Backflow occurs when an 

industry sells its output to an industry classified in an earlier stage of production in the system to be used as an input. 

In order to successfully develop a forward-flowing system 

of price change, industries should be assigned to stages in 

a manner that minimizes backflow and internal flow while 

maximizing forward flow within the system. 

A simple way to minimize backflow and maximize 

forward flow would be to attempt to assign industries to 

stages such that industries assigned to the final stage produce commodities consumed for final demand, industries 

assigned to the next-to-last stage produce commodities 

consumed by last-stage industries, and so on, until the first 

stage of production is reached. For example, car manufacturers would be assigned to the final stage of production, 

as they sell their output to final demand. Automobile parts 

manufacturers would be assigned to the next-to-last stage, 

since their output is consumed by car manufacturers. Steel 

mills would be assigned to the stage before that one, since 

their output is used to make car parts, and, finally, iron-ore 

manufacturers would be assigned to the first stage, as their 

output is used to make steel products. 

Unfortunately, the flow of transactions in the actual 

economy is considerably more complex than in the simple 

example just described. Even in the simple automobile example, it is easy to imagine how backflow or internal flow 

might occur. If, for example, the steel mill industry purchased car parts (to service automobiles that are used as 

part of the steel production process), backflow would result. 

Because of the complexity of the U.S. economy, the PPI 

program chose the criterion of maximizing net forward 

flow within the system to assign industries to stages. Net 

forward flow is defined as (forward shipments of the industry stage + inputs received from previous stages of process) – (backward shipments of the industry stage + inputs 

received from forward stages of process). 

The PPI program implemented a two-step procedure to 

attempt to maximize net forward flow. In the first step, a 
PPI Experimental Aggregation

12 Monthly Labor Review • February 2011

set of rules was used to assign industries to stages and select 

the appropriate number of stages for the system. The system that the PPI program eventually chose is a four-stage 

system. The set of rules used to assign industries to the four 

stages is summarized as follows:

Assign industry to stage 4 if shipments sold to final demand ≥ 75 percent of industry production.

Assign industry to stage 3 if shipments sold to final demand and to stage 4 ≥ 65 percent of industry production and shipments sold to final demand < 75 

percent of production.

Assign industry to stage 2 if shipments sold to final 

demand, to stage 4, and to stage 3 ≥ 65 percent of 

industry production; and shipments sold to final demand and to stage 4 < 65 percent of production; and 

shipments sold to final demand < 75 percent.

Assign industry to stage 1 if it does not meet the conditions of stage 4, 3, or 2.

Before selecting the number of stages and set of rules 

just described, the PPI program examined many different 

sets of rules and numbers of stages. It eventually chose the 

aforementioned system because it performed very well in 

terms of maximizing net forward flow and minimizing internal flow. 

After the assignment of industries to stages by use of 

the aforementioned rules, the second step in the procedure 

to maximize net forward flow was to examine the effects 

on net forward flow of moving individual industries to 

stages to which they were not originally assigned. In cases 

in which there were substantial gains to net forward flow, 

Production

stage 2

Production

stage 4

Production

stage 3

Production

stage 1

Industry 1

Industry 3

Industry 8

Final

Demand

Industry 6

Industry 7

Industry 12

Industry 5

Industry 9

Industry 11

Industry 2

Industry 4

Industry 10

industries were left in the new stage. 

The PPI production-flow-based system exhibits strong 

forward flow and little backflow. After weighting, 83.6 percent of transactions in the system are forward flowing, 5.7 

percent are back flowing, and 10.7 percent are internally 

flowing.7

 The final step in constructing stages for the productionflow-based intermediate demand indexes was to determine 

the commodities to be included and weights to be used in 

the intermediate demand indexes. It is important to understand that these indexes track prices for inputs consumed 

by industries in each of the four stages of production, as 

opposed to prices for the output produced by industries in 

each of the four stages of production. These indexes also 

exclude prices for inputs both produced and consumed 

within an industry production stage, thereby eliminating 

any multiple counting of price change. The fourth intermediate demand index, for example, tracks price change for 

inputs consumed, but not produced, by industries included 

in the fourth stage of production. Recall that industries 

classified in the fourth stage of production mostly produce 

goods sold to final demand. The stage 4 intermediate demand index therefore measures price change in the inputs 

to production of industries that produce primarily finaldemand goods (stage 4 producers). 

