Consumer Price Index: Durable and Personal Goods | May 2025

Price growth for consumer durables and personal goods accelerated sharply on a monthly basis in May, with a month-over-month increase of 0.53% compared to a revised monthly 0.35% increase in April. Price growth was driven primarily by acceleration of appliances, home improvement, and personal care products. Across the largest moving categories, price growth acceleration was concentrated in acne care, dishwashers, hair styling products, countertop microwaves, outdoor cooking, shaving razors, sound bars, and TVs, with monthly increases of between +1.24% and 2.92%.

We attribute some of the recent acceleration in price growth to the continued and varied enforcement of U.S. tariffs on specific product types. The tariffs have targeted a wide range of goods imported from China and other major U.S. trading partners, and span a variety of goods covered in our CPI basket. What’s more, some products – particularly those imported from China that aren’t part of the April exclusion with a high turnover- are more susceptible to the impacts of tariffs than others, as importers and retailers of such goods face increasing pressure to pass costs onto consumers. For example, prices for items like acne care, dishwashers, hair styling products, countertop microwaves, outdoor cooking, shaving razors, sound bars, and TVs accelerated the most, with an acceleration of price growth across these categories from -2.93% to -0.45% in April to +1.24% to 2.92% in May. 

Overall OpenBrand Consumer Price Index Movement: The OpenBrand CPI of Durable and Personal Goods recorded a 0.53% monthly change in May, notching the sixth consecutive month-over-month increase as retailers begin passing along some of the costs of their import tariffs to consumers. The magnitude of price change accelerated again in May, with a considerable increase over last month’s increase of 0.35%.

Discount Trends: May again brought very slight changes to the frequency and magnitude of discounts to the durables and personal goods sector, with frequencies rising month-over-month to 21.2% of all durable and personal goods from 21.1% in the month prior, and the typical magnitude remaining unchanged at 19.5%. Given lingering uncertainty surrounding the current state of trade negotiations, we expect discounting activity to remain steady, or even decrease, over the coming months. 

Product Group Price Trends: Three product groups – Appliances, Home Improvement, and Personal Care – all experienced sharp increases in price growth from the prior month, while two groups –  Communication and Recreation – experienced positive but slowing rates of price growth.

• Appliance Group (+0.77%)
• Communication Group (+0.14%)
• Home Improvement Group (+0.81%)
• Personal Care Group (+5.6%)
• Recreation Group (+3.6%)

See the full breakdown of product groupings. 

CPI: Appliances

Prices for appliances increased sharply by +0.77% on a month-over-month basis in May, accelerating from a revised decrease of 0.09% in the month prior. The acceleration in price growth was at least partially driven by a small decrease in both the frequency (40.7% from 41.3% the month prior) and magnitude (16.8% from 16.6%) of discounts, but the trend has been relatively stable at between 38% and 43% for frequencies, and mid-teens for discounts, since May 2024.

CPI: Communication

Prices of communication devices, including phones, tablets, computers, and printers, rose on a month-over-month basis to 0.14%, down from a revised 0.97% the month prior. Some of the slowdown in price growth was likely due to an increase in both the frequency and magnitude of discounts. The frequency of discounts increased over the month from 5.5% in April to 7.9% in May, 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 decreased by just 30 basis points, from 18.7% in April to 19.0% in May.

CPI: Home Improvement

The index for home improvement goods increased sharply in May to +0.81% on a month-over-month basis, showing 26 consecutive month-over-month flat or monthly increases and up from +0.59% April. The increase in prices comes amidst relatively minor changes in both the frequency and magnitude of discounts, suggesting that such price changes are being driven by upward adjustments in shelf pricing. The frequency of discounts was 11.1% of products in May, down from 12.1% in April. In addition to the decrease in the share of products with a discount, the magnitude of discounts also decreased slightly month-over-month, falling from 17.4% in April to 16.9% in May. 

