Shoppers may be upset about the rising prices of gifts this holiday season. The good news, however, is that they often do not buy much, if anything, from the famous “Twelve Days of Christmas” list.
When was the last time you saw two turtle doves, three French hens, or four calling birds on anyone’s wish list?
And five golden rings? Isn’t one ring enough for your true love to send you? What is the cost of true love? Or the swan?
Buying all 12 categories of gifts mentioned in the famous yet annoying Christmas song will cost you $46,729.86 this year, according to the 40th annual Christmas Price Index from PNC Bank, which is an unofficial estimate of the consumer price index. (The actual cost of Christmas in the song – if you keep buying two turtle doves every time they are mentioned in the song, along with all the other items mentioned repeatedly – would reach nearly $202,000.)
The collective price increase was 2.7% for the items mentioned in the song – including the six geese a-laying and the seven swans a-swimming and the eight maids a-milking – if you weren’t buying the same items repeatedly. This year, all those things will take an additional $1,206.59 out of your bank account.
Added to that – including the nine ladies dancing and the ten lords a-leaping and the eleven pipers piping and the twelve drummers drumming – is just shy of the price of a new car or truck. The average price paid for a new vehicle was $47,936, according to October data from Kelley Blue Book.
Me? Give me a big red bow on the hood, throw a little puppy on those leather seats, toss some Starbucks gift cards in the glove compartment, and I’ll say my true love and I are good to go. Anyway, those gifts aren’t in the song, so we’ll estimate the price of the swan in the pear tree. (The bird in 2023: $20.18, the same price as last year. The flowering pear tree: $299, up 15%.) Fortunately, most of us don’t buy our true love all those items mentioned in the “Twelve Days of Christmas.” All together, you’ll pay $46,729.86 this year, an increase of 2.7% from last year, according to the PNC Christmas Price Index.
What’s amusing about PNC Bank’s Christmas Index is that it gives you a whimsical look at inflation. Unlike the price of gold, the price of golden rings hasn’t increased significantly
“Gold doesn’t go out of style, but apparently simple golden rings do,” according to the PNC Christmas Index. “The price of five golden rings has remained steady for the first time in over five years.”
Amanda Agati, head of the Asset Management Division at PNC Bank, told me that jewelers may find demand for gold rings is not as strong in 2023 as in previous years, and they’re not seeing the same foot traffic as in the past.
She said, “The increase in the price of rings won’t clear the stock off their shelves,” adding, “So they haven’t raised prices year-over-year.”
Despite a significant drop in October, gold prices overall have risen in 2023. Gold hit $2,037.74 per troy ounce on December 1 early in the day. This represents a 10.8% increase from last year.
This week, gold prices hit a record high when they traded above $2,135 per ounce on Monday in London.
But the PNC Christmas Price Index looks at five golden rings, just as you will hear them repeated in the song, not at the price of the product itself.
She said:
“What we are pricing is the actual golden ring.”
PNC Bank is conducting a survey of several goldsmiths to gauge the market and is trying to maintain the same sources for stability.
The prices of the four calling birds have not risen
The increase in the price of the full basket of goods and services provided in “The Twelve Days of Christmas” by 2.7% seems like a bargain these days. This is particularly true alongside last year’s significant price increase of 10.5% for these 12 gifts.
In contrast, the official Consumer Price Index rose by 3.2% in October, year-over-year, according to the U.S. Bureau of Labor Statistics.
The price of the two turtle doves increased by 25% to a cost of $750 in 2023. But some items have seen price stability or an increase of 0% – the swan, the four calling birds, the five golden rings, the seven swans a-swimming, the eight maids a-milking, and the nine ladies dancing.
The swan costs $13,125.
The cost of the six geese a-laying rose by 8.3% to $780. Since 2018, the cost of these geese has increased by nearly $500.
But any shopper can tell you that the real problem is all the repeated successive price increases.
The same 12 gifts had a total cost of $38,993.59 in 2019, according to PNC Bank’s calculations. We’re talking about a 19.84% increase in just four years.
