Online inflation continues to slow in May, Adobe says
E-commerce data has 'become an important input for measuring inflation'
Online price increases dropped slightly last month, according to a new report.
In May, prices increased 2% compared with the same time a year ago. However, that's down from April's price increase of 2.9% year over year and March's record price increase of 3.6% year over year, according to a new report by Adobe Analytics.
May marked the second month when online prices slowed and many of the product categories tracked by Adobe even saw price decreases, according to Adobe’s Digital Price Index.
RISING INTEREST RATES, INFLATION FORCE CONSUMERS TO PULL BACK IN ONLINE SHOPPING
For instance, online prices for electronics in May were down 1.4% from April. Likewise, May prices for apparel decreased 1.5% month over month, according to data tracked by Adobe. However, prices for essential items such as groceries rose 1.3% from April.
Consumer making an online purchase (iStock / iStock)
Adobe’s Digital Price Index, according to Marshall Reinsdorf, a former senior economist at International Monetary Fund, "is a timely indicator that often mirrors inflation movements happening offline while highlighting the tendency for inflation to be lower in the digital economy."
Overall, consumers collectively spent $78.8 billion online, which is up 7.1% from a year ago and over $1 billion more than what consumers spent in April.
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Although the data showed a "modest increase" in online spending, "an uncertain economic climate and rising costs in core areas like groceries are putting a hamper on overall demand," Patrick Brown, Adobe's vice president of growth marketing and insights, said in a statement.
"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," Brown said.