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U.S. consumers can get a glimpse of what to expect in price changes this holiday shopping season – especially if you get your gift ideas from an old song.
The PNC Christmas Price Index, released by PNC Wealth Management (NYSE: PNC) measures the total cost of presents listed in the classic tune, "The Twelve Days of Christmas." This year, the price tag for an ambitious gift-giver buying all 364 presents hit $101,119.84, a 4.4% gain over last year's index.
This is the first time ever the total cost – which PNC calls the "True Cost of Christmas" -has risen to six digits.
Just supplying the 12th day alone, with one round of all 12 presents, would cost $24,263.18, a 3.5% increase from last year. That's almost twice as much as the 1.8% gain from 2008 to 2009, when the country was nearing the end of the recession, but not as drastic as last year's 9.2% leap.
The index is a light-hearted way to examine pricing trends; it's doubtful many shoppers are overly concerned with the price of birds and hired performers. The gifts might not be on most shoppers' lists, but what the index does represent is the various price fluctuations in our economy.
"Typically we see parallels between our index and the Federal government's," James Dunigan, managing executive of investments for PNC Wealth Management, wrote in the Index release.
The U.S. government's consumer price index in October was up 3.5% from last year, the same increase the Christmas song's shopper would see for one day's worth of presents. PNC also calculates a "core" index like the Federal government does. While the official core CPI is 2.0%, PNC's Christmas core, which excludes the volatile price of swans, is only up 0.7%.
The bird-heavy gift list in the song made for some double-digit price increases due to this year's rising feed costs. The biggest gainers: A 25% jump in the cost of two turtledoves, and a 14.2% increase to buy a partridge in a pear tree.
Higher commodity prices have led to higher food costs for U.S. consumers – not just bird shoppers – and along with energy have been the main cause of overall inflation this year. Food inflation will continue next year, with global food prices expected to increase 4%.