The true cost of Christmas (1)

The 2016 Christmas Price Index is out

By Laura Fuller

Each year, PNC releases an updated Christmas Price Index (CPI) that calculates the actual cost of the gifts mentioned in the classic holiday song, “The Twelve Days of Christmas.” This annual tradition provides a fun, festive way for people to learn about the economy.

Like the Consumer Price Index, which measures the changing cost of goods and services annually, the CPI offers insight into consumer spending and economic trends, telling us how much inflation has grown or shrunk, for example, through the years.

This year’s total Christmas Price Index is $34,363.49, an increase over 2015 of 0.7%. A steady rate of inflation has been evident over the past four years. Since the CPI’s launch in 1984, the total cost has increased 82% from $18,845.97.

Two main reasons have driven this increase. The first is the fact that goods can be purchased online, which increases prices. Rebekah McCahan, the creator of The True Cost of Christmas, affirms that online shopping has affected the way that various items are priced. In general, the internet has made items on the list more costly than before. Goods that are purchased online are often more expensive than those purchased in-store. This is because of shipping and handling costs becoming an additional expense.

The second reason is that federal laws have increased the minimum wage, making service charges higher through the years.

Despite price fluctuations, retailers have managed to maintain the prices of gold rings, geese, calling birds, and French hens in 2016. Pipers piping and drummers drumming are both more costly items on the list this year due to wage inflation and increased pay. Wages for both civilian and private industry workers have increased by 2.3% as of September 2016. Maids-a-milking, $58, is the cheapest entry on the list, as a result of the national minimum wage which has not changed since 2009.

For more information about PNC’s Christmas Price index, visit the project’s website, where you can explore trends using an interactive chart. You can also download a CPI colouring book to ease holiday stress.

This post first appeared in TINAN 76. Subscribe to TINAN for the latest economic development news and resources.