The true cost of Christmas The PNC Financial Services Group PITTSBURGH, Dec. 3, 2001 PNC Advisors, a member of The PNC Financial Services Group, announced today that the cost of the goods and services named in the holiday classic, "The 12 Days of Christmas," has risen to $15,748 this year, outpacing the United States Government's measure of inflation so far in 2001. The research experts at PNC Advisors annually track these prices, from the partridge in a pear tree to the 12 drummers drumming, to produce the Christmas Price Index, now in its 17th year. The total cost of the gifts last year was $15,210. While the overall index rose by three and a half percent, a few of the individual gifts showed significantly higher spikes in price over 2000. For instance, the price of the five gold rings rose a full 50 percent, from $250 to $375. "When the economy is in recession, investors generally put their money into assets with intrinsic value, like gold, as opposed to buying financial assets, like stocks," commented Jeff Kleintop, chief investment strategist for PNC Advisors. "Gold is much more popular during recessionary times," he said. Of course, seasonal factors play a role in the pricing of certain goods. The pear tree, for example, also experienced a dramatic increase in price, attributed primarily to good weather. "The conditions along the mid-Atlantic region were just right for the Chanticleer pear tree," noted Rebekah McCahan, investment strategist who provides the research for the annual Christmas Price Index. "This year's crop yielded taller, heartier trees that cost more," she said. The price rose over 27 percent, from $98 to $125. Online shopping for the same items proved to be more expensive than buying them via traditional outlets. It would cost nearly $8,000 more to purchase all of these goods and services over the Web, primarily due to pricey shipping and travel services. The bill for the maids, ladies, lords, pipers and drummers alone -- 50 people in all -- would cost approximately $17,800 online, versus only about $11,000 for similar services bought locally. As a general trend, the service component of the song is becoming an increasingly larger part of the overall makeup of the Index since PNC began tracking it 17 years ago. In 1986, for example, the ratio of the cost of goods to the cost of services was about 60/40. Today, that breakdown is closer to 30/70. "We are seeing much higher costs for the skilled labor, such as the dancers, leapers, pipers and drummers, similar to what we've seen in the U.S. economy. Technology has improved productivity and slowed price increases in merchandise, whereas the rise in the cost of services over the years has been much more dramatic," said Kleintop. The maids-a-milking, the only unskilled labor in the song, have not been affected by this trend. Based on the same minimum wage as last year, the cost for one hour of the eight maids' time remains at $41.20. As part of its annual tradition, PNC also tabulates the "true cost of Christmas," which is the total cost of all of the items in the famous carol, including all of the repetitions. The price tag for the 364 items this holiday season is $62,935, up from 2000's true cost of $60,307. "An investment in the true cost of Christmas would have yielded a better return than the stock market over the past year. However, the true cost of Christmas hedge fund has yet to be created," remarked Kleintop. PNC Advisors, with $59 billion in assets under management as of Sept. 30, 2001, is a member of The PNC Financial Services Group. It provides a full range of tailored investment and traditional banking solutions to affluent individuals and families, including full-service brokerage through J.J.B. Hilliard, W.L. Lyons, Inc., a registered broker-dealer and member of NASD, SIPC and NYSE. PNC Advisors also serves as investment manager and trustee for employee benefit plans, and charitable and endowment assets. PNC Advisors currently operates in 21 states and serves over 320,000 clients. The PNC Financial Services Group, Inc., (NYSE: PNC) headquartered in Pittsburgh, is one of the nation's largest diversified financial services organizations, providing regional community banking, corporate banking, real estate finance, asset-based lending, wealth management, asset management and global fund services. return to the Designers' Bookshelf!