Exhibit 4 can be extended to clarify this procedure. 

Recall that in the exhibits the economy contains 12 commodities and 12 industries, and each industry produces 

primarily one commodity. Industry 1, for example, produces primarily commodity 1. Industry 1, however, may 

also produce any of the other 11 commodities as secondary 

production. According to the intermediate-demand-byproduction-flow approach, each of the 12 industries would 

be assigned to one of the four stages of production. Hypothetically, the assignments may be as follows: 
Monthly Labor Review • February 2011 13

where the output of industries in production stage 4 is 

consumed primarily for final demand, the output of industries in production stage 3 is consumed primarily by 

stage 4 industries as intermediate demand, the output of 

industries in production stage 2 is consumed primarily by 

stage 3 industries as intermediate demand, and the output 

of industries in production stage 1 is consumed primarily 

by stage 2 industries as intermediate demand. 

Exhibit 5 presents the intermediate-demand-by-production-flow portion of the experimental aggregation 

system within an I–O framework. This I–O table is a 

modified version of the earlier tables that is virtually the 

same as the others except that it reorganizes the consuming industries into four stages. Cell “a,” for example, represents the portion of commodity 1 consumed by industry 

3, which is classified in the first stage of production. Cell 

“b” represents the portion of commodity 5 consumed by 

industry 4, which is classified in the second stage of production.

The intermediate-demand-by-production-flow portion of the system includes four main indexes: intermediate demand stage 1, intermediate demand stage 2, intermediate demand stage 3, and intermediate demand stage 

4. These indexes track prices for inputs consumed by industries classified in each of the four stages of production, 

excluding inputs both produced and consumed within the 

same stage of production. The intermediate demand stage 

1 index measures price change for transactions represented 

by the yellow boxes in exhibit 5, the intermediate demand 

stage 2 index measures price change for transactions represented by the red area, the intermediate demand stage 

3 index does the same for transactions indicated by the 

peach-colored area, and the intermediate demand stage 4 

index does the same for transactions shown in the lightgray portion. As shown earlier, the intermediate demand 

indexes were constructed with the goal of being able to 

analyze forward price transmission through the stages of 

production and eventually to final demand. 

Comparison of intermediate demand by commodity type and 

by stage. As explained earlier, the PPI experimental aggregation system has two separate treatments of the intermediate-demand portion of the economy. The two treatments aggregate the same set of intermediate-demand 

Intermediate demand by production flow in the experimental PPI system

Commodity produced

Consumed for:

Intermediate demand (ID)

Final demand (FD)

Stage 1 Stage 2 Stage 3 Stage 4

Commodity 

type

Detailed 

commodity

Ind. 

1

Ind. 

3

Ind. 

8

Ind. 

2

Ind. 

4

Ind. 

10

Ind. 

5

Ind. 

9

Ind. 

11

Ind. 

6

Ind. 

7

Ind. 

12 PC CI Gov Exp

Unprocessed goods

1 a

2

3

Processed goods

4

5 b

6

Construction 7

Traditional services 8

9

Transportation 

services

10

Trade services 11

12

Imports

NOTE: PC = personal consumption, CI = capital investment, Gov = government purchase, and Exp = export.

Exhibit 5.

Stage 1 ID Stage 2 ID Stage 3 ID Stage 4 ID
PPI Experimental Aggregation

14 Monthly Labor Review • February 2011

commodities but were developed to meet the needs of 

different types of data users. The indexes of intermediate demand by commodity type provide analytical value 

to data users by supplying specific information pertaining 

to the types of commodities creating inflationary pressure 

within the economy. The indexes of intermediate demand 

by production flow allow data users to study price transmission through various stages of the economy. 

There are three substantive differences between the two 

types of intermediate demand indexes. First, organization 

by production flow allows prices for certain commodities 

to be included in more than one intermediate demand 

index, whereas organization by commodity type results in 

each commodity being assigned to only one intermediate 

demand index. If commodity 2, for example, is consumed 

as an input to production by industries classified in production stages 1, 3, and 4, prices for commodity 2 would 

be included in each of these indexes for intermediate demand by stage. Second, in the indexes of intermediate demand by production flow, the prices for goods, construction, and services are combined, whereas in the indexes of 

intermediate demand by commodity type, prices for unprocessed goods, processed goods, construction, and the 

three types of services are separated. Finally, the indexes of 

intermediate demand by production flow do not multiplecount price changes because they are net-input indexes. 

