Adobe DPI: Online Inflation Continued to Slow in May 2022

Adobe announced the latest online inflation data from the Adobe Digital Price Index (DPI), powered by Adobe Analytics, covering the month of May 2022.

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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. Prices for electronics and apparel, major categories that made up 33% of eCommerce 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 follows a 10.3% YoY increase in April, a 9% YoY increase in March and a 7.6% YoY increase in February—all record highs.

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 a 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.”

Patrick Brown, vice president of growth marketing and insights, Adobe

“Slower consumer spending on discretionary items has driven slower, single-digit eCommerce growth since March, and this pullback mirrors the easing in online inflation,” added Brown

“eCommerce 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,” added Reinsdorf.

Adobe Digital Price Index (DPI) Methodology

The DPI is modeled after the Consumer Price Index (CPI), published by the US Bureau of Labor Statistics, and uses the Fisher Price Index to track online prices.

The Fisher Price Index uses quantities of matched products purchased in the current period (month) and a previous period (previous month) to calculate the price changes by category. Adobe’s analysis is weighted by the real quantities of the products purchased in the two adjacent months.

Powered by Adobe Analytics, Adobe uses a combination of Adobe Sensei, Adobe’s AI and machine learning framework, and manual effort to segment the products into the categories defined by the CPI manual. The methodology was first developed alongside renowned economists Austan Goolsbee and Pete Klenow.