[Federal Register Volume 78, Number 243 (Wednesday, December 18, 2013)]
[Pages 76657-76658]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-30072]



Bureau of Labor Statistics

Notice of Action

AGENCY: Bureau of Labor Statistics, Labor.

ACTION: Notice of action.


SUMMARY: Effective with the release of PPI data for January 2014 in 
February 2014, BLS will transition from the Stage of Processing (SOP) 
aggregation system to the Final Demand-Intermediate Demand (FD-ID) 
aggregation system. This shift will result in significant changes to 
the PPI news release, as well as other documents available from PPI, 
including the PPI Detailed Report and PPI Handbook of Methods.

DATES: The transition to the FD-ID system will occur with the release 
of January 2014 data, scheduled for release Wednesday, February 19, 

FOR FURTHER INFORMATION CONTACT: Jonathan Weinhagen, Producer Price 
Index, Bureau of Labor Statistics, telephone number 202-691-7709 (this 
is not a toll-free number), or by email to: [email protected].

SUPPLEMENTARY INFORMATION: To expand the scope of coverage for the 
Producer Price Index (PPI), the Bureau of Labor Statistics (BLS) has 
developed an aggregation system that includes price changes for 
domestic goods, services, and construction sold to final demand and 
intermediate demand.
    The transition to the FD-ID system is the culmination of a long-
standing PPI objective to improve the SOP aggregation system by 
incorporating PPIs for services, construction, government purchases, 
and exports. In comparison to the SOP system, the FD-ID system more 
than doubles current PPI coverage of the United States economy in its 
primary aggregate indexes to over 75 percent of in-scope domestic 
production. The FD-ID system was introduced as a set of experimental 
indexes in January 2011. Nearly all new FD-ID goods, services, and 
construction indexes provide historical data back to either November 
2009 or April 2010, while the indexes for goods that correspond with 
the historical SOP indexes go back to the 1970s or earlier.
    To assist with the transition to the FD-ID system, PPI has been 
providing a version of the PPI news release based on the FD-ID model, 
starting with the publication of July 2013 data in August 2013. This 
document will be labeled ``Experimental'' through the December release 
in January 2014 and is being posted to the PPI Experimental FD-ID 
Aggregation System Web page (http://www.bls.gov/ppi/experimentalaggregation.htm) about two weeks after each month's regular 
PPI release. That Web page also contains detailed methodological 
information for the FD-ID aggregation system.
    With the publication of January 2014 data in February 2014, the FD-
ID version of the PPI news release will become the official news 
release document of record.
    A Federal Register Notice requesting comments pertaining to the FD-
ID aggregation system was posted in the Federal Register Tuesday, May 
17, 2011. Federal Register Volume 76, Number 95 (Tuesday, May 17, 
2011), [Notices], [Pages 28467-28469], [FR Doc No: 2011-12042.]
    The FD-ID system will highlight the index for final demand, which 
measures price changes for goods, services, and construction sold to 
final demand: personal consumption, capital investment, government 
purchases, and exports. The composition of products in the final demand 
price index differs from that of the finished goods index in two major 
respects. First, it includes government purchases and exports. Second, 
it includes services and construction, which are not reflected in 
finished goods.

[[Page 76658]]

    The FD-ID system also includes two separate parallel treatments of 
intermediate demand: price changes for goods, services, and 
construction sold to business as inputs to production, excluding 
capital investment. The first treatment, intermediate demand by 
commodity type, measures price changes based on similarity of product 
and includes aggregate indexes for processed goods for intermediate 
demand, unprocessed goods for intermediate demand, and services for 
intermediate demand.
    The second treatment, intermediate demand by production flow, is a 
stage-based system of price indexes, where price changes for goods, 
services, and construction can be studied as they move through the 
production chain of the economy to final demand. This treatment 
includes four stages of intermediate demand, which were established to 
maximize forward flow of production through the economy, while 
minimizing backflow of production.
    These FD-ID indexes are constructed using PPI commodity indexes for 
goods, services, and construction, where products are assigned to 
various categories according to buyer type and commodity type. A 
product purchased by different classes of buyers is assigned to 
multiple FD-ID aggregates, with unique weights allocated to each 
aggregate based on the product's sales value to each buyer type.

    Signed at Washington, DC, this 9th day of December 2013.
Kimberley Hill,
Chief, Division of Management Systems, Bureau of Labor Statistics.
[FR Doc. 2013-30072 Filed 12-17-13; 8:45 am]