The indexes of intermediate demand by commodity type 

minimize but do not eliminate multiple counting. For 

example, the index of processed goods for intermediate 

demand includes prices for both automobile parts and the 

steel used as an input to produce automobile parts. 

Historical intermediate demand index data. As stated earlier, the calculation of most of the indexes in the system 

began with November 2009 data. This section presents 

and analyzes November 2009–November 2010 intermediate-demand data from the experimental aggregation 

system. 

To examine how the addition of services and construction affect the overall picture of inflation with regard to 

intermediate demand by commodity type, chart 2 presents 

the index levels for unprocessed goods for intermediate 

demand, processed goods for intermediate demand, intermediate-demand services, and intermediate-demand con-

 Chart 2. Indexes of intermediate demand by commodity type, November 2009–November 2010

115

113

111

109

107

105

103

101

99

Unprocessed goods for intermediate demand Processed goods for intermediate demand

Services for intermediate demand Construction for intermediate demand

Index

(Nov. 2009 = 100)

Index

(Nov. 2009 = 100)

Nov. Dec. Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. 

2009 2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010

115

113

111

109

107

105

103

101

99
Monthly Labor Review • February 2011 15

struction from November 2009 to November 2010. Recall 

that the indexes for unprocessed goods for intermediate 

demand and processed goods for intermediate demand 

in the new system are identical to the indexes for crude 

goods and intermediate goods, respectively, in the current 

PPI SOP system. The new inflation information provided 

in the intermediate-demand-by-commodity-type portion 

of the experimental aggregation system therefore comes 

from the index of services for intermediate demand and 

that of construction for intermediate demand.

Each of the indexes for intermediate demand by commodity type in chart 2 increased from November 2009 to 

November 2010. The goods indexes, however, rose more 

than the services and construction indexes. During the 

November 2009–November 2010 period, the unprocessed 

goods for intermediate demand index increased 12.9 percent and the processed goods for intermediate demand 

index rose 6.3 percent, while the indexes for services for 

intermediate demand and construction for intermediate 

demand increased 1.8 percent and 1.3 percent, respectively. The experimental intermediate demand indexes therefore indicate a lower overall level of intermediate-demand 

inflation over the sample period in comparison with the 

current SOP indexes. 

As explained earlier, the production-flow treatment 

of intermediate demand organizes commodities into 

four stages. Chart 3 presents month-to-month percent 

changes in the four indexes of intermediate demand by 

production flow and in the final demand index. The chart 

includes four panels, and each panel compares indexes at 

sequential stages within the system. For example, the first 

panel compares the index for final demand with the stage 

4 intermediate demand index. This comparison shows 

how final-demand commodity prices are related to prices 

for the inputs used to produce final-demand commodities. 

Chart 3 shows that close relationships exist between 

sequential stages within the system. For example, the 

paths of the final demand and stage 4 intermediate demand indexes are closely related: both indexes move in 

the same direction over the sample period, with the exception of December 2009, when the final demand index 

fell 0.06 percent and the stage 4 intermediate demand 

index inched up 0.04 percent. Earlier in the production 

chain, the stage 3 and stage 4 intermediate demand indexes moved in the same direction over every month of 

the sample period. This analysis could be carried through 

to all stages of production, but the primary point of the 

analysis is that there appear to be clear correlations between indexes for sequential stages of production and 

between the last stage of production and final demand. 

To better understand these relationships, however, causal 

econometric models would need to be estimated to study 

the direction of feedback among indexes within the system. At the time this article was written, sufficient data 

were not available to estimate econometric models. 

WITH THE RELEASE OF DATA FOR JANUARY 2011, 

the PPI program introduced a new, experimental aggregation system. This system expands upon the current 

SOP system by including price indexes for services and 

construction as well as goods. The system covers both 

the final-demand and intermediate-demand portions 

of the economy. Indexes for the final-demand portion 

of the economy track price change for specific types of 

commodities sold for personal consumption, capital investment, government purchase, or export. Indexes in the 

intermediate-demand portion of the system track price 

change for commodities purchased by businesses as inputs to production. To meet differing needs of data users, 

the alternative aggregation system includes two separate 

treatments of intermediate demand. The first aggregates 

price indexes for intermediate-demand commodities on 

the basis of the type of commodity, where major commodity types include processed goods, unprocessed goods, 

traditional services, transportation services, and trade 

services. The second treatment aggregates intermediatedemand commodities into four stages with an emphasis 

on maximizing forward flow of commodities.

