Valentine’s Day and Inflation

Next week is an exciting one for both lovers and economists. Most are probably aware that next Tuesday is Valentine’s Day (and if you weren’t, here is your reminder). Next week also serves up inflation data for producers and consumers. This confluence of events presents a perfect opportunity for us to update our annual Valentine’s Day Index.

LPL Research’s Valentine’s Day Index tracks the cost of typical Valentine’s Day gift categories over time using data from the Consumer Price Index (CPI). Grouping items together into the Valentine’s Day Index (see chart) shows that Valentine’s  Day inflation increased by 0.9% in 2016, slower than the 15 year average of 1.95%. The rise was also slower than headline CPI (2.1%), and “core inflation” (2.2%), which removes the impacts of volatile food and energy prices.

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So what does this data mean for last minute shoppers?  According to John Canally, Chief Economic Strategist, “A night at home became cheaper during 2016, which has only happened two other times in the 15-year history of the Valentine’s Day Index. For those looking for a little more adventure, taking a trip still offers a reasonable value relative to other gift ideas. But those looking for a deal on jewelry may have missed their opportunity, as prices increased by 5.8% in 2016, breaking a streak of four consecutive years of falling prices.”

We will explore the Valentine’s Day Index and the impact of inflation on individual gift ideas in more detail in our upcoming Weekly Economic Commentary, due out on Monday, February 13.

 

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Past performance is no guarantee of future results. All indexes are unmanaged and cannot be invested into directly.

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.

The economic forecasts set forth in the presentation may not develop as predicted.

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

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