By Nathalie Voit
According to the latest Adobe digital data, online inflation in November rose a record 3.5% year-over-year (YoY). Month-to-month (MoM), prices did dip 2% due to holiday discounts. Nonetheless, the discounts were insufficient to offset the severe surge in online consumer prices.
Thursday’s figure marks the highest annual pricing growth increase since Adobe began tracking online sales in 2014. The company said that November also represents the 18th consecutive month of online inflation.
The apparel category saw the most significant jump in prices, with inflation up 17.3% from the same time last year. Prices barely budged from October, dropping just 0.4% after seasonal discounts kicked in. Apparel prices are now in their eighth consecutive month of inflation, growing over 9% YoY every month.
The Flower & Related Gifts category came in a close second, climbing 15.48% yearly and dropping 0.19% MoM.
Grocery prices, another staple category, posted a 3.9% YoY increase. Appliance prices also shot up 4% from the previous year.
Overall, prices for 11 out of the 18 product categories tracked by the Adobe Digital Price Index swelled in November. The only notable merchandise categories that reported price decreases in November were electronics and toys, which fell by 0.4% and 2.9% YoY, respectively.
“Ongoing supply chain constraints and durable consumer demand have underpinned the record-high inflation in e-commerce, with apparel seeing high volumes of out-of-stock messages online compared to other categories,” said Patrick Brown, Adobe vice president of growth marketing and insights. “With offline prices surging in the Consumer Price Index, however, it is still cheaper to shop online for categories such as toys, computers and sporting goods.”
According to Adobe, one dollar out of every four U.S. dollars is spent online as part of an e-commerce transaction. The company cites Census Bureau data revealing that the e-commerce share of “non-fuel retail spending” has tripled over the past decade as everyday purchases like groceries and home improvement goods increasingly shift online from traditional brick and mortar locations.
Despite a flourishing digital economy, no relief appears in sight for U.S. consumers. High inflation is expected to climb even further to 6.8% when CPI data for November is released on Dec. 10. A 6.8% inflation rate would constitute the highest spike in inflation in over 40 years when Ronald Reagan was president.
“This 6% inflation is devastating,” said Gilbert Garcia, a managing partner at Garcia Hamilton & Associates in Houston. “We’ve got to get that inflation back to a more normal, containable level.”
The bond expert added that it was time for the Fed to raise interest rates, noting that the “artificially low” levels set by the central bank kept ordinary Americans at risk.
“Everyday Americans are having a very difficult time with food inflation, which is running very close to 30% and 40%,” he said.