In order to explain the theoretical concepts underpinning the PPI alternative aggregation system, this article 

described the alternative aggregation system at a highly 

generalized level. In actuality, the experimental aggregation system includes many detailed indexes beneath the 

indexes that the article describes. The exhibits in the appendix present the entire alternative aggregation structure 

published by the PPI program. 

The PPI program is currently soliciting feedback from 

data users with respect to the experimental aggregation 

indexes presented in this article. To provide feedback, 

please contact Jonathan Weinhagen at weinhagen.

jonathan@bls.gov.
PPI Experimental Aggregation

16 Monthly Labor Review • February 2011

 Chart 3. 

Percent change Percent change

Monthly percent change in indexes of intermediate demand by production flow and in the index of 

final demand, December 2009–November 2010

1.2

1.0

0.8

0.6

0.4

0.2

0.0

–0.2

–0.4

Final demand Stage 4 intermediate demand

Stage 4 intermediate demand Stage 3 intermediate demand

Stage 3 intermediate demand Stage 2 intermediate demand

Stage 2 intermediate demand Stage 1 intermediate demand

Percent change Percent change

Dec. Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov.

2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010

1.2

1.0

0.8

0.6

0.4

0.2

0.0

–0.2

–0.4

Percent change Percent change

Percent change Percent change

2.0

1.5

1.0

0.5

0.0

0.5

–1.0

2.0

1.5

1.0

0.5

0.0

–0.5

–1.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

–1.0

–2.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

–1.0

–2.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

–1.0

–2.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

–1.0

–2.0

Dec. Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov.

2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010

Dec. Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov.

2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010

Dec. Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov.

2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010
Monthly Labor Review • February 2011 17

Notes

1 The BEA “Use of Commodities by Industries” table can be found 

at www.bea.gov/industry/io_benchmark.htm#2002data (visited Jan. 

20, 2011). Choose the 2002 Standard Make and Use tables at the detailed level. 

2 All PPI aggregate indexes, including the SOP indexes and experimental aggregation indexes, are constructed from producers’ output 

prices. In both the SOP system and experimental aggregation system 

presented in this article, goods prices are aggregated according to the 

type of buyer, and producer output prices are used as a proxy for actual 

prices paid by the buyer. In many cases, the same commodity is purchased by different types of buyers and is therefore included in more 

than one aggregate index. In these cases, the same PPI commodity 

index often is used in all aggregations. For example, regular gasoline 

is purchased for personal consumption, export, government use, and 

business use. The PPI program publishes only one commodity index for 

regular gasoline (wpu057104), and this index is used in all aggregations 

regardless of whether the gasoline is sold for personal consumption, as 

an export, to government, or to businesses.

3 The PPI program continues to publish the all commodities index 

in spite of multiple counting problems because the index is referenced 

in many price escalation contracts. Despite this use of the all commodities index, the PPI program does not recommend using this index 

for the purpose of contract escalation or data analysis. 

4 For a list of all areas that the PPI does not cover, see www.bls.gov/

ppi/ppinoncoverage.htm (visited Feb. 14, 2011). 

5 In contrast to the PPI for overall final demand, which is composed of prices for commodities sold for personal consumption, capital 

investment, government purchase, and export, the BEA definition of 

gross domestic product (GDP) and of the GDP implicit price deflator 

comprise personal consumption, capital investment, government purchases, and net exports (exports minus imports). 

6 The BEA “Make of Commodities by Industries” table is located 

on the Web at www.bea.gov/industry/io_benchmark.htm#2002data 

(visited Jan. 25, 2011).

7 For a detailed explanation of how the PPI program developed the 

intermediate demand by production flow indexes, see the paper “PPI

Data Analysis of IO Data for Experimental Aggregation System” at 

www.bls.gov/ppi/expaggbeadata.pdf (visited Feb. 14, 2011). 
PPI Experimental Aggregation

18 Monthly Labor Review • February 2011

 