The cost of the gifts was $20,023.58 in 1984. Yes, the index was significantly lower in some years – like 1995 when it was down 26.3% with a total cost of $17,915.25. (The price of the swan dropped by 50% that year due to a successful white swan breeding program.) The Consumer Price Index for PNC Bank was introduced in 1984 by the former chief economist of PNC Bank in Philadelphia. The index often reflects trends in the U.S. economy.
Ajati from PNC Bank explained that some prices reflect key parts of the economy, such as ongoing inflation in service prices. The cost of 11 pipers piping rose by 6.2% – reflecting a tight labor market and the cost of hiring musicians, as well as the expenses associated with hosting the performance.
If wages have risen in many companies, why haven’t the costs of the eight maids a-milking increased?
The reason, she said, is that the cost of maids is measured by the federal minimum wage, which has remained steady at $7.25 per hour. The cost of the maids stayed at $58 this holiday season, reflecting one hour of pay for each of the eight maids.
The cost of the ten lords a-leaping rose by 4% from last year to $14,539.20 in 2023, reflecting significant contractual wage increases. “It has nothing to do with pay between genders or any type of gap,” Ajati said.
Many holiday shoppers rely on deals they find while shopping online. However, the goods and services tracked in PNC Bank’s Christmas Price Index actually lead to higher costs when buying items online, according to Ajati. The higher prices often reflect additional costs for shipping, handling, and even insurance.
The cost of the five golden rings in the PNC Bank Index has risen by about 35% from last year when shopping online.
The cost of the five golden rings purchased in-store remained steady at $1,245. This is the first time in over five years that the price has remained unchanged.
But online, the cost has jumped from $1,089.75 last year to $1,469.75 this year.
Noted
Ajati noted that the traditional Christmas Price Index is up 2.7% from last year. However, the overall price basket for the online version of the same index is up 4.8%.
She said, “It’s funny because everyone assumes that shopping online, you’re going to get a deal.” But the items in the song are not sold everywhere; they are a very unique gift basket.
She added, “You’re not going to get a lot of free shipping.”
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Pricing these unusual goods may give some signals about consumer behavior.
This holiday season, according to her, points to the pressures consumers feel from inflation, suggesting a relative decline in spending, especially on some high-priced items.
In contrast, Ajati said that lower-priced goods, such as some toys like Barbie, are still hot this holiday season.
Many retailers are highlighting gifts that cost $20 or less, or even $35 or less this holiday season, in an attempt to attract the budget-conscious consumer.
However, high-end items, despite that, are not selling robustly. When looking at sales trends related to jewelry or smartphones or home appliances, even car sales, Ajati said, all have slowed down.
She said, “Consumers are still spending but not at the pace we saw in recent years.”
PNC Bank expects the U.S. economy to slip into a mild recession starting mid-2024, as high interest rates continue to pressure consumers and the economy.
She said, “Consumers have borne a lot over the past few years.” She added, “On one hand, at the start of the pandemic, we put a lot of incentives and liquidity and cash into consumers’ hands and it did what it was supposed to do, which was to create a floor in an unprecedented environment.”
She noted that some of this money is still there to support spending and the economy, leaving many consumers in very good shape.
However, we are now seeing more consumers turning to credit cards and other loans to continue buying.
Black Friday and Cyber Monday saw record online sales. However, Ajati emphasized that retailers are making consumers spend by offering significant discounts and deals, despite their very high regular prices.
She said, “It feels like every day is Cyber Monday.”
Consumer spending has been a key driver of economic growth, but she indicates that this is likely to taper off in the future. She said, “We want to see how long consumers keep pushing forward.”
Her prediction: “I think consumers are going to start to breathe here.”
In 2017, PNC Bank noted that the relatively small overall price increase for the 12 gifts of less than 1% reflects a world where companies seem “hesitant to pass price increases to consumers.”
Not so much in recent years.
Shoppers can tell you that everyone seems ready to raise their prices in recent years. But Ajati sees some signals that suggest retailers no longer have the pricing power they had in past years – and this might be what we see in those five gold rings.
To contact writer Susan Tompor on personal finance: stompor@freepress.com. Follow her on Twitter @tompor.
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The article originally appeared in the Detroit Free Press: The “Twelve Days of Christmas” gift list will cost you this much in 2023
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