Like a bright star in the night sky, the North Pole’s economy continues to shine, with few signs of the recession that has affected the United States. Indeed, December 2009 will apparently be a record-setting season for toy production and transport.
This year’s production levels at the North Pole continue to rise at an annualized rate of 3.2 percent, the 77th consecutive year of growth. Further impressive news from the North Pole is the continued rise in elf productivity. Estimates produced by the Center for Business and Economic Research find that the average elf can produce roughly three more toys a week in 2009 than 2008. In 2009, it required 14,617 elves to produce the approximately 76 million toys Santa delivered to children in the United States alone. Though fewer elves may be needed to produce the same number of toys, the increased demand has kept the unemployment rate for elves at 0.01 percent, unchanged since 1742.
There are other bright spots in the North Pole economy. Growth in the reindeer population has led to lower transportation costs for intermediate toy parts. This has resulted in a 4-percentage-point reduction in the Elf Pricing Index, a leading indicator of toy inflation. The increase in the reindeer population has led to regional food shortages for the flying animals. Several charities have asked that children place additional carrots and lettuce at key locations on Christmas Eve to reduce this temporary shortage of reindeer chow.
Since St. Nicholas will be leaving fewer lumps of coal in stockings this year, lower demand for coal is anticipated. The impact of this report did affect sales of Appalachian coal and there is expected to be a drop in production of roughly six tons. However, we expect this decline to be fully offset by increased demand for coal to provide eyes and smiles for the numerous snowmen we will see this season.
On the financial side, The Sugarplum 500 has increased roughly 13 points this month and leads all other markets in performance. This increased market value will lead to further productivity increases for later years. On Dec. 15, St. Nicholas released his Naughty/Nice projections for 2009. This year’s forecast is the most optimistic to date, with a 5.7-percent increase in nice children over last year. The actual number will not be known until Dec. 26, but St. Nicholas has developed an amazing forecast record—he knows who is naughty and nice.
The high productivity levels have had some spillover into other regional economies. Elves have been seen marketing goods in malls across the United States and Santa has made a record number of visits across the country. These efforts are seen as a result of the larger number of nice children. In an exclusive interview, Santa reported that, “while we continue to expand our marketing and outreach, with an increased focus on emerging media, the main focus and central message of our efforts remains unchanged from the first Christmas.”•
Hicks is director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at email@example.com.