Around this time of year, I like to cover PNC Bank’s tongue-in-cheek Christmas Price Index where they track prices of the basket of goods mentioned in the holiday classic, “The Twelve Days of Christmas,” the one that goes…”On the first day of Christmas, my true love sent to me a partridge in a pear tree”… and so on. And by the 12th day, the list includes twelve drummers drumming, eleven pipers piping, ten lords leaping and so on… remember?
PNC compiles prices of what these gifts cost true loves every year. In 2017, PNC Wealth Management found that the cost of all these gifts—what they call the Total Christmas Price Index—was $34,558.65, up 0.6% over last year. Not much of an increase, that’s for sure. However, looking back 5 years, this quirky basket of swans and leapin’ lords cost 15% more. Looking back 10 years, it cost 52% more!
Christmas Price Index Nicely Mirrors U.S. Inflation
How did this quirky index get started? Well, it was started by the chief economist at a PNC predecessor bank in Philadelphia in 1984. Since then the index has averaged an annual year-over-year increase of 1.9% which is less than the 2.67% from the Real Consumer Price index.
So, what drives the prices of these gifts? PNC’s Christmas index broadly mirrors economic conditions, which they’ve broken down into the 3 main drivers of change over these past 34 years. It should be no surprise that the biggest driver is the internet. With the internet ever more ubiquitous, it’s easier than ever to find these items online. However, these gifts tend to be more expensive due to the additional costs of shipping and handling.
Coming in second is the price of services increasing, though the price of goods themselves have slowed. And finally, the cost of fuel has been especially volatile over the past few years, having a big effect on the cost of shipping.
A lot of last year’s items stayed the same in price. The cost of French hens, calling birds, geese, swans, and the employed, like maids-a-milking and dancing ladies aren’t making any more money this year, due to the well-known fact that wages have been stagnating, but lords a leaping have been on a steady increase, this year up 2% for a total of $5,618.90.
There hasn’t been a lot of price jumps and no price drops. So what category has had the highest jump in price?
In 2016, turtle doves went up a whopping 29.3% in 2016, costing $375.00 a pair. Luckily things have leveled off and stayed at the same price this year.
2017 brings us gold as the winner, with five gold rings up 10% due to an increase in demand and popularity.
Partridges in a pear tree came in right behind with a 4.7% increase, but not due to the partridge. It’s the pear tree that has increased due to a rise in the cost of living for workers (not wages) and a limited supply of mature trees.
This is interesting because, in 2016, the biggest losers were both the partridge and pear tree, with partridges down by 20%, while pear trees cost the same, leading to a total 2.3% decline in price.
And drum roll please: The most expensive item on the list is still the seven swans-a-swimming—no increase or decrease in price, which is good because they’re still costing a whopping $13,125 to acquire for your true love.
The Christmas Index comes with its own website, https://www.pncchristmaspriceindex.com/ and has been developed as an interactive experience so educators can explain economic trends to middle and high school students. That’s pretty cool. And if you’re really curious about how the prices of maids-a-milking or lords-a-leaping have changed over the years, head over to the website for more details.
Five Golden Rules for Holiday Shopping
Always remember these five golden rules to keep a lid on the cost of your holiday shopping:
- Be choosy: Pare down your list to those you’re really close to and don’t get guilt-trapped into buying gifts for far-away relatives or long-forgotten friends that you’re not in touch with anymore. Instead, send them an e-card or a long email with photo attachments, updating them on what you’ve been up to and how your family has grown.
- Create a budget: Once you’ve narrowed down your list, decide how much you will spend per person. Keep it reasonable and stick to your budget.
- Find bargains: There are lots of smart deals online with coupons, free shipping, no-hassle returns, Black Friday, Cyber Monday etc. So take advantage of these promotions.
- Get crafty: You could also save a ton if you plan and make gifts ahead of time, such as knitted scarves, a batch of home-made Christmas cookies, or one of millions of gift ideas available over the internet. A personal touch is always warmly received provided you’ve put a little thought and effort into making the gift. You could also get creative and swap gifts for donations to the gift-receiver’s charity or schedule a date such as a show or a movie so you get family time with your loved ones. Donations also reinforce charitable giving with kids and give them a chance to appreciate the things they have in life.
- Pay smartly: This is a great time to cash-in your credit card rewards for gift cards or gifts. Consider using pre-paid cards so you can more easily stick to your budget. And if you use credit cards, make sure you have a plan to pay off your balance right away because the interest can quickly add up. And if you pay your balance every month, get the card that has the most generous points, miles, or cash-back features that fit your lifestyle. If you’re shopping online, make sure you’re shopping at secure websites where the payment page has a lock icon and a web address that starts with HTTPS, where the S stands for secure.
So have a wonderful time this season, have a terrific New Year and enjoy EVERY day of this most joyous holiday!
The 12 Days of Christmas
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