 Standard groupings

Final demand 

 Final demand goods

 Final demand foods

 Finished consumer foods

 Finished consumer foods, crude

 Finished consumer foods, processed

 Government purchased foods

 Foods for export

 Final demand energy

 Finished consumer energy goods

 Government purchased energy

 Energy for export

 Final demand goods less foods and energy

 Finished goods less foods and energy

 Finished consumer goods less foods and energy

 Nondurable consumer goods less foods and energy

Durable consumer goods

 Private capital equipment

 Private capital equipment for manufacturing industries

Private capital equipment for nonmanufacturing industries

 Government purchased goods, excluding foods and energy

 Government purchased goods excluding foods, energy, and capital equipment

 Government purchased capital equipment

 Goods for export, excluding foods and energy

 Final demand services

 Final demand traditional services

 Finished traditional services

 Finished consumer traditional services

 Private capital investment traditional services

 Government purchased traditional services

 Government purchased traditional services, excluding capital investment

 Government purchased traditional capital investment services

 Traditional services for export

 Final demand transportation services

 Transportation of passengers for final demand

 Transportation of private passengers

 Transportation of government passengers

 Transportation of passengers for export

 Transportation of goods for final demand

 Transportation of finished goods

 Transportation of personal consumption goods

Transportation of private capital equipment

 Transportation of government purchased goods

 Transportation of exports

 Final demand trade services

 Trade of finished goods

 Trade of personal consumption goods

 Trade of private capital equipment

Appendix: The indexes of the experimental producer price index system

Exhibit A-1. Experimental producer price indexes for final demand
Monthly Labor Review • February 2011 19

 

 

 Trade of government purchased goods

 Trade of government purchased goods, excluding capital equipment

Trade of government purchased capital equipment

 Trade of exports

 Final demand construction

 Construction for private capital investment

 Construction for government

Special groupings

Final demand less exports

Final demand less government

Final demand less foods, food and beverage for immediate consumption, and energy

Final demand less foods and energy

Final demand less foods and food and beverage for immediate consumption

Final demand less foods

Final demand less energy

Final demand less trade services

Final demand less distributive services

Final demand goods less energy

Final demand goods less foods

Final demand services less trade services

Final demand distributive services

Final demand goods plus final demand distributive services

Total finished goods, services, and construction

Total finished less foods, food and beverage for immediate consumption, and energy

Total finished less foods and energy

Total finished less foods and food and beverage for immediate consumption

Total finished less foods

Total finished less energy

Finished goods

Finished goods less energy

Finished goods, excluding foods

Finished services

Private capital investment services

Finished distributive services

Finished services less trade services

Finished services less distributive services

Total private capital investment (goods, services, and construction)

Finished goods plus finished distributive services

Total exports

Goods for export

Services for export

Total government purchases

Government purchased goods

Government purchased services

Personal consumption

Personal consumption goods (finished consumer goods)

Personal consumption goods less energy

Personal consumption goods less foods

Personal consumption services

Personal consumption less trade services

Personal consumption less distributive services

Exhibit A-1. Continued—Experimental producer price indexes for final demand
PPI Experimental Aggregation

