President Joe Biden rightfully focused the economic portion of his State of the Union address on jobs, inflation, and the need to boost investment at home. He rightfully claimed credit for more than 6 million jobs generated on his watch, and the steps his Administration is taking to cut costs for Americans.
But inexplicably, Biden did not cite some real economic success stories. On the job front, the most consistent job creator since the pandemic started has been the digital sector, with employment in the tech, broadband and ecommerce industries up by 1 million jobs since January 2020.
And even as prices for traditional goods like energy and autos have skyrocketed, digital economy inflation has remained almost non-existent. Two examples: the price of internet access services fell 1.3% in the year ending January 2022, according to the latest producer price report from the Bureau of Labor Statistics, released February 15. And the price of data processing fell by 0.3% over the same stretch.
Meanwhile the overall consumer price index rose by 7.5% over the same stretch. The producer price index for final demand rose by 9.7%.
This lack of inflation in the tech, broadband and ecommerce worlds is a stunning phenomenon that deserves a lot more attention from the White House, which is debating internally whether to blame rising prices on corporate greed. Why are these digital companies holding the line on inflation — at least so far — when old-line industries are bingeing on double-digit price increases? After all, consumers can spend their dollars on digital goods and services just as easily as traditional goods, especially during the era of Covid-19.
