22nd Annual PNC Christmas Price Index Up 3 Percent; Dancers, Drummers and Pipers Earn More in Tight Labor Market
- Cost of '12 Days of Christmas' Reflect Consumer Pricing Trends -
Nov 27, 2006
PITTSBURGH, Nov. 27 /PRNewswire-FirstCall/ -- Historically low unemployment is making it more expensive to give the gift of live entertainment this year, according to the PNC Christmas Price Index. The tongue-in-cheek economic analysis by PNC Wealth Management is based on the cost of gifts in the holiday classic, "The Twelve Days of Christmas."
According to the 22nd annual survey, the cost of "The Twelve Days of Christmas" is $18,920 in 2006, a 3.1 percent increase over last year. Gift prices mirrored the U.S. government's Consumer Price Index -- a widely used measure of inflation calculated by the Bureau of Labor Statistics.
"The Christmas Price Index reflects trends in the broader economy," said Jeff Kleintop, chief investment strategist for PNC Wealth Management. "After years of stagnation, wages for skilled workers, including the song's dancers and musicians, have increased as the labor market has tightened. Also, a decline in the housing market has dampened demand for luxury goods, such as gold rings."
Drumming Up Raises or Milking the Minimum Wage?
The largest dollar increase this year resulted from rising labor costs -- exceeding the rate of inflation for the first time in years. According to Philadanco, the Philadelphia Dance Company, nine Ladies Dancing earned $4,759, 4 percent more than in 2006, compared to a raise of 3 percent for Lords-a- Leaping. The musicians, Drummers Drumming and Pipers Piping, earned 3.4 percent more compared with 2005.
Maids-a-Milking, who are paid the minimum wage, were the only service providers not to see an increase this year. The federal minimum wage has been set at $5.15 per hour since 1997. Inflation since 1996 has steadily eroded the purchasing power of the hourly minimum, which would be worth $4.04 in 1996 dollars.
Pear Tree Prices Skyrocket; Bird Prices Fly Lower
The Partridge's home saw the greatest increase of all the items in the index, as Pear Tree prices increased 44 percent from last year.
"Robust commercial construction is sparking landscapers' demand for ornamental trees, such as the species of pear used in the survey," said Kleintop.
True Loves will find no increase in the cost of Partridges and most other birds this year as the cost of fuel to ship them leveled off, according to The Cincinnati Zoo and Botanical Gardens. The exceptions were birds purchased at retail stores. Calling Birds, which are purchased at a national pet store chain, increased 20 percent.
Like many of the birds, the price for Gold Rings was flat compared to last year, even though the price of the raw material-gold-rose significantly.
"A slowing residential real estate market is making people feel less wealthy this year and is dulling demand for luxury items, like Gold Rings," said Kleintop. "Investors have been buying gold as an inflation hedge and prices per ounce remain much higher than last year. This may put pressure on profit margins at retail jewelers, who have not been able to pass along the increased cost to consumers."
Christmas More Expensive than Ever
For Internet-savvy True Loves, PNC Wealth Management calculates the cost of The Twelve Days gifts purchased on the Web. This year, the trends identified in the traditional index are repeated in the Internet version, with overall growth of 3.4 percent, compared to 3.1 in the traditional index. Wages are up, with the Drummers earning almost 100 percent more when purchased on the Internet in 2006 compared with an Internet purchase in 2005. And, as with the traditional Christmas Price Index, bird prices are even or, in some cases, down a bit from 2005 levels. In general, Internet prices are higher than their non-Internet counterparts because of shipping costs.
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. This holiday season, very generous True Loves will pay more than ever before -- $75,122 -- for all 364 items, up from $72,608 in 2005. This 3.5 percent increase is substantially less than last year's 9.5 percent increase. Kleintop observed that Christmas Price Index inflation may reflect trends that led the Federal Reserve to pause interest rate hikes this year.
Special Present: Updated Web Site
Since 1984, PNC has been calculating the cost of Christmas. Each year, the PNC Christmas Price Index provides an interesting perspective on the events and news that helped shape the economy during the year. For a historical look at PNC's Index, please visit our updated Web site at http://www.pncchristmaspriceindex.com/. Each year, educators across the country use the Christmas Price Index to teach economic trends to students of all ages. With that in mind, this year's site has been updated to include more interactive activities, annual results and trends, a Flash presentation, MP3 download, and much more. Educators who visit the site will also find sample lesson plans on related topics from The Stock Market GameTM (SMG) program, America's premier educational stock-market simulation. Available in all 50 states for grades 4-12, the SMG program teaches children core academic and investment skills. Individually, or in teams, students invest a hypothetical $100,000 portfolio, choosing equities and mutual funds over a 10-15 week period.
For free video content about the PNC Christmas Price Index, please log on to http://www.thenewsmarket.com/pnc to preview and request video. You can receive broadcast-standard video digitally or by tape from this site. Registration and video is free to the media.
The PNC Financial Services Group, Inc. (http://www.pnc.com/) is one of the nation's largest diversified financial services organizations providing retail and business banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management; asset management and global fund services.
A table with amounts for each item in the song follows. PNC Christmas Price Index - 2006 TRADITIONAL INTERNET % change % change 2005 2006 2006/05 2005 2006 2006/05 One Partridge in a Pear Tree $104.99 $144.99 38.1% $176.66 $211.66 19.8% Partridge $15.00 $15.00 0.0% $76.67 $76.67 0.0% Pear Tree $89.99 $129.99 44.4% $99.99 $134.99 35.0% Two Turtle Doves $40.00 $40.00 0.0% $130.00 $130.00 0.0% Three French Hens $45.00 $45.00 0.0% $210.00 $195.00 -7.1% Four Calling Birds $399.96 $479.96 20.0% $440.00 $432.00 -1.8% Five Gold Rings $325.00 $325.00 0.0% $265.00 $274.75 3.7% Six Geese-a-Laying $300.00 $300.00 0.0% $660.00 $660.00 0.0% Seven Swans- a-Swimming $4,200.00 $4,200.00 0.0% $7,035.00 $7,035.00 0.0% Eight Maids- a-Milking $41.20 $41.20 0.0% $296.64 $310.08 4.5% Nine Ladies Dancing $4,576.14 $4,759.19 4.0% $6,700.00 $6,885.00 2.8% 10 Lords- a-Leaping $4,039.08 $4,160.25 3.0% $10,947.00 $10,947.00 0.0% 11 Pipers Piping $2,053.20 $2,124.00 3.4% $1,700.00 $1,750.00 2.9% 12 Drummers Drumming $2,224.30 $2,301.00 3.4% $762.50 $1,500.00 96.7% Total Christmas Price Index $18,348.87 $18,920.59 3.1% $29,322.80 $30,330.49 3.4% True Cost of Christmas in song $72,608.02 $75,122.03 3.5% $123,846.62 $125,767.32 1.6% "Core" index, excluding swans $14,148.87 $14,720.59 4.0% $22,287.80 $23,295.49 4.5%
SOURCE: PNC Financial Services Group, Inc.
CONTACT: Fred Solomon, +1-412-762-7544, firstname.lastname@example.org, or
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