Overall Index Movement:

The OpenBrand CPI of Durable and Personal Goods recorded a 0.1% monthly change in February, notching the third consecutive month-over-month increase in prices and the fourth of the last five as retailers grapple with newly imposed tariffs on China and possible tariffs on Canada and Mexico. The magnitude of price change, however, was much smaller than last month’s increase of 0.6%, and follows a six-month deflationary trend in the second half of 2024.

Given the implementation of a 10% tariff on goods imported from China in February and an additional 10% on goods imported as of March 3rd, we anticipate both our monthly and annual CPI growth rates across all groups to reaccelerate in next month’s release and throughout the remainder of the first half of 2025, though the increase in the growth rate will likely be less than initially expected early last week as President Trump delayed yet again the implementation of 25% tariffs on most Canadian and Mexican imports.

Discount Trends: The falling trend in both the frequency and magnitude of reseller’s discounts have at least in part contributed to the recent three-month streak of positive price appreciation. This is likely due to the initial 10% tariff applied to China in February, and given the additional 10% applied on March 3rd, we should expect a decreasing trend in the frequency and magnitude of discounts in next month’s release. Between these two months, the share of products with discounts decreased by 130 basis points, from 22.6% of products in January to 21.3% in February. This is the third consecutive month of month-over-month decreases that began in November when 27.0% of product offerings came with a discount. Over the same period, the typical discount size has remained relatively stable at between 17.8% and 18.6%.

Annual Trends: Year-over-year, durable and personal goods prices were essentially flat, showing a small decrease of 0.1%. This is the tenth consecutive month of negative year-over-year price growth that reflects a lower rate environment compared to the same time last year. However, it is the smallest decline during this stretch, where annual declines of 0.7%to 0.9% have been the norm. This is down from a revised annual decline of 0.3% in January.

Product Group Trends: All five product groups — Appliances, Communication, Home Improvement, Personal Care, and Recreation — showed positive month-over-month price growth in February.

• Appliance Group (+0.0%)
• Communication Group (+0.0%)
• Home Improvement Group (+0.6%)
• Personal Care Group (+0.3%)
• Recreation Group (TVs, speakers, and headphones) (+0.2%)

See the full breakdown of product groupings. 

CPI: Appliances

Prices for appliances were on a month-over-month basis in February. This ends a two-consecutive month gain of nearly 1%. The discount frequency on appliances decreased slightly from 42.2% in January to 39.9% in February, but has been relatively stable at between 38% and 43% since May 2024. The magnitude of such discounts remained unchanged over the month at 16.2%, and has remained in the low-to-mid teens since the onset of the pandemic.

CPI: Communication

Prices of communication devices, including phones, tablets, computers, and printers, were also flat on a month-over-month basis. This is the ninth consecutive month where monthly price growth was either flat or positive. The frequency of discounts increased slightly over the month from 6.6% in January to 7.1% in February, but both months were down by about half since May 2024, when they ranged from about 12.0% to 14.5%. The magnitude of discounts ticked down just a hair, from 22.4% in January to 22.3% in February, though both months are discount highs not seen since April 2024.

CPI: Home Improvement

The index for home-related durable goods moved up 0.6% on a month-over-month basis, the 29th consecutive month-over-month increase and down just slightly from last month’s revised increase of 0.8%. The frequency of discounts was 8.2% of products in February, down from 11.0% in January. In addition to the drop in the share of products with a discount, the magnitude of discounts also declined month-over-month, falling from 18.4% in January to 17.1% in February.  

CPI: Personal Care

Prices of personal care products moved up by 0.3% on a monthly basis in February 2025, the third consecutive monthly increase and up from a revised 1.4% in January and 0.7% in December. Some of this increase may be due to a monthly decrease in the incidence and magnitude of price discounts, with the share of discounted personal care products falling from a revised 26.8% in December and 23.9% in January to 22.9% in February and the average discount magnitude falling from 23.1% to 20.6% over the same period.

CPI: Recreation

 Prices of recreational products, including TVs, headphones, and speaker systems, moved by 0.2% on a month-over-month basis, down from January’s revised and relatively large increase of 1.8%. This is the seventh increase over the past eight months. While the frequency of discounts increased to 17.9% in February from 16.7% in January, both of these months show the lowest rate of product discounts since just after the pandemic started in early 2020. The average magnitude of discounts also dropped to lowest level since 2020, falling from 24.4% in January to 23.3% in February. 

As of March 2025, the global economic landscape presents a complex interplay of legacy resilience and emerging challenges. In the United States, the economy has shown unexpected strength over the past several months, with robust consumer spending and a tight labor market helping contribute to growth. However, recent data indicating weaker-than-expected figures in consumption, a stagnant housing market, and an emerging trade war are raising concerns about potential risks to sustained economic expansion in the U.S. and abroad. 

Impact of Tariffs on CPI

Global trade dynamics are undergoing significant shifts, particularly with the implementation of new U.S. tariffs. Last, the United States has threatened to implement tariffs of 25% on goods from Canada and Mexico and implemented an additional 10% on imports from China on March 4. These measures are expected to put upward pressure on inflation and add layers of complexity to international economic relations and domestic consumer sentiment, with additional implications for expected economic growth throughout the rest of the year.

