2020 is a year that nobody will forget, characterized by the rapid spread of COVID-19, an aggressive policy response, and over the past few weeks, the distribution of vaccines that many hope will bring an end to the pandemic in 2021. However, with a new fiscal package being deployed in the U.S. and continued support likely, many have become concerned that inflation will skyrocket in the years to come. Only time will tell, but as we approach the holiday season, it seems appropriate to take stock of how prices have changed for the gifts delivered in the classic song, The Twelve Days of Christmas.

According to PNC, the overall price of these gifts declined by 58.5% from 2019 levels, as the cancellation of live performances impacted the data. That said, prices did not decline across the board. To start, the cost of a partridge was unchanged from a year prior, while the price of two turtle doves rose by 50%. The price of three French hens rose by 15.7%, whereas four calling birds saw prices hold steady. Given investor concern about the potential for inflation to rise over time, the price of five golden rings increased 14.5%.

Six geese-a-laying saw their prices rise by 35.7%, the second largest increase of 2020. However, the seven swans-a-swimming, as well as the eight maids-a-milking both saw prices unchanged from 2019 levels. And finally, due to social distancing measures, there was no data available on how prices for the nine ladies dancing, ten lords-a-leaping, eleven pipers piping and the twelve drummers drumming fared during the past year. One would expect, however, that pent up demand for these in-person experiences will lead prices to rise in 2021.

Although we expect economic growth will be under pressure during the coming months, a robust acceleration in the pace of economic activity should occur during the second half of the year. Against this backdrop cyclical assets should outperform, but a balanced approach to investing will lead to a smoother ride for clients. If we can keep clients comfortable, we can keep them invested, and if we keep people invested, we can improve the chances that they successfully accomplish their long-term investment goals. 

Happy holidays from all of us on the Market Insights Team.

PNC Christmas Price Index (CPI)
2020 Year-over-year % change 

Source: PVC Christmas Price Index
*Items not available in 2020 due to COVID-19 restrictions 

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