Inflation has ruined everything from going out to buying holiday presents for the family, but, as recent signs show, it may finally be starting to cool in at least some segments of the economy.
Gas prices in particular are dropping very quickly while the cost of cross-ocean shipping is also seeing significant improvement after the pandemic and supply chain disruptions sent those numbers skyrocketing in 2021. (Even if it doesn't always feel that way when you're sending your holiday packages this year.)
In November, prices for the goods we buy online fell by 1.9% year-over-year and 3.2% from October in the U.S.. That data comes from the Adobe (ADBE) Digital Price Index and is the largest drop seen in 31 months.
Cyber Monday Discounts Drove Overall Numbers
According to Adobe, such a steep drop has been significantly impacted by the discounts of Black Friday and Cyber Monday.
Many retailers overcorrected for last year's inventory shortages with an oversupply and, as the year wound to an end, started quickly dropping prices. The total of online purchases brought in $116.5 billion in November, up 1.7% from 2021 and 62.5% from the months before.
"While the November drop in online prices was driven by major discounting on days including Cyber Monday and Black Friday, we also see signs of overall e-commerce inflation cooling," Patrick Brown, vice president of growth marketing and insights at Adobe, said in a statement.
Computers purchased online, in particular, saw a steep drop by 18% from 2021. Electronics in general saw discounts of 13.4% year-over-year and 4.5% in October -- the biggest price fall since Adobe first started tracking online prices in 2014.
Electronics consistently make up the largest category of goods people buy online -- in 2021, electronics made up 18.6% share of all goods purchased online.
Toys, meanwhile, saw price drops of 7.7% year-over-year while prices on sporting goods dropped by 5.7% from 2021.
Online Groceries Are Still Feeling The Effects Of Inflation
"Falling prices in categories such as toys and electronics accelerated demand in November," Adobe analysts write. "[...] Adobe's figures are not adjusted for inflation, but with the November DPI down 1.9%, it is clear that strong consumer spending has been driven by net-new demand—and not simply higher prices.:
Both online and off, food is one category that is still seeing high prices. Online grocery prices were up 13.7% year-over-year in November -- just the slightest dip from the record of 14% growth in October.
Similarly to food, pet food and products are not usually discounted on days like Black Friday and therefore were not part of the steeply dropping numbers seen in categories like electronics and apparel. Prices for pet products rose by 11% from 2021 and fell just 0.2% from the previous month.
But overall, 15 of the 18 categories analyzed by Adobe saw a decrease in online prices while even the ones that didn't still saw signs that inflation may finally be reaching a tipping point. Categories like jewelry, personal care products and flower gifts see different levels of discounts (some are not part of Black Friday promotions at all) but all also saw drops in online prices.
"In categories such as groceries and personal care, which are not promotional in nature, we are seeing price increases come down from their heights in late summer and early fall," Brown said.
