WEBVTT - Holiday Cheer Comes at a Premium in 2025

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>You're listening to Bloomberg Business Week with Carol Masser and

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<v Speaker 2>tim Stenoveek on Bloomberg Radio.

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<v Speaker 1>Hey, we've been talking about this all day. Yeah, the

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<v Speaker 1>economic data that we are are not getting.

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<v Speaker 3>Well, we're going to get a read on inflation on Thursday, right,

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<v Speaker 3>and so one of the ways we have some fun

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<v Speaker 3>every holiday season is figuring out what the cost of

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<v Speaker 3>the twelve days of Christmas are.

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<v Speaker 2>Yeah.

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<v Speaker 1>So the reason we're talking about this is because it's

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<v Speaker 1>just one read on inflation. Another read is what Carol mentioned,

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<v Speaker 1>PNC's Christmas Price Index, the bank has been doing for

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<v Speaker 1>forty two years. We've got Amanda Gatti with US, chief

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<v Speaker 1>Investment Officer at PNC Asset Management Group. She joins us

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<v Speaker 1>from Philadelphia. So, Amanda, is it more expensive than it

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<v Speaker 1>was last year?

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<v Speaker 2>Let's like, what's the headline here?

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<v Speaker 4>It's almost always more expensive. Thanks guys so much for

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<v Speaker 4>having me. On a year over year basis, the Christmas

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<v Speaker 4>Price Index as upzero point five percent, so we are

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<v Speaker 4>handily outpacing the BLSCPI version. So it's gonna cost true

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<v Speaker 4>love this holiday season? All right?

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<v Speaker 3>So wait, what's costing us more.

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<v Speaker 4>Well, sadly, I mean, we talk about this every year,

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<v Speaker 4>but sadly, my all time favorite gift is actually the

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<v Speaker 4>biggest mover by far. So five golden rings. Do I

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<v Speaker 4>have to elaborate on that.

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<v Speaker 3>Gold was an outperforming acid?

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<v Speaker 2>Nobody asked for five crypto rings Bitcoin, No.

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<v Speaker 4>They didn't, although they would have done okay for at

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<v Speaker 4>least part of the year. But the five golden rings

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<v Speaker 4>weren't up as much as the price of gold itself,

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<v Speaker 4>still up a very hot thirty two and a half percent.

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<v Speaker 4>It's really very much a reflection of what we think

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<v Speaker 4>is a little bit of a margin squeeze right late

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<v Speaker 4>innings of the cycle. Still positive growth story for the economy,

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<v Speaker 4>but margin pressures are building, and so we are seeing

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<v Speaker 4>that in the price of the golden rings being passed

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<v Speaker 4>through or maybe not quite fully passed through this holiday season.

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<v Speaker 1>Okay, so those are the golden rings. What else was

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<v Speaker 1>what's the second most expense? Not most expensive, but the

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<v Speaker 1>thing that went up the second most.

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<v Speaker 4>Pear tree really is which which nobody wants? A partridge? Okay,

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<v Speaker 4>So the partridge was flat on a year over year

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<v Speaker 4>basis not a gift.

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<v Speaker 2>That's not a gift that keeps on giving.

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<v Speaker 4>The tree is it's an awful lot of work. But

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<v Speaker 4>the pear tree is what we refer to as a

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<v Speaker 4>proxy for housing costs. And so when we think about

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<v Speaker 4>housing and the housing market in this country, clearly running

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<v Speaker 4>pretty hot on a relative basis year over year, affordability

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<v Speaker 4>getting kind of challenged, right, Even though mortgage rates have

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<v Speaker 4>come down some, it hasn't made a huge difference in

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<v Speaker 4>terms of UH supply and demand and inventory levels. We're

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<v Speaker 4>still very short housing stock. So pear tree also running

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<v Speaker 4>hot on a year over year basis.

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<v Speaker 3>Also performers, right, I mean the cost of labor. I

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<v Speaker 3>guess you could kind of say.

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<v Speaker 4>Well, it's sometimes it is the cost of labor. Sometimes

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<v Speaker 4>it's contractual escalators. This year, the big one is the

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<v Speaker 4>ten Lords of Leaping. And I've been having fun all

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<v Speaker 4>year talking about this one because Oasis has been the

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<v Speaker 4>hottest concert ticket in town. You could refer them as

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<v Speaker 4>the Lords of rock perhaps, But so this is the

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<v Speaker 4>real world concert tickets experiences demand driving up those ten Lords.

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<v Speaker 1>How do you measure that just on a on a

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<v Speaker 1>basis like are you just looking at an oasis? Are

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<v Speaker 1>you looking at everybody?

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<v Speaker 3>No?

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<v Speaker 4>I'm teasing. I just it's fun to try, guess. I mean.

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<v Speaker 1>Went to an Oasis concert. At two Oasis concerts, I

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<v Speaker 1>know one of them. Where did you go? Tell you

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<v Speaker 1>our producers? Yes, Scotland in LA. She traveled all the

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<v Speaker 1>way for Oasis from New York.

