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Adobe
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FOR IMMEDIATE RELEASE
Adobe Digital Price Index Shows Continued Deflation in the
U.S. Economy
Consumer Goods See Price Deflation; Job Searches Up But Housing Searches Down
SAN JOSE, Calif. — June 15, 2016 — The power of data rests in the ability to uncover previously unknown insights. By leveraging
vast amounts of digital data, Adobe (Nasdaq:ADBE) offers more accuracy and granularity of U.S. inflation measurement than
previously possible. Adobe’s data leverages online purchasing patterns including price and quantity information in real-time,
which fills a void that traditional economic reporting fails to measure. Adobe today is releasing its fourth monthly Digital Price
Index (DPI) for May, which incorporates which price points within product categories are driving changes in prices.
Adobe’s May DPI unveiled deflation in the majority of the consumer goods it tracks and low-cost items saw the greatest price
drops year-over-year (YoY) with the exception of TVs. Between April 2015 and April 2016, prices of the most expensive TVs
dropped much faster than the cheapest TVs (26.0 percent versus 15.0 percent). In contrast, low-cost computers saw faster
deflation than high-end computers (15.0 percent versus 4.0 percent). Appliances, computers, furniture, groceries, sporting goods
and TVs saw month-over-month (MoM) deflation between 0.2 and 3.7 percent. Between April 2015 and April 2016, the DPI found
that prices for appliances, computers, flights, furniture, sporting goods, TVs and toys dropped between 2.8 and 19.7 percent. In
comparison, the U.S. Bureau of Labor Statistics’ (BLS) Consumer Price Index (CPI) reported YoY deflation between 0.3 and 16.1
percent for these categories, and slight inflation (0.4 percent) for airfares. In May, the Digital Economy Project saw an increase in
job seeking and decrease in housing searches relative to recent months.
The DPI analyzes billions of digital transactions involving 15 billion website visits and 2.2 million products sold online, tracking
digital transactions more accurately than any other current source. In contrast, the CPI relies on consumer surveys to approximate
the actual sales in each product category, and tracks only 87,000 products. The DPI uses transactional data on the actual quantities
purchased and captures the data in real-time. Seven dollars and fifty cents out of every ten dollars spent online with the top 500
U.S. retailers go through Adobe Marketing Cloud.* Two economists – Austan Goolsbee, professor of economics at The University
of Chicago's Booth School of Business and former chairman of the Council of Economic Advisers for President Obama, and Pete
Klenow, professor, department of economics at Stanford University – are collaborating with Adobe on the DPI.
“Only Adobe tracks nearly 30 times the number of consumer goods as the CPI, along with over one billion visits to job search
websites and over two billion visits to housing search websites,” said Mickey Mericle, vice president, Marketing and Customer
Insights at Adobe. “This tremendous amount of data reveals further deflation, higher unemployment and more weakness in the
housing market than current reports suggest.”
DPI Categories
Latest findings include:
•
Sporting Goods: In May, prices for sporting goods decreased by 0.4 percent MoM, with primary deflation in high-end
sporting goods (over $350). In April 2016, the DPI saw 11 times more deflation YoY than the CPI, down 5.5 percent
versus 0.5 percent, respectively. DPI sporting goods data is based on approximately 300,000 products.
•
Electronics: Prices for electronics in May dropped 1.4 percent MoM, with the most deflation in cameras, smart watches,
TVs (2.0 percent) and tablets (3.7 percent). For TVs, high-end products (over $2,000) drove the most price decreases,
whereas low-end computers (under $700) saw the largest deflation. The CPI doesn’t break out electronics overall, but
reported that prices fell 16.1 percent for TVs and 7.7 percent for computers in April YoY. For the same period, the DPI
saw significantly more deflation, down 19.7 percent for TVs and 13.9 percent for computers. DPI data is based on online
transactions of one million electronics products.
Page 2 of 2
Adobe Digital Price Index Shows Continued Deflation in the U.S. Economy
•
Flights: For May, airfares rose 4.1 percent MoM. Washington, Georgia and Hawaii saw the largest decrease in airfares,
whereas Texas, California and Florida saw the most inflation. In April 2016, the DPI showed deflation of 4.6 percent for
flights YoY, whereas the CPI reported a vastly different 0.4 percent inflation. DPI data is based on approximately 370
flight routes between April 2015 and May 2016.
•
Hotels: Hotel prices in May increased 0.7 percent MoM. Florida, Arizona and Louisiana saw the most deflation in hotel
prices, and California, Illinois and Washington saw the most inflation. The DPI saw 2.8 percent inflation for hotels in April
2016 YoY, yet the CPI reported that the price of hotels remained stable. DPI hotel data is based on approximately
250,000 hotel properties and include associated fees.
•
Groceries: In May, prices for groceries decreased 0.2 percent MoM, with juices and non-alcoholic beverages seeing the
most deflation. In April, the DPI saw inflation of 0.5 percent YoY. For the same period, the CPI reported 0.3 percent
deflation. The DPI covers 30 to 40 percent of online grocery transactions for approximately 195,000 products, and is
heavily comprised of groceries purchased online and picked up in-store.
Job Seeking & Digital Housing Indices
The DPI is part of Adobe’s Digital Economy Project, which also encompasses the Digital Housing Index (DHI) and the Job Seeking
Index (JSI).
•
JSI: In May, online job seeking increased, a sign that more people are looking for jobs. Adobe’s data is based on analysis
of aggregated and anonymous data of one billion visits to U.S. job search websites and top U.S. employer career pages
from May 2015 through May 2016. Adobe measures searches of 20 of the top 30 U.S. employers.**
•
DHI: In May, online search for housing purchases and rentals slowed. Adobe’s data comes from the analysis of
aggregated and anonymous data from over two billion visits to U.S. housing search websites between May 2015 and
May 2016.
"The detailed data underlying the DPI allows Adobe to split out inflation rates by high-price versus low-price items within narrow
product categories. Such breakouts are simply not feasible with the smaller samples available in the CPI,” said Dr. Klenow.
Methodology
Adobe is the first company to conduct a digital-centric analysis based on real-time access to price-paid data and actual quantities
sold. Adobe Digital Index leverages the Fisher Ideal Price method, which uses actual quantities purchased to measure inflation and
is recognized by leading economists as the gold standard for the calculation of inflation. No other organization can use the Fisher
Ideal Price method today because the calculation requires knowing the quantity of each product purchased in each period. Before
Adobe, this has been impossible to measure at a sufficient scale.
The Adobe Digital Economy Project May report can be found here.
About Adobe
Adobe is changing the world through digital experiences. For more information, visit www.adobe.com.
*Source: Internet Retailer’s 2015 Top 500 eGuide
**Wikipedia
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