How will these tariffs affect prices of consumer durable and personal goods? The simple answer is that it depends. For products imported from these countries with small margins, the impact to pricing is likely to be close to the full value of the tariff as retailers have little room to absorb it into their already small margins. For products with large margins, retailers have the liberty to choose how much of the cost of the tariff should be passed on to consumers. If the expected tenure of the tariffs is short, sellers of such high margin products may choose to simply absorb the entire cost of the tariff and wait until the tariff passes. On the other hand, resellers with smaller margins won’t have this luxury and may be forced to raise prices soon. 

The Federal Reserve, acknowledging these mixed signals, maintains a “moderately restrictive” monetary policy stance, keeping the federal funds rate in the range of 4.25% to 4.50%. This approach aims to balance the need to support growth while ensuring inflation continues its downward trajectory toward the 2% inflation target. After the tariff announcements last week and equity market turmoil that ensued, markets are now pricing three 25 basis point rate cuts by the end of the year. 

In Europe, the economic outlook is more subdued. The European Central Bank (ECB) is anticipated to cut interest rates in its upcoming meeting. However, there are concerns that further easing could inadvertently lead to economic stimulus before inflation is fully controlled. This uncertainty is exacerbated by unpredictable geopolitical events, including potential U.S. tariffs and a complex and evolving situation in Ukraine. 

Financial markets reflect a cautious sentiment amid these developments. Investor anxiety is evident, with the Cboe’s Volatility Index (VIX) rising by nearly 33% from the middle to the end of February. As of this week, both the S&P 500 and the Nasdaq Composite indices are down year-to-date.

Overall, the global economy in March 2025 is navigating a path marked by resilience in certain sectors and regions, counterbalanced by emerging risks and uncertainties. Policymakers and investors alike are urged to remain vigilant, adapting strategies to the evolving economic landscape as legacy influences give way to more contemporary drivers.

Note: This summary is based on data available as of early March 2025 and may be subject to revisions in future releases.

The OpenBrand CPI of Durable and Personal Goods is constructed using a data-driven methodology that ensures accuracy, timeliness, and transparency in measuring price trends for both short and long-lasting consumer products. The methodology consists of the following key components:

1. Data Collection

• Real-Time Price Tracking: Prices are sourced daily from online marketplaces, retail websites, and brick-and-mortar store listings.
• Retailer & Manufacturer Data: Aggregates pricing information from major retailers, direct-to-consumer brands, and wholesale suppliers into broader consumer categories.
• Temporal Coverage: Captures price variations over time, including daily discounts and price promotions

2. Product Selection & Tracking

• Durable and Personal Goods Focus: The index includes products with an expected lifespan of three years or more, such as home appliances, consumer electronics, and tools, as well as personal care products with a shorter lifespan, such as hair and skin care products, vitamins, over-the-counter medications, and oral care products. 
• Brand & Model Tracking: Individual brands and models are monitored to reflect pricing shifts within competitive product segments, including both permanent changes in listing price as well as temporary promotional pricing.

3. Price Calculation, Adjustments, and Weighting

• Price Calculation: Tracks month-over-month and year-over-year price movements to measure price stability in the marketplace and take into account both longer-term changes in pricing (such as changes in manufacturer’s suggested retail price) as well as more short-term changes in pricing, such as promotional discounts and sales prices. 
• SKU-Removal Instead of Hedonic Adjustments: When a product (or SKU) becomes unavailable in the BLS goods basket, the BLS implements a SKU-replacement procedure whereby the next most similar product is used in its place, and a quality (hedonic) adjustment procedure is performed to get closer to an apples-to-apples price comparison. Since OpenBrand has data on nearly 100% of the SKUs pricing history in a given product category, we can simply remove that SKU from the basket and rely on price changes of the remaining SKUs in that basket. This eliminates the need for hedonic adjustment in the OpenBrand CPI basket.
• Weighting and Aggregation Method: A weighted geometric mean formula is used to minimize volatility and improve stability in price trend analysis at both the product grouping and category level. Instead of using sales-volume weights when aggregating the index, we take an alternative approach by using persistence-based weights for aggregation. Instead of more frequently purchased items getting more weight in the BLS’ CPI calculation, OpenBrand takes a more novel approach by weighting items with a more established price history in the market more heavily in our CPI calculation than items with a less established history.

4. Reporting & Updates

• High-Frequency Updates: Published freely on a monthly basis, with a subscription option for daily summaries across categories, sub-categories, and individual products.
• Comparative Benchmarks: We aggregate pricing as analogously as possible to traditional BLS CPI measures for benchmarking purposes.
• Transparency & Accessibility: Provides both open and paid data access for journalists, researchers, businesses, and policymakers.

By leveraging real-time data and advanced statistical techniques, the OpenBrand CPI offers an accurate and dynamic measure of pricing trends, helping businesses and consumers make informed decisions in an evolving economic landscape.