Adobe released its latest online inflation data from the Adobe Digital Price Index (DPI) for December 2022, showing that online prices fell 1.6% year-over-year (YoY).
While this is the fourth consecutive month of online price decreases on a YoY basis, November 2022 saw record discounts around Cyber Week, and online prices rose 1.1% on a month-over-month (MoM) basis.
What you need to know: The YoY December online price decline was driven by holiday discounting, including strong deals that lingered past Cyber Week.
Online prices fell substantially for computers, with prices dropping 16.2% YoY (up 2% MoM), and electronics, which fell 12% YoY (up 1.9% MoM).
Holiday deals also drove down prices for appliances (down 2.1% YoY and up 3.8% MoM), toys (down 7.1% YoY and flat MoM) and sporting goods (down 5.9% YoY and up 1% MoM).
Falling prices accelerated consumer demand in December, generating $95.1 billion for ecommerce (up 5.8% YoY).
Some non-promotional categories – products that lack heavy discounting – saw continued slowing of price increases in December.
Grocery prices were up 13.5% YoY, while modestly increasing by 0.5% MoM. This is the third consecutive month when YoY price increases have decelerated from September’s record high, when prices rose 14.3% YoY; October prices were up 14% YoY; and November prices rose 13.7% YoY.
In personal care, another “non-promotional category,” prices rose 1.6% YoY in December (up 2% MoM), a smaller increase than in November and October, when prices rose 1.8% YoY and 3% YoY, respectively.
Medical equipment and supplies similarly saw prices rise 4.1% YoY in December, a smaller increase than in November (5.3% YoY) or October (6.6% YoY).
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.
Adobe DPI Category Highlights for December
Appliances: Prices were down 2.1% YoY (up 3.8% MoM), marking the second consecutive month where YoY prices fell on an annual basis (down 2.9% YoY in November). This comes after prices for the category increased for 30 consecutive months, peaking at 7.1% YoY in December 2020.
Electronics: Prices were down 12% YoY (up 1.9% MoM), after dropping a record 13.4% YoY in the month prior. As the top ecommerce category by share of spending (18.6% share in 2021), electronics price movements have a significant impact on overall inflation online.
Groceries: Prices rose 13.5% YoY (up 0.5% MoM) but have slowed in the past three months. From January (prices up 5.8% YoY) through September (prices up 14.3% YoY), every month in 2022 had marked a record YoY high for grocery prices. In October, however, prices rose 14% YoY, less than the month prior. And in November, price increases continued to slow, rising 13.7% YoY.
Personal Care: Prices rose 1.6% YoY (up 2% MoM), after hitting a record high this year in October 2022, when prices increased 3% YoY. This is the second consecutive month where price increases for the category have slowed, following November’s 1.8% YoY increase.
Of note: Adobe’s figures are not adjusted for inflation, but as December’s DPI was down 1.6%, stronger consumer spending was clearly driven by net-new demand, not simply higher prices.
Where can I get more information? To stay on top of the latest online inflation data, follow the Adobe Digital Price Index here.
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