Economic News Summary and the Christmas Price Index

The Christmas Price Index Might Be As Good As the CPI

by Elaine Schwartz    •    Dec 22, 2013    •    759 Views

This year, the increase in the PNC Christmas Price Index far exceeded the CPI. I do wonder, though, whether the CPI is really more accurate.

Whereas the BLS (Bureau of Labor Statistics) Consumer Price Index includes food, medical care and cars, PNC Wealth Management’s CPI, its Christmas Price Index, has swans, hens and dancing maids. This year, the PNC market basket, filled with the 364 gifts in  “The 12 Days of Christmas,” would cost you $114,651.18 while last year’s total was $107,300.24. Its 6.9% increase far exceeds the 1.2% CPI change from November 2012 to November 2013.

Prices that remained the same:

  • turtle doves
  • French hens
  • golden rings
  • geese-a-laying
  • milking maids
  • swans-a-swimming

Prices that decreased:

  • partridge in a pear tree

Prices that increased:

  • calling birds
  • dancing ladies
  • leaping lords
  • piping pipers
  • drummers

Wondering why the prices of the dancing ladies (+20%) and leaping lords (+10%) had spiked, I finally found an answer in Forbes. They confirmed the increases with a modern dance group in Philadelphia and the Pennsylvania Ballet. Meanwhile, because the Maids-a-Milking were unskilled labor, their wage remained at the federal minimum of $7.25 an hour.

PNC also calculated what an online shopper would pay and came up with a higher total. Surprised, I learned that it can be very pricey when you have to ship all of those birds.

Our bottom line: Including skilled and unskilled labor, goods and services, the Christmas CPI might be a valid yardstick. Although annual increases differed from the Consumer Price Index, the average increase of 2.9% since 1984 was approximately the same for both.

Most crucially though, the inflation rate depends on what you place in your market basket.

Sources and Resources: At the PNC Christmas Price Index site, you can participate in an interactive animation of the index and check out how it has fluctuated since 1984. For a good summary of this year’s data, I suggest Forbes and Businessinsider while to see the US CPI, you can go to BLS data, here. Also, econlife has looked at past PNC indices herehere and here.

The title of this entry was slightly edited after it appeared.

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