The price of gifts in the holiday classic "The 12 Days of Christmas" - from seven swans a-swimming to five gold rings - is down an impressive 21.7% from a year ago.

That's the word from economists at Pittsburgh's PNC Bank Corp. - and it's the first significant decline since PNC began its Christmas price index in 1984.

What's more, the Federal Reserve should take note, said J. Patrick Bradley, director of economic and equity research at PNC Asset Management.

"We don't understand why the Fed has not lowered interests rates again," given the low inflationary outlook, Mr. Bradley said. The Fed cut rates modestly last July, but has not acted since then.

The Fed's monetary policy savants will meet one final time this year, on Dec. 19 - less than a week before Christmas. And if the central bank is looking for an argument to cut rates, it could do worse than to look at the Christmas index.

Although the index takes a decidedly playful approach to the topic of inflation, it's "reflective of fundamental economic forces," Mr. Bradley said.

The index decline was led by a 50% drop in the cost of seven swans a- swimming, due to increased supply. Once an endangered species in North America, trumpeter swans are now more numerous than in many years, he noted.

The cost of consumer goods in the song was flat or declining, and the cost of services either flat or higher, Mr. Bradley said.

Most items in the song were unchanged in price from 1994. For $15 consumers can still buy either one partridge or three French hens. The cost of two turtle doves was the same, at $50, as were the costs of four calling birds at $280 and six geese a-laying at $150.

Labor costs were flat. At the unchanged minimum wage of $4.25 per hour, eight maids a-milking still cost $34. The musicians' union said pipers will pipe and drummers drum for the same price as last year.

Meanwhile, the price of five gold rings fell to $325 from $450 a year earlier. And the price of a pear tree declined to $12.50 from $19.99 a year ago.

Only lords a-leaping cost more this year, perhaps because of their scarcity value.

Whatever inflation index the Fed governors are monitoring, several economists said the gift of lower rates could be under the tree this season.

"I think there is a fifty-fifty chance they will move," said James W. Coons, chief economist at Huntington National Bank, Columbus, Ohio.

More certain is Wayne M. Ayers, chief economist at Bank of Boston. Another rate cut is "all but baked into the cake," he said Friday, given the decline in market rates as inflation has abated.

"Next year we will be going into the sixth year of the current economic expansion," he said. "The Fed is going to want to take out some insurance that its soft landing doesn't run out of room."

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