CPI: Personal Care

Prices of personal care products increased sharply on a monthly basis in May 2025 by 0.56%, a strong reversal of trends of -0.14% in March and -0.39% in April. This increase comes during changes in both the frequency and magnitude of discounts, with the frequency decreasing by 140 basis points from 24.0% in April to 22.6% in May. The typical discount magnitude increased very slightly, from 21.2% in April to 21.3% in May.

CPI: Recreation

Prices of recreational products, including TVs, headphones, and speaker systems, increased by 0.36% on a month-over-month basis in May, down from a revised 0.70% in April. This is the tenth increase over the past eleven months. Some of this slowdown in the pace of price growth is at least partially due to an increase in the frequency of discounts – to 23.8% in May from 22.8% in April – and a slight increase in the average magnitude of discounts – to 23.5% from 23.3% over the same time period.

The U.S. economy has entered a period of moderated growth, shaped heavily by trade policy developments and persistent inflationary pressures. Following a strong 2024, economic momentum softened in early 2025. The first quarter saw a -0.3% contraction in real GDP, primarily driven by a front-loaded surge in imports as businesses moved to circumvent new tariffs introduced under the Trump administration. Despite the contraction, domestic demand remains relatively healthy, with consumer spending and capital investment providing ongoing support. Our outlook still assumes the U.S. economy avoids a recession in 2025, with full-year GDP growth expected to land at 1.3%, increasing to 1.5% in 2026. Growth will remain below trend, however, and macroeconomic risks remain elevated.

The Federal Reserve has held its policy rate steady at 4.25%–4.5%, though we expect it to begin cutting rates in Q3 and assume this will be a response to a continued slowdown in economic activity. Markets now anticipate three 25-basis-point cuts in the second half of 2025, eventually bringing the federal funds rate closer to its estimated neutral level of 3% by 2026. Long-term yields are expected to stay near 4.2%, as elevated inflation and fiscal concerns limit downward pressure.

While headline BLS CPI and BEA PCE inflation has decelerated in recent months, as we show below this improvement may be temporary. New tariffs implemented in April are expected to reaccelerate inflation in the second half of the year. That said, our forecast is that the BLS CPI will peak near 2% on a year-over-year basis for consumer durables before returning to a deflationary trend that existed prior to the current tariff environment.

Labor market conditions remain solid but are softening. April saw a gain of 177,000 jobs, with unemployment holding at 4.2%. Job growth is expected to slow into 2026, with the unemployment rate projected to reach 4.9% by year-end 2026. The 2025 forecast includes approximately 900,000 new jobs, though the labor market is expected to flatline next year.

Tariffs remain the most influential policy lever impacting the near-term outlook. The effective tariff rate is projected to peak around 20% by mid-2025, gradually falling to 8% by the end of President Trump’s term. While some sectors experienced a short-term boost from inventory stockpiling, the broader economic impact is negative—particularly for import-reliant industries and capital-intensive sectors facing rising input costs.

The housing sector is under pressure from rising materials costs and a constrained labor supply due to immigration restrictions. While underlying demand remains intact, affordability challenges and elevated mortgage rates are limiting both new starts and existing home sales. National home prices are expected to post low single-digit growth. In commercial real estate, persistent vacancy rates and high borrowing costs are weighing on valuations, though “extend-and-pretend” lending strategies are preventing widespread distress.

Key Risks to Monitor, Summer 2025:

• Downside: Sustained or escalating tariffs, renewed inflation shocks, tighter financial conditions, or a deterioration in global growth.
• Upside: Faster easing of trade tensions, stronger-than-expected labor force growth, or a sustained rebound in productivity.

In summary, the June 2025 outlook reflects a U.S. economy in transition—moving from recovery to a slower, more fragile expansion. Monetary policy easing is likely, but contingent on inflation trends. Trade policy will remain a primary driver of macroeconomic volatility in the months ahead, and internal planning should reflect both the potential for policy normalization and elevated downside risk.

Note: This summary is based on data available as of early June 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.