A steadily improving economy helped prompt a 7.7 percent
boost in the 2013 PNC Christmas Price Index(R) , the 30(th) annual
tongue-in-cheek economic analysis by PNC Wealth Management.
Based on the array of gifts in the holiday classic,
"The Twelve Days of Christmas," the price tag for the PNC CPI is
$27,393.17 in 2013, $1,192 more than last year and the largest increase since
2010 when the index jumped 9.2 percent.
Launched in 1984 by the chief economist at a PNC predecessor
bank in Philadelphia, the PNC CPI is 116 percent higher this year than when it
all began, while inflation is up 122 percent over the same period. But an even
more intriguing fact emerged, according to Jim Dunigan, managing executive,
Investments of PNC Wealth Management.
"While there are exceptions in given years, what's most
interesting about the index's history is that since the beginning,
year-over-year increases have averaged 2.9 percent, which is exactly the same
number as the U.S. inflation index," he said.
This year, the PNC CPI's increase outpaced the government's
Consumer Price Index, which stands at 1.0 percent for the past 12 months
through September. The core index, removing volatile food and energy prices, is
uncharacteristically higher at 1.7 percent.
"We were surprised to see such a large increase from a
year ago, given the overall benign inflation rate in the U.S., but the dancers
in the index took a huge leap this year to play catch up from paltry increases
the previous few years," Dunigan said.
Nine Ladies Dancing vaulted with a 20 percent this year,
while Lords-a-Leaping jumped 10 percent, combining for a $1,736 increase from
2012.
As part of its annual tradition, PNC Wealth Management also
tabulates the "True Cost of Christmas," which is the total cost of
items gifted by a True Love who repeats all of the song's verses. Very
thoughtful True Loves must fork over $114,651.18 for all 364 gifts, a slightly
more "reasonable" increase of 6.9 percent increase compared to last
year.
Much like the government's CPI, the PNC CPI also measures a
Core Index -- up an even more dramatic 10.6 percent this year - that excludes
the Swans, which tend to be the most volatile in the index. This year, however
the swans remained steady from 2012 at $7,000, which is also the same price
they cost in 1984, the first year of the index.
Other Key Components Include:
-- Seven items:
the Partridge, Two Turtle Doves, Three French Hens, Five
Gold Rings,
Six Geese-a-Laying, Seven Swans-a-Swimming and Eight
Maids-A-Milking, remained the same price as last year.
-- Muffled
Increase: The prices for 11 Pipers Piping ($2,635.20) and 12
Drummers
Drumming ($2,854.80) advanced minimally this year, both up just
2.9 percent.
-- Pear Tree:
While housing prices in the general economy have been on the
upswing, the
PNC CPI splintered that trend as the Pear Tree dropped in
price by 3.2
percent, down to $184.00. This is the only item in the index
to drop in
price this year.
--
Maids-a-Milking: As the only unskilled laborers in the PNC CPI, the price
for the eight
Maids-a-Milking is represented by the minimum wage. With
the Federal
minimum wage flat at $7.25 per hour, hiring the maids this
year will not
increase labor costs.
For those True Loves who prefer the convenience of shopping
online, PNC Wealth Management calculates the cost of "The Twelve Days of
Christmas" gifts purchased on the Internet.
This year, the trends identified in the traditional index
are not repeated in the Internet version. However, True Loves will pay a grand
total of $39,762.61 to buy the items online, a drop of 1.7 percent from last
year, yet still $12,300 more than buying in person.
"In general, Internet prices are higher than their
non-Internet counterparts because of premium shipping costs for birds and the
convenience factor of shopping online," Dunigan said.
As in years past, my paycheck sure didn't increase 6.9% this year.
