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Online Shoppers Catch a Break From Inflation

Overall inflation up 8.3 percent but online inflation up just 0.4 percent

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Inflation is still soaring, but prices for many items are rising much more slowly, according to data from software giant Adobe.​​

The U.S. Bureau of Labor Statistics (BLS) reported on Sept 13. that the consumer price index (CPI), which measures price changes in a broad basket of consumer goods, rose 8.3 percent over the 12 months that ended in August. 

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​The news was far more muted on the online front: Online shoppers saw a 0.4 percent rise in prices over the past 12 months, according to Adobe, and a 2.1 percent increase in August, compared with July. 

​​“The modest uptick we see in online prices for August was driven in large part by rising food costs that show no signs of abating, just as seasonal discounts in a category like apparel phased out through the end of summer,” said Patrick Brown, vice president of growth marketing and insights at Adobe, in a statement. “Consumer demand for e-commerce also remains steady and will keep prices elevated, especially for growing categories such as groceries, pet products and other consumer staples."

​​What fell and what didn’t online​​

Consumer electronics dropped an average of 10 percent over the past 12 months, Adobe says. Deflation, not inflation, has been a hallmark of the electronics industry: Prices have fallen consistently since December 2021 and accelerated in recent months. Computer prices were down 12.63% the past 12 months, the biggest drop since the beginning of the COVID-19 pandemic in March 2020.​

Toys sold online were down 4.49 percent year over year; that’s about average by pre-pandemic standards. Toy prices fell an average 5.54 percent from 2015 through 2019. But toy prices rose 3.08 percent in August as dealers started to gear up for the holiday season.

​​Apparel prices rose 4.93 percent the past 12 months and 8.72 percent in August, compared with July. Adobe says that July’s dip was largely due to high inventories and back-to-school sales. 

​​Grocery prices online, like grocery prices at the supermarket, soared in August, Adobe says. Food prices jumped 14.14 percent over the past 12 months, a record for the category. Online grocery prices have risen the past 31 months, Adobe says.​​

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Pet products rose 12.7 percent, also a record for the category. Many people adopted pets during the pandemic, and demand for all things pets has remained high. ​

Behind the numbers​

Adobe’s Digital Price Index (DPI) and the BLS’s CPI have considerable differences. The DPI looks at data from a trillion visits to retail sites and measures 18 product categories. The CPI uses surveys and personal visits to stores by data collectors. The CPI collects about 94,000 prices per month by its commodities and services survey alone, and measures eight major categories.​​

Notably absent from the DPI are gas and other energy products, which account for 8.8 percent of the CPI, as well as shelter, which is 32.2 percent of the CPI. Energy prices were 23.8 percent higher in August 2022 than they were in August 2021, according to the BLS, even though the price of gas fell 10.6 percent in August, compared with July. Shelter costs rose 6.2 percent the past 12 months, the BLS says.​​

Consumers have spent $64.6 billion online in August, up 6.5 percent from the previous year but down from the $73.7 billion spent in July, when numbers were boosted in part to record sales for Amazon’s Prime Day. So far this year, consumers have spent $590 billion online, Adobe says. ​

Note: This story was edited on Sept. 13, 2022, to reflect recent changes in the Consumer Price Index. 

John Waggoner covers all things financial for AARP, from budgeting and taxes to retirement planning and Social Security. Previously he was a reporter for Kiplinger's Personal Finance and  USA Today. 

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