There are two economic acronyms that should ring a bell even with those who aren’t experts: GDP and CPI. They’re two of the most important government statistics regarding the economy: The first, the gross domestic product, measures a country’s economic output, while the second, the consumer price index, records the rises and falls of the prices of everyday goods—which, when combined together, describe inflation. Accurate measurements of GDP and CPI are hugely important for central bankers, because they use those determine monetary policy.
In the last decade, though, the government has had a harder time measuring CPI. Their method is usually to go around from store to store, taking stock of prices around the country. But e-commerce now accounts for around 7 percent of U.S. GDP, which means online spending is an important component of the CPI. As more and more people are shopping online, calculating this index has gotten more difficult, because there haven’t been any great ways of recording prices from the sites disparate retailers.
Data shared by retailers and compiled by the technology firm Adobe might help close this gap. The company is perhaps known best for its visual software, including Photoshop, but the company has also become a provider of software and analytics for online retailers. Adobe is now aggregating the sales data that flows through their software for its Digital Price Index (DPI) project, an initiative that’s meant to answer some of the questions that have been dogging researchers now that e-commerce is such a big part of the economy.