Increase is the smallest since 2002, when index fell 7.6 percent
Published in the December 24, 2014 – January 6, 2014 issue of Morgan Hill Life
Dan Newquist
Dan Newquist
Have you ever wondered what it would cost to purchase all of the gifts listed in the classic holiday carol “The Twelve Days of Christmas”?
I find this tongue-in-cheek economic analysis a fascinating and entertaining slice of economics appropriate for the season. 2014 marks the 31st year of PNC Wealth Management’s “PNC Christmas Price Index®” (PNC CPI). The index tallies the price tag for these gifts from year to year, which in 2014 totals $27,673.21, just $280.40 more than 2013.
This 1 percent increase is the smallest since 2002, when the index fell 7.6 percent. This year, the PNC CPI’s increase is close to the government’s Consumer Price Index measurement of 1.7 percent from October 2013 through October 2014.
Since inception in 1984, the PNC CPI is 118 percent higher while inflation is up 127 percent over the same period. Intriguingly, according to Jim Dunigan, chief investment officer, PNC Wealth Management, “While there are exceptions in given years, what’s most interesting about the index’s history is that since the beginning, increases have averaged 2.8 percent, which is exactly the same number of the U.S. inflation index.”
He went on to observe the 2014 PNC CPI, “the recurring theme seems to be that with energy prices and labor costs contained, the overall index increase has been modest despite a few large increases in individual items.”
Key Components: Out of all 12 items, eight of them remained the same price as last year, but the Six Geese-A-Laying went up a staggering 71.4 percent and the Partridge in a Pear Tree increased 33.3 percent. Also increasing were Three French Hens, from $165 last year to $185 and a single performance of 10 Lords-a-Leaping increased from $5,243 to $5,348.
Same price as before: Two Turtle Doves, Four Calling Birds, Five Gold Rings, Seven Swans-a-Swimming, Eight Maids-a-Milking, Nine Ladies Dancing, 11 Pipers Piping and 12 Drummers Drumming. For you True Lovers out there, the “True Cost of Christmas,” which is the total cost gifted by a True Love who repeats all of the verses, is $116,273.06.
Fortunately for me, my true loves have Apple products on their gift lists this year. Enjoy your holiday!
For educational purposes only. Not intended as gift giving, investment, tax or legal advice. DAN NEWQUIST, CFP®, AIF® is a Principal Investment Advisor Representative with RNP Advisory Services, Inc., a registered investment advisor. He can be reached at (408) 779-0699 or [email protected]. Securities offered through Foothill Securities, Inc., member FINRA/SIPC, an unaffiliated company.
