It’s the holiday shopping season and as it has done for the last 39 years, PNC has calculated the cost of true love’s gifts based on the holiday song “The Twelve Days of Christmas.”  While the gifts of birds, precious metals and performers haven’t changed, the price to buy them all has soared this year, in line with what consumers are facing in the real world.

PNC’s Christmas Price Index (CPI), based on the price of the gifts in the song, grew by 10.5 percent in 2022, the third highest year-over-year increase in history of PNC’s whimsical holiday tradition. The overall cost to buy all 12 gifts in the song is a record $45,523.27 in 2022.

“True Love’s shopping tab reflects what’s happening in the broader economy this year as commodity and energy prices, along with supply chain disruptions, have driven the cost of goods and services up,” said Amanda Agati, chief investment officer for the PNC Asset Management Group.

Rising Costs Drive Growth

Birds comprise half of the gifts in the CPI and an overall increase in bird and feed prices are a factor in this year’s cost. Prices for the turtle doves ($600), French hens ($318.75) and geese ($720) all jumped by at least 9% in 2022. The partridge ($20.18) - and more pertinently - its pear tree home ($260) grew by nearly 26% this year, primarily due to increased costs of fertilizer for the tree.

Prices in the service economy also jumped in 2022, reflected in the cost of the performance-based gifts at the back half of True Love’s shopping list. Wage and labor cost growth drove prices higher for the Nine Ladies Dancing ($8,308.12), Eleven Pipers Piping ($3,021.40) and Twelve Drummers Drumming ($3,266.93.) The Ten Lords-a-Leaping – priced on the cost of hiring a ballet company - grew an astounding 24 percent year over year to $13,980, supplanting the swans as the most expensive single gift in the index.

The rising costs of goods and services due to inflation likely sent some investors seeking gold. That resulted in growing prices for the precious metal this holiday season and a 39% increase in the cost of the Five Gold Rings ($1,245) for True Loves – the largest year-over-year percentage increase for any of the gifts in the index.

“While it’s unlikely most holiday shoppers are looking to gift the way True Love does, the experience of a higher holiday bill is a reality,” Agati said. “Whether your shopping list includes birds and bands or something more traditional, the cost of production, shipping and labor is up this year, which means price tags follow suit.

Like the index, consumer behavior is the drumbeat for the U.S. economy,” Agati said. “With 70% of U.S. GDP tied to consumption, consumer financial health is key to future market performance. We will be keeping an eye on guiding stars like retail sales, savings rates and consumer sentiment as indicators of the success of this holiday season,” she added.

An Expensive Holiday Shopping Season

Despite the effects of inflation on holiday gift-giving this year, there are a few gifts in the index that saw no price increase in 2022. The Four Calling Birds ($599.96) and Seven Swans-a-Swimming ($13,124.93) remain at their 2021 price levels. And while some state and local minimum wage levels have risen in recent years, the federal minimum wage remains unchanged since 2009, meaning the cost of Eight Maids-a-Milking is yet again only $58 – the least expensive gift in the index.

The sticker shock of this year’s gifts may send other true loves flocking to cyberspace for better deals. They may want to think again, though. Shopping online for all 12 gifts will cost $49,663 in 2022, more than in-person shoppers would pay. Shipping birds is an expensive business.

“Online or in the store, 2022 could be a more expensive year for holiday shoppers,” Agati said. “All eyes will be on the Federal Reserve’s actions around interest rates to curb inflation and potentially tamp down prices in 2023, the next holiday season and beyond.”