Adobe reports digital deflation

adobeBeancounters working for Adobe have worked out that the digital economy is suffering a period of deflation across nearly every category it tracks.

Adobe’s Digital Price Index (DPI) looks at inflation rates across consumer goods categories that the the Bureau of Labour Statistics’ Consumer Price Index (CPI) measures.

However Adobe analyses actual transactions in real time and can account for changes in consumer behaviours, whereas the government relies on surveys to approximate sales of each product category.

Adobe spotted deflation across nearly all categories Adobe tracks including groceries, TVs, toys, electronics, furniture, appliances and flights.

In sporting goods, the DPI shows three times more deflation than the CPI for the last year. In computers, the DPI saw twice as much deflation year on year versus the CPI.  The DPI explains the decrease in demand and pricing for sporting goods and PCs that led to the recent bankruptcy announcements and Intel pulling out of the PC market.

Prices for TVs and Tablets dropped the most year on year. TV prices fell 19.7 per cent and tablets fell by 20.9 per cent.

The DPI analyses 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.

Economists, Austan Goolsbee, former chairman of the Council of Economic Advisers for President Obama, and Pete Klenow, professor, department of economics at Stanford University, are the brains behind the DPI.