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<v Speaker 2>Like, so there's some.

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<v Speaker 4>Amazing Yeah, absolutely, as am I. But I don't have

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<v Speaker 4>ten lords laying around here. So we do our best

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<v Speaker 4>to try and talk to dance companies and theater companies

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<v Speaker 4>on a year over year basis. There's a method to

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<v Speaker 4>this scientific madness, and so I'm just trying to make

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<v Speaker 4>it a little bit relatable. The lords of all the

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<v Speaker 4>performers were the biggest standout on a year of your basis,

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<v Speaker 4>so naturally it must be the Oasis effect.

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<v Speaker 3>If only I had ten lords a leaping just hanging

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<v Speaker 3>around somewhere, just kidding, just kidding. Hey, what stayed the same?

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<v Speaker 3>Or did anything go down?

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<v Speaker 4>Almost nothing goes down. Let's get real here, I would

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<v Speaker 4>love to say, aside from the pandemic, when we had

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<v Speaker 4>to shut the lights off on a lot of the

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<v Speaker 4>performers and experiences just as a function of what was

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<v Speaker 4>happening in the real world economy, a number of gifts

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<v Speaker 4>did stay flat on a year over your basis, so

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<v Speaker 4>two turtle doves, three French hens, four calling birds, the

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<v Speaker 4>seven swans, the eight maids. So there was a decent

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<v Speaker 4>amount of stability on a year over year basis, but

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<v Speaker 4>some pretty significant moves in the top three or four

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<v Speaker 4>on a year of your basis.

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<v Speaker 2>How does this? I mean?

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<v Speaker 1>Look, we're you know, this is fun, and we do

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<v Speaker 1>this because it's fun, but it's also does give us

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<v Speaker 1>an opportunity to talk about the real world inflation that

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<v Speaker 1>we're seeing and also real world asset price movements, Amanda.

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<v Speaker 1>As Carol mentioned, we're getting some data this week, partial

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<v Speaker 1>data when it comes to CPI. Some of it will

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<v Speaker 1>be incomplete, some of it will be old, of course,

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<v Speaker 1>But overall the index it moved more than headline figures.

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<v Speaker 1>When it comes to CPI.

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<v Speaker 4>It sure didn't. That's not always the case. But you

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<v Speaker 4>have to think about the gifts in the Christmas Price

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<v Speaker 4>Index as a very specialty gift basket of goods and services,

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<v Speaker 4>so it's not really a reflection of the broad economy

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<v Speaker 4>and the US consumer in total. It tends to lean

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<v Speaker 4>higher end in terms of the spectrum there, but I

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<v Speaker 4>think it is a good indicator for what some of

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<v Speaker 4>the pricing trends may look like this holiday season. So

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<v Speaker 4>the consumer is definitely hanging in there. On a relative basis,

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<v Speaker 4>we definitely see consumers continuing to spend, and retail sales

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<v Speaker 4>data continues to look solid. Holiday shopping looks good, but

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<v Speaker 4>it's definitely going to cost consumers this holiday season.

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<v Speaker 3>Yeah, what's the next I'm curious about what data points

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<v Speaker 3>you're kind of keeping an eye on to get an

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<v Speaker 3>idea of what happens maybe in the first half of

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<v Speaker 3>twenty twenty six, or is it too soon to kind

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<v Speaker 3>of make a bet on anything we see over the

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<v Speaker 3>next couple of weeks.

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<v Speaker 4>Well, I don't know if it's too soon necessarily to

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<v Speaker 4>bet on it. I think the challenge is that some

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<v Speaker 4>of the data is stale, so it's hard to extrapolate

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<v Speaker 4>a trend from data points that are old or maybe incomplete.

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<v Speaker 4>So as it relates to consumer health, and we're obviously

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<v Speaker 4>focused on how the holiday shopping season plays out, retail

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<v Speaker 4>sales data, savings rates, even just consumer sentiment, there's a

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<v Speaker 4>number of other components and indicators that we can use

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<v Speaker 4>to gauge the success of this this holiday season and

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<v Speaker 4>perhaps even the market path forward in the new year.

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<v Speaker 2>So good shape. We're in good shape.

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<v Speaker 4>I think we're in good shape.

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<v Speaker 2>Okay, yeah, unless you we're gonna.

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<v Speaker 3>Golden rings, or you're getting ten Lords of Leaping, or

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<v Speaker 3>unless you pipers.

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<v Speaker 1>Might not be, might.

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<v Speaker 4>Not be in good shape. But the rest of us

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<v Speaker 4>are in good shape.

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<v Speaker 2>You're in good shape.

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<v Speaker 1>Unless you're looking for Owaisis tickets because apparently they're not

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<v Speaker 1>boring anymore.

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<v Speaker 2>So that's it.