When coming across economic statistics, readers often decide to read no further, even though such numbers affect us more than we know. The U.S. Bureau of Labor Statistics computes a large number of indices to track the economy, including variations of the Consumer Price Index (CPI), which measures the average change in prices that consumers pay for goods and services over time.

For thirty-seven years, PNC Financial Services Group of Pittsburg, Pennsylvania, has continued a light-hearted take on the CPI by computing the Christmas Price Index. This whimsical index tracks prices of the twelve items of the song, “The Twelve Days of Christmas,” bestowed upon the recipient by her generous, and obviously well-heeled, “True Love.”

Nothing has escaped the effects of this horrible pandemic, not even the Christmas Price Index. Let’s take a look at the numbers for 2020 and compare them to 2019.

Starting out with the birds, the price of the Partridge in a Pear Tree has remained unchanged at $210.18. The Pear Tree prices out at $190 with the Partridge at $20.18. This set of items is among the least costly, bearing little weight on the index.

In contrast to price stability of the Partridge in a Pear Tree, the Two Turtle Doves nipped “True Love” with a sharp 50% price increase, from $300 in 2019 to $450.

“True Love” was no doubt relieved that the Three French Hens increased by a more modest 15.7 percent, from $181.50 in 2019 to $210 in 2020.

The Four Calling Birds saw no price increase; the price remaining a just few pennies under $600.

The Five Golden Rings hit “True Love” with a 14.5% rise, rising from $825 to $945. Economists constructing this index remind us that in 2020 gold traded up 40% from trough to peak, but retraced some of that rally as financial markets recovered and inflation fears subsided.

“True Love” was waylaid by another price increase, a 35.7% increase in the Six Geese-a-Laying, from $420 to $570. 

The economists offer for explanation the inability for consumers to eat at restaurants during the lockdown, driving “an increased need for cooking at home, leading to an unexpected increase in demand (and subsequently prices) for our fowl friends.”

The Seven Swans-a-Swimming are the priciest item in the song. However, the price remained steady in 2020 at $13,125.

The Eight Maids-a-Milking remain a curious item for many of my readers and me, continuing to marvel at the changes in technology in dairy production. From the old-fashioned milking machines we grew up with decades ago, to pipelines, to milking parlors, and incredibly, to robotic milking, it is nothing short of astounding. However, the Eight Maids-a-milking are presumed to perform this laborious chore by hand, pricing out at a mere $58, unchanged for years. Obviously, these hard-working maids have neither union representation nor access to modern technology.

It is from this point on that we see the most dramatic and unforeseen effects of the pandemic on “True Love’s” gifting. Because of the need for social distancing and avoidance of crowds, live performances for dancers and musicians have been canceled for this Christmas season. Let’s take a closer look.

In 2019 the Nine Ladies Dancing priced out at $7,552 and change. In 2020, they were unavailable for “True Love” to hire for the object of his affection.

The Ten Lords-a-Leaping priced out at $10,000 in 2019, but due to the pandemic were unavailable in 2020 — saving “True Love” a hefty piece of change, however unfortunate for the object of his affection.

The Eleven Pipers piping — the musicians commanding less remuneration than the dancers — priced out at $2,748.87 in 2019, but were unavailable in 2020.

It was the same story for the Twelve Drummers Drumming; $2,972 and change in 2019 but unavailable in 2020.

As with many enterprises, the major cost is labor. By omitting the costly dancers and musicians, the total cost of the items in the song is dramatically reduced for 2020. The total cost of the items available in 2020 add up to $16,358 and change, compared to just under $38,994 in 2019. This represents a cost saving to “True Love” of $22,636, or close to 58%.

Recall that in the song, the items are given repetitively over the twelve days. This generous action of “True Love” adds up to $105,562 in 2020 compared to the hefty $170,298 in 2019, for a cost saving of $64,736, or 38% for 2020.

Comparing prices for different sets of items in 2019 and 2020 is not a valid procedure by which to compute price index numbers. If we confine our analysis to the available items for both years, omitting the musicians and dancers, prices for the available items increase by 2.9%. This 2.9% increase for the Christmas Price Index is greater than the Bureau of Labor CPI of 1.3%, the latter being less than the Fed’s target of 2%. Bear in mind that the available items in the Christmas Price Index represent a narrow category and do not suggest impending inflation.

Economists responsible for constructing the Christmas Price Index offer several concluding thoughts. It’s too early to call “True Love” a scrooge because he gets off relatively easy this year. If musical and dancing performers resume live performances in 2021, he will undoubtedly be on the hook with some pricey IOUs. For this year, these idle artisans no doubt have another round of fiscal stimulus on top of their Christmas wish list.

Finally, as consumption represents some 70% of GDP, we are reminded that consumer health is key to future market performance. As has been true along, to get this economy revved up to full capacity, we have to get this pandemic under control. 

Successful rollout of the vaccine is on top of all our Christmas wish lists.

— John Waelti of Monroe, a retired professor of economics, can be reached at jjwaelti1@tds.net. His column appears Saturdays in the Monroe Times.