The Twelve Days of Christmas

In 1984, after all the receipts were added up, the cost of “The Twelve Days of Christmas” would have set you back $12,623 - the goods alone accounting for 62 percent of your total bill. Today, the numbers tell a different story. The total cost has climbed to $17,297, a 1.6 percent annualized increase over 20 years, but services now account for 74 percent of the index, indicating a steady rise in the cost of skilled labor while the price of two turtle doves and three French hens may be a little easier on your wallet.

Every year since 1984, PNC Advisors has provided a tongue-in-cheek economic analysis, based on the cost of goods and services purchased by the True Love in the holiday classic, “The Twelve Days of Christmas.”

The Christmas Price Index has consistently reflected changes in the economy and continues to do so in the 20th anniversary version. The 2.4 percent year-over-year increase in the index closely mirrors that of the government’s Consumer Price Index – a widely used measure of U.S. inflation. Not only is the high cost of fuel reflected in the cost to deliver a pear tree, but this year’s index also underscores the trend to outsource labor. Skilled labor mentioned in the song, such as wages for the dancing ladies have increased 5.5 percent annualized over 20 years versus the maids-a-milking, which have only seen a 2.2 percent annualized pay raise. In the broader economy, the outsourcing of less skilled labor is helping to keep those wages low.

“The Christmas Price Index reflects the changing economic mix in the U.S. away from manufacturing to a more service based economy,” said Jeff Kleintop, chief investment strategist for PNC Advisors. “The abundance of cheaper labor in countries such as India and China has resulted in pressure on U.S. manufacturers to outsource unskilled labor. As a result the cost of skilled dancers has steadily increased while the unskilled milk maids haven’t managed an increase in pay for their services in many years.”

Thanks, Bob!