Adobe Digital Price Index

Online Inflation Continues to Slow in May at 2.0%

Adobe (Nasdaq:ADBE) today announced the latest online inflation data from the Adobe Digital Price Index (DPI), powered by Adobe Analytics. In May 2022, online prices increased 2% year-over-year (YoY)—down from 2.9% YoY in April and the record 3.6% YoY increase in March—while decreasing 0.7% month-over-month (MoM). While this marks two full years of inflation online YoY, May is the second month where online price increases have slowed. The majority of categories tracked by the DPI (10 out of 18) saw MoM price decreases in May.

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(Graphic: Business Wire)

Prices for electronics and apparel, major categories that made up 33% of e-commerce spend in 2021, have continued to draw down. Electronics prices were down 6.5% YoY (down 1.4% MoM), a greater decrease than April (down 5.2% YoY), and a record YoY low for the category over the last 24 months. Prices for apparel increased 9% YoY (down 1.5% MoM), down from the 12.3% YoY increase in April. Toys are down 6.5% YoY (down 1.3% MoM), a record low for the category over the last 24 months. Prices have not eased for groceries, rising 11.7% YoY (up 1.3% MoM), a record YoY high for the category. This is the first month where prices for groceries have risen the most of any category, overtaking apparel.

In May, consumers spent $78.8 billion online, which represents 7.1% YoY growth. It is over $1 billion more than the month prior, when consumers spent $77.8 billion online (4.5% YoY growth), and below the $83.1 billion (7% YoY growth) that was spent in March. In 2022 so far, consumers have spent a total of $377.6 billion online, growing 8.9% YoY.

“Despite the modest increase in consumer spending online, an uncertain economic climate and rising costs in core areas like groceries are putting a hamper on overall demand,” said Patrick Brown, vice president of growth marketing and insights, Adobe. “Slower consumer spending on discretionary items has driven slower, single digit e-commerce growth since March, and this pullback mirrors the easing in online inflation.”

“E-commerce data has become an important input for measuring inflation as daily activities, including shopping, become more and more digital,” said economist Marshall Reinsdorf, former senior economist at International Monetary Fund. “In an uncertain economic environment, Adobe’s Digital Price Index is a timely indicator that often mirrors inflation movements happening offline while highlighting the tendency for inflation to be lower in the digital economy.”