20 Monthly Labor Review • February 2011

Experimental producer price indexes for intermediate demand by commodity type

Standard groupings

Processed goods for intermediate demand

Materials and components for manufacturing

 Materials for manufacturing

 Materials for food manufacturing

 Materials for nondurable manufacturing

 Materials for durable manufacturing

 Components for manufacturing

 Components for nondurable manufacturing

 Components for durable manufacturing

Materials and components for construction

 Materials for construction

 Components for construction

Processed fuels and lubricants for intermediate demand

 Processed fuels and lubricants to manufacturing industries

 Processed fuels and lubricants to nonmanufacturing industries

Containers for intermediate demand

Supplies for intermediate demand

 Supplies to manufacturing industries

 Supplies to nonmanufacturing industries

 Supplies to nonmanufacturing industries, feeds

 Supplies to nonmanufacturing industries, other than feeds

Unprocessed goods for intermediate demand

Unprocessed foodstuffs and feedstuffs

Unprocessed nonfood materials

 Unprocessed nonfood materials except fuel

 Unprocessed nonfood materials except fuel to manufacturing industries

 Unprocessed nonfood materials except fuel to nonmanufacturing industries

 Unprocessed fuel

 Unprocessed fuel to manufacturing industries

 Unprocessed fuel to nonmanufacturing industries

Services for intermediate demand

Traditional services for intermediate demand

 Traditional services for manufacturing industries

 Traditional services for nonmanufacturing industries

Transportation services for intermediate demand

 Intermediate transportation of passengers

 Intermediate transportation of passengers to manufacturing industries

 Intermediate transportation of passengers to nonmanufacturing industries

 Intermediate transportation of goods

Trade services for intermediate demand

Construction for intermediate demand

Special groupings

Processed materials less foods and feeds

Processed foods and feeds

Processed energy goods

Processed materials less energy

Processed materials less foods and energy

Intermediate distributive services

Processed goods plus intermediate distributive services

Unprocessed materials less agricultural products

Unprocessed energy materials

Unprocessed materials less energy

Unprocessed nonfood materials less energy

Exhibit A-2.
Monthly Labor Review • February 2011 21

Standard groupings

Stage 4 intermediate demand

Inputs to stage 4 goods producers

 Inputs to stage 4 goods producers, goods

 Inputs to stage 4 goods producers, food

 Inputs to stage 4 goods producers, energy

 Inputs to stage 4 goods producers, goods excluding foods and energy

 Inputs to stage 4 goods producers, services

 Inputs to stage 4 goods producers, traditional services

 Inputs to stage 4 goods producers, transportation services

 Inputs to stage 4 goods producers, transportation of passengers

 Inputs to stage 4 goods producers, transportation of goods

 Inputs to stage 4 goods producers, trade services

Inputs to stage 4 services producers

 Inputs to stage 4 services producers, goods

 Inputs to stage 4 services producers, food

 Inputs to stage 4 services producers, energy

 Inputs to stage 4 services producers, goods excluding foods and energy

 Inputs to stage 4 services producers, services

 Inputs to stage 4 services producers, traditional services

 Inputs to stage 4 services producers, transportation services

 Inputs to stage 4 services producers, transportation of passengers

 Inputs to stage 4 services producers, transportation of goods

 Inputs to stage 4 services producers, trade services

 Inputs to stage 4 services producers, construction

Inputs to stage 4 construction producers

 Inputs to stage 4 construction producers, goods

 Inputs to stage 4 construction producers, energy

 Inputs to stage 4 construction producers, goods excluding foods and energy

 Inputs to stage 4 construction producers, services

 Inputs to stage 4 construction producers, traditional services

 Inputs to stage 4 construction producers, transportation services

 Inputs to stage 4 construction producers, transportation of passengers

 Inputs to stage 4 construction producers, transportation of goods

 Inputs to stage 4 construction producers, trade services

Stage 3 intermediate demand

Inputs to stage 3 goods producers

 Inputs to stage 3 goods producers, goods

 Inputs to stage 3 goods producers, food

 Inputs to stage 3 goods producers, energy

 Inputs to stage 3 goods producers, goods excluding foods and energy

 Inputs to stage 3 goods producers, services

 Inputs to stage 3 goods producers, traditional services

 Inputs to stage 3 goods producers, transportation services

 Inputs to stage 3 goods producers, transportation of passengers

 Inputs to stage 3 goods producers, transportation of goods

 Inputs to stage 3 goods producers, trade services

 Inputs to stage 3 goods producers, construction

Exhibit A-3. Experimental producer price indexes for intermediate demand by production flow
PPI Experimental Aggregation

