As part of an ongoing effort by the Bureau of Labor Statistics (BLS) program to expand Producer Price Index (PPI) coverage of the services sector of the U.S. economy, a new price index for Data Processing Services was introduced into the PPI in January 2002. This index, SIC 7374-Data Processing Services, appears in table 5 of this publication and is available online via the BLS homepage http://www. bls.gov.

The primary output of SIC 7374 is the provision of electronic data processing services. In the broadest sense, computer services companies help their customers efficiently use technology. The processing services market consists of vendors who use their own computer systems--often utilizing proprietary software--to process customers' transactions and data. Companies that offer processing services collect, organize, and store a customer's transactions and other data for record-keeping purposes.

The service lines for which price indexes are available include:

* Transaction processing services

* Timesharing data processing services

* Data entry services

Price movements for the SIC 7374 index are based on changes in the revenue received by companies that provide data processing services. Each month, companies provide net transaction prices for a specified service. The transaction is an actual contract selected by probability, where the price-determining characteristics are held constant while the service is repriced. The prices used in index calculation are the actual prices billed for the selected service contract.

For further information on SIC 7374, contact Stephanie Shipley at (202) 691-7693. Ms. Shipley also can be reached by e-mail at shipley_s@bls.gov.