PITTSBURGH - The PNC Financial Services Group (NYSE:PNC) reported today that its whimsical Christmas Price Index (CPI) has risen by 2.7% this year, reaching $46,729.86. This marks the 40th year of the index, which playfully mirrors the U.S. economy's inflation trends by tracking the cost of gifts listed in the "Twelve Days of Christmas" carol.
Amanda Agati, chief investment officer for PNC's Asset Management Group, attributed the modest increase primarily to aggressive interest rate hikes by the Federal Reserve and a slowdown in major global economies. Despite these pressures, wage growth has now outpaced the PNC CPI, offering a glimmer of relief for consumers grappling with high inflation.
The CPI's increase is reflected in varying degrees across the traditional holiday gifts. Notably:
- The Pear Tree saw a significant price jump of 15%, in line with rising housing costs.
- Performers' wages—encompassing Ten Lords-a-Leaping, Eleven Pipers Piping, and Twelve Drummers Drumming—rose by 3.3%, which is a more moderate climb compared to last year's surge.
- Online shoppers would face a 4.8% increase in costs due to higher shipping and packaging fees.
Remarkably, the "True Cost of Christmas," which calculates the total price of each gift as repeated in the song's verses, surpassed $200,000 for the first time, landing at $201,972.66—a 2.5% uptick from the previous year.
The index also highlights a long-term shift in the U.S. economy from goods to services: in 1984, goods made up 70% of the index, whereas services now represent 63%. Excluding swans—known for their price volatility—the Core Index rose by 3.7%. Among all gifts, Turtle Doves recorded the highest percentage increase at 25%.
Since its inception in 1984, the PNC CPI has mirrored broad U.S economic trends with a cumulative rise of 133%, compared to a 191% increase in the Bureau of Labor Statistics' CPI over the same period. This year's report underscores that despite ongoing economic challenges such as high mortgage rates and inflationary pressures, there are areas where consumer costs have remained stable; no price increases were seen for Five Gold Rings or Nine Ladies Dancing among other items.
The PNC CPI continues to offer a unique lens through which to view economic conditions during the holiday season, blending tradition with economic analysis.
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