For 40 years, PNC has calculated the prices of the 12 gifts from the classic holiday song, “The Twelve Days of Christmas.” This year, increases in the 40th annual Christmas Price Index® (PNC CPI) are primarily driven by labor costs, mirroring the U.S. economy.
CPI
The PNC CPI is a light-hearted take on the Bureau of Labor Statistics’ CPI, which measures the change in prices consumers could expect to pay for True Love’s gifts, outlined in the classic holiday carol, “The Twelve Days of Christmas.” It’s calculated using a method similar to the government’s consumer price index (CPI). The PNC CPI edged up 2.7%, noticeably lower than last year’s hefty 10.5% increase and slightly less than the CPI topline, which is at 3.2% year over year.
The price of services overall has increased while the price of goods has slowed. This is a flip from 40 years ago, when prices for the cost of goods were much higher than services, which mirrors the trend in the U.S. economy. In the PNC CPI, goods are represented by the birds and the gold rings, while services are the entertainers and the maids.
The government’s CPI measures the cost of goods and services for consumers; you can think of it as your cost of living. Each month, the U.S. Bureau of Labor Statistics reports on the CPI; since those numbers are tied to inflation, they tend to be indicators of interest rates. The CPI measures the cost of goods and services—in other words, your cost of living. That’s important to taxpayers since the Tax Code provides mandatory annual adjustments to certain tax items, like the standard deduction amounts, based on interest rates.
(You can see the tax adjustments, including brackets and standard deductions, for 2024 here.)
But not all adjustments are equal. To keep the comparison between its index and the government’s CPI fair, PNC excludes the cost of the swans, typically the most volatile item in the list (the government similarly excludes energy and food prices).
12 Days of Christmas
Overall, the 12 gifts that compose the PNC CPI increased to $46,729.86 this year.
“The most aggressive Federal Reserve interest rate hiking cycle in history and slowing growth in some of the largest global economies, along with other macroeconomic crosscurrents, have helped lower the PNC CPI compared to recent years,” said Amanda Agati, chief investment officer for PNC’s Asset Management Group. “Certain industries are experiencing stickier inflation than others, some of which is well beyond the Fed’s control. The good news is that wage growth is now higher than the PNC CPI, which should help True Loves deck the halls this year, considering we are still in a high-inflation environment.”
There were no price increases this year for five of the gifts, including the Four Calling Birds, Five Gold Rings, Seven Swans-A-Swimming, Eight Maids-A-Milking, and Nine Ladies Dancing.
Although the Partridge cost was unchanged, there was a 15% jump for the Pear Tree—a proxy for housing costs that continue to increase despite the highest mortgage rates since 2000.
While True Loves benefit from little to no increases in goods on their shopping list, rising wages for skilled labor, represented by the performers, make a more significant dent in their holiday budget this year. Although the cost of Nine Ladies Dancing did not increase, Ten Lords-a-Leaping jumped to new heights, Eleven Pipers Piping rose to a higher pitch, and the 12 Drummers Drumming drummed up a higher sum. Prices for performers increased 3.3% this year, substantially lower than last year’s 14.6% surge.
Here’s the entire list for 2023, along with the percentage changes from 2022:
The cost of all 12 gifts is reported on PNC’s interactive website, which is meant to be as fun as it is educational.
If, however, you really wanted to impress your true love by nabbing all 364 items–the number of the items as repeated throughout the song over and over (and over)–you’d have to cough up $201,972.66, or 2.5% more than last year, the first time that purchasing all 364 gifts crossed the $200,000 threshold.
Stand Outs
Buying all 12 gifts online costs 4.8% more than in 2022 for a price tag of $52,024.03. The convenience of shopping from home is still impacted by elevated shipping and packaging costs that have yet to ease since the pandemic.
The PNC CPI, which excludes the Seven Swans-a-Swimming, crept up 3.7%. Swans typically represent the most volatile price among the items. However, their price remains flat again this year. That might be a positive sign for investors bracing for investment “black swan” events or fear finding coal in their stockings as recession concerns linger.
The turtle doves are rare and experienced this year’s largest percentage increase at an eye-popping 25% due to limited supply.
“Despite the Federal Reserve’s progress in bringing down inflation, it remains above the Fed’s 2% long-term target level against a backdrop of a tight labor market and resilient consumers,” Agati said. “Investors continue to focus on two critical variables for the path forward: signs that inflation is moving back toward the Fed’s target and an end to the most aggressive rate hiking cycle in history. In the absence of confirmation on both, we think markets are likely to stay choppy.”
“Much like the index, consumer behavior is the drumbeat for the U.S. economy,” Agati said. “We will be keeping an eye on guiding stars like retail sales, wage growth, savings rates and consumer sentiment as indicators of the success of this holiday season.”
About PNC Bank, N.A.
PNC Bank, N.A., is a member of The PNC Financial Services Group, Inc. (NYSE: PNC). PNC is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking, including a full range of lending products, specialized services for corporations and government entities, including corporate banking, real estate finance, and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.
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