Government data puts inflation at about 1 percent, and even that anemic number may overstate the true level of price growth.
Billions of online transactions are tracked on a daily basis by Adobe and show that deflation is rampant across several consumer categories. Prices are falling fast in the Adobe Digital Price Index, which measures 80 percent of all online transactions from the top 100 U.S. retailers.
The consumer price index is calculated on a monthly basis by surveying the costs of about 80,000 items, while the DPI tracks 2.2 million products every day. Online commerce makes up almost 8 percent of all retail sales, according to the Census Bureau.
Deflation in the DPI in June was stronger for discretionary spending categories like electronics and sporting goods than essentials like groceries and medical supplies, said Mickey Mericle, vice president of marketing and customer insights at Adobe. That could be a sign of reduced spending on nonessentials by cash-strapped Americans.
"When people are not seeing real wage-growth increase, what they're doing is maintaining spending on the essentials while cutting nonessentials," Mericle said. "This could be a demand issue where people are not spending enough on things like electronics, so vendors are pushing down prices."