(Bloomberg) — Price growth of goods online in the US decelerated in May for a second month but grocery prices surged, the first time in which they’ve risen the most of any category tracked by Adobe Inc.
Online inflation rose 2% in May from a year ago, down from 2.9% in April and the record 3.6% in March, Adobe said in a release Thursday. Ten of the 18 components tracked, including electronics and toys, saw prices fall in the month, indicating consumers may be pulling back on discretionary spending.
Grocery prices jumped 11.7% in May from a year earlier, the most on record, and 1.3% from April, Adobe said. This was the first month that the category overtook apparel, which was in the top spot for price growth for over a year.
“Despite the modest increase in consumer spending online, an uncertain economic climate and rising costs in core areas like groceries are putting a hamper on overall demand,” said Patrick Brown, vice president of growth marketing and insights at Adobe.
Online prices have been rising for 24 months, but there are signs they may be peaking. On a monthly basis, prices dropped 0.7% in May, dragged down by other goods such as personal care products, jewelry and books.
Consumers are facing some of the highest inflation in 40 years — especially for essentials like food and gas — which is leaving little leftover for other purchases. However, spending has held firm as Americans dip into savings and load up on credit cards.
The data comes a day before the release of the May consumer price index, which is forecast to show prices rose 0.7% from April and 8.2% from a year ago, which would be the second straight deceleration on an annual basis.
The Adobe index analyzes 1 trillion visits to retail sites and over 100 million stock keeping units across 18 product categories.
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