True Loves Will Have to Dig Deeper This Year

Federal Reserve Chairman Ben Bernanke may not (yet) be worried about inflation, and Social Security may not see the need for a cost of living adjustment, but true loves are singing a different tune this holiday season.


Yes, Virginia, despite a sluggish economy and low inflation, the 2010 PNC Christmas Price Index surged 9.2%, according to the “whimsical economic analysis” by PNC Wealth Management based on the gifts in the holiday classic, “The Twelve Days of Christmas.” 

According to the 27th annual survey, the price tag for the PNC CPI is $23,439 in 2010, $1,974 more than last year. That’s the second highest jump ever and largest percentage increase since 2003 (when the index rose 16%).  The index rose just 1.8% a year ago (see Cost of True Love Rises—Slightly).   

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 True Loves have to fork over $96,824 for all 364 gifts, an even more eye-popping 10.8% increase compared to last year. 

PNC acknowledges that the PNC CPI’s surge stands in some contrast to the government’s CPI, which grew a mere 1.1%, “illustrating the difference in size of the two baskets of goods and services,” according to the firm. 

In fact, among the 12 gifts in the PNC CPI, only four items (Pear Tree, Four Calling Birds, Six Geese a–Laying and the Eight Maids-a-Milking) were the same price from last year.  

Not surprisingly for those eyeing the soaring price of certain precious metals, those five gold rings had a noticeable influence on the PNC Index.  “This year’s jump in the PNC CPI can be attributed to rising gold commodity prices, represented by the Five Gold Rings which went up by 30%, in addition to higher costs for wages and benefits impacting some entertainers,” said James Dunigan, managing executive of investments for PNC Wealth Management.

Regarding those labor costs, the 11 Pipers Piping ($2,356) and 12 Drummers Drumming ($2,552) saw modest increases (both up 3.1%), while the Lords-a-Leaping jumped 8% (to $4,766).  That said, the biggest dollar increase this year was for the Nine Ladies Dancing, up $820, a 15% boost. PNC noted that none of these performers received a wage increase last year, and were playing catch-up in 2010.  As the only unskilled laborers in the PNC CPI, the cost of the eight Maids-a-Milking is represented with the minimum wage.  They received no increase in pay in 2010 as the Federal minimum wage did not rise for the first time in three years. With the minimum wage flat at $7.25 per hour, hiring the maids this year cost $58.  

For the Birds?

Prices for the birds in the index flew higher in this year's index, in part due to the costs of feed as well as the “availability and demand for certain feathered friends that amplified several prices”. The Two Turtle Doves increased 78.6% (to $100), while those Three French Hens surged a whopping 233%, to $150. 

The Partridge in a Pear Tree was up just 1.3% to $161. But the partridge alone was 20% higher ($12), while its pear tree perch was identical to a year ago at $149. 

The cost of the Seven Swans-a-Swimming, which PNC notes is the category that generally provides the biggest swings from year to year in the PNC CPI, rose by 6.7% this year to $5,600 - following last year's surprising 6.5% drop. As the most volatile component in the index, the swans are removed to determine underlying inflation or core PNC CPI, which pushed the rate up 10% this year.  

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 repeated in the Internet version, with the core rates more than total rates. True Loves will pay a grand total of $34,336 to buy the items online - 9.2% more expensive than last year and almost $11,000 more than this year's traditional index.  "In general, Internet prices are higher than their non-Internet counterparts because of shipping costs for birds and the convenience factor of shopping online," Dunigan said. 

For a historical look at PNC's index, the updated Web site can be viewed at This year's site incorporates interactivity with a pop-up book theme narrated by Dunigan, allowing visitors to enjoy and reveal the 2010 PNC CPI results at their own pace.