22 Monthly Labor Review • February 2011

Inputs to stage 3 services producers

 Inputs to stage 3 services producers, goods

 Inputs to stage 3 services producers, food

 Inputs to stage 3 services producers, energy

 Inputs to stage 3 services producers, goods excluding foods and energy

 Inputs to stage 3 services producers, services

 Inputs to stage 3 services producers, traditional services

 Inputs to stage 3 services producers, transportation services

 Inputs to stage 3 services producers, transportation of passengers

 Inputs to stage 3 services producers, transportation of goods

 Inputs to stage 3 services producers, trade services

 Inputs to stage 3 services producers, construction

Inputs to stage 3 construction producers

 Inputs to stage 3 construction producers, goods

 Inputs to stage 3 construction producers, energy

 Inputs to stage 3 construction producers, goods excluding foods and energy

 Inputs to stage 3 construction producers, services

 Inputs to stage 3 construction producers, traditional services

 Inputs to stage 3 construction producers, transportation services

 Inputs to stage 3 construction producers, transportation of passengers

 Inputs to stage 3 construction producers, trade services

Stage 2 intermediate demand

Inputs to stage 2 goods producers

 Inputs to stage 2 goods producers, goods

 Inputs to stage 2 goods producers, food

 Inputs to stage 2 goods producers, energy

 Inputs to stage 2 goods producers, goods excluding foods and energy

 Inputs to stage 2 goods producers, services

 Inputs to stage 2 goods producers, traditional services

 Inputs to stage 2 goods producers, transportation services

 Inputs to stage 2 goods producers, transportation of passengers

 Inputs to stage 2 goods producers, transportation of goods

 Inputs to stage 2 goods producers, trade services

 Inputs to stage 2 goods producers, construction

Inputs to stage 2 services producers

 Inputs to stage 2 services producers, goods

 Inputs to stage 2 services producers, food

 Inputs to stage 2 services producers, energy

 Inputs to stage 2 services producers, goods excluding foods and energy

 Inputs to stage 2 services producers, services

 Inputs to stage 2 services producers, traditional services

 Inputs to stage 2 services producers, transportation services

 Inputs to stage 2 services producers, transportation of passengers

 Inputs to stage 2 services producers, transportation of goods

 Inputs to stage 2 services producers, trade services

 Inputs to stage 2 services producers, construction

Stage 1 intermediate demand

Inputs to stage 1 goods producers

 Inputs to stage 1 goods producers, goods

 Inputs to stage 1 goods producers, food

 Inputs to stage 1 goods producers, energy

 Inputs to stage 1 goods producers, goods excluding foods and energy

Continued—Experimental producer price indexes for intermediate demand by 

production flow

Exhibit A-3.
Monthly Labor Review • February 2011 23

 Inputs to stage 1 goods producers, services

 Inputs to stage 1 goods producers, traditional services

 Inputs to stage 1 goods producers, transportation services

 Inputs to stage 1 goods producers, transportation of passengers

 Inputs to stage 1 goods producers, transportation of goods

 Inputs to stage 1 goods producers, trade services

 Inputs to stage 1 goods producers, construction

Inputs to stage 1 services producers

 Inputs to stage 1 services producers, goods

 Inputs to stage 1 services producers, food

 Inputs to stage 1 services producers, energy

 Inputs to stage 1 services producers, goods excluding foods and energy

 Inputs to stage 1 services producers, services

 Inputs to stage 1 services producers, traditional services

 Inputs to stage 1 services producers, transportation services

 Inputs to stage 1 services producers, transportation of passengers

 Inputs to stage 1 services producers, transportation of goods

 Inputs to stage 1 services producers, trade services

 Inputs to stage 1 services producers, construction

Inputs to stage 1 construction producers

 Inputs to stage 1 construction producers, goods

 Inputs to stage 1 construction producers, energy

 Inputs to stage 1 construction producers, goods excluding foods and energy

 Inputs to stage 1 construction producers, services

 Inputs to stage 1 construction producers, traditional services

 Inputs to stage 1 construction producers, transportation services

 Inputs to stage 1 construction producers, transportation of passengers

 Inputs to stage 1 construction producers, transportation of goods

 Inputs to stage 1 construction producers, trade services

 Special groupings

Total goods inputs to stage 4 intermediate demand

Total services inputs to stage 4 intermediate demand

Total construction inputs to stage 4 intermediate demand

Total foods inputs to stage 4 intermediate demand

Total energy goods inputs to stage 4 intermediate demand

Total goods less food and energy inputs to stage 4 intermediate demand

Total goods inputs to stage 3 intermediate demand

Total services inputs to stage 3 intermediate demand

Total construction inputs to stage 3 intermediate demand

Total foods inputs to stage 3 intermediate demand

Total energy goods inputs to stage 3 intermediate demand

Total goods less food and energy inputs to stage 3 intermediate demand

Total goods inputs to stage 2 intermediate demand

Total services inputs to stage 2 intermediate demand

Total construction inputs to stage 2 intermediate demand

Total foods inputs to stage 2 intermediate demand

Total energy goods inputs to stage 2 intermediate demand

Total goods less food and energy inputs to stage 2 intermediate demand

Continued—Experimental producer price indexes for intermediate demand by 

production flow

Exhibit A-3.
PPI Experimental Aggregation

24 Monthly Labor Review • February 2011

Total goods inputs to stage 1 intermediate demand

Total services inputs to stage 1 intermediate demand

Total construction inputs to stage 1 intermediate demand

Total foods inputs to stage 1 intermediate demand

Total energy goods inputs to stage 1 intermediate demand

Total goods less food and energy inputs to stage 1 intermediate demand

Continued—Experimental producer price indexes for intermediate demand by 

production flow

Exhibit A-3.