The market was already nervous as it waited for the government to release its August employment report on Friday. So news from the nation's major retailers that shoppers curtailed their spending last month due to higher gas and food prices came as a heavy blow.

Wal-Mart Stores Inc., the world's largest retailer, beat expectations because of its big discounts, but many teen retailers and luxury chains did poorly, a sign that consumers are spending mostly on essentials and putting discretionary buying on hold.

Meanwhile, the Labor Department said new applications for unemployment insurance rose by 15,000 last week from the previous week. That broadly missed expectations for a fourth-straight week of declines, heightening worries that the average American -- already feeling the effects of the weak housing market -- will have even less means to spend.

True Loves will have to pay a bit more for the five Gold Rings this year, as the jewelers who provide the prices for the rings report having no choice but to pass increased prices along to consumers as the price of gold continues to rise.

"The cost of the Gold Rings in this year's Christmas Price Index reflects the general trend of increasing commodity prices in the Consumer Price Index, including gold," said Dunigan. "In addition, increased fears about inflation and the value of the dollar may have led investors to turn to gold as a safer place to invest their money." The price of five gold rings now totals $395, a 21.5 percent increase over 2006 prices, but still nowhere close to 1989 prices, when the five Gold Rings hit an all-time high of $750.

Milkmaids Benefit from Minimum Wage Increase

As the only unskilled laborers in the Christmas Price Index, the eight Maids-a-Milking make minimum wage, and have not had a raise since 1997. This year, Congress increased their wages by 13.6 percent; bringing the cost of eight Maids-a-Milking for one hour of work to $46.80. The True Love will have to reach deeper into his pockets for the milkmaids in 2008 and 2009, as well - Congress has already approved continued increases to the minimum wage for the next two years.

The cost of most performers in the index - the Drummers Drumming, Pipers Piping and Lords-a-Leaping - rose a modest 3 to 4 percent, due primarily to an increase in the performers' compensation, reflecting the current labor market in which the unemployment rate is still below 5 percent. Only the price for the Ladies Dancing was unchanged this year, according to Philadanco, a modern dance company in Philadelphia.

Food Prices Are For the Birds

Among the feathered friends in the Christmas Price Index, the most notable increase was a 20 percent change in the price for six Geese-a-Laying, provided by the National Aviary.

"For True Loves planning to serve a Christmas goose - or six - for a holiday meal, this item will be a bit more expensive," said Dunigan. "Food prices have increased over the last year, which has not impacted birds like Turtle Doves and Partridges, but has had an impact on birds traditionally served as food, like Geese."

Most of the other bird prices in the index remained even with last year's rates, thanks to steady supply and demand for Partridges, Turtle Doves, French Hens and Swans. Aside from the Geese-a-Laying, only the Calling Birds will cost more in 2007. PNC prices the Calling Birds from a national pet store chain, and prices for Calling Birds (or canaries) were up 25 percent this year, thanks to higher demand and increased shipping costs for retailers. 2007: Most Expensive Christmas Ever

For those True Loves who prefer to do their shopping online, PNC Wealth Management calculates the cost of The Twelve Days of Christmas gifts purchased on the Web. This year, the trends identified in the traditional index are repeated in the Internet version, with overall growth of 3 percent, very close to the 3.1 percent in the traditional index. This year, the Internet index is very similar to the traditional index. For example, the price of gold is significantly higher online in 2007 compared to 2006. And, as with the traditional Christmas Price Index, bird prices are mostly even with or, in some cases, down a bit from 2006 levels. In general, Internet prices are higher than their non-Internet counterparts because of shipping costs.

As part of its annual tradition, PNC Wealth Management also tabulates the "True Cost of Christmas," which is the total cost of items gifted by a True Love who repeats all of the song's verses. This holiday season, very generous True Loves will pay more than ever before - $78,100 - for all 364 items, up from $75,122 in 2006. This 4 percent increase is about even with last year's 3.5 percent increase.

In the fashion and apparel categories, expect to see evening wear and diamonds driving sales. In addition, tailored denim products - across men's, women's and children's wear - will be a hot item. Women's boots also will help drive sales this holiday season, with a focus on three-quarter length boots rather than knee length.

Interestingly, fashion will be getting more high tech this season.

"Technology is having an impact on fashion," said Dan Butler, VP of retail operations and merchandising at the National Retail Federation. "Whether its sweaters or vests designed to hold handheld accessories and iPods, or handbags, which are designed for these devices, we are going to see a lot more of these kinds of products this season."

IPod and cell phone accessories will be popular tickets this year, including a new breed of accessories designed to hold these items in the home. Expect to see more widescreen televisions under the tree this year, along with widescreen computer monitors, as the prices of these products have come down.

Whole Foods Market Inc., the largest U.S. natural-foods grocer, said it agreed to buy rival Wild Oats Markets Inc. for $565 million after reporting its first profit decline in five quarters.

Whole Foods will pay $18.50 in cash for each share of Boulder, Colorado-based Wild Oats, 18 percent higher than its closing price today. First-quarter net income fell 7.8 percent to $53.8 million, or 38 cents a share, Austin, Texas-based Whole Foods said today. Earnings missed analysts' estimates.

Buying Wild Oats will help counter slowing growth at Whole Foods, which faced competition from Safeway Inc., Trader Joe's and other grocery stores selling organic and prepared food. First-quarter sales at Whole Foods stores open at least a year rose 7 percent, down from 13 percent a year earlier.

"Whole Foods had won the size game and was able to call the shots," said Matt Patsky, portfolio manager at Boston-based Winslow Management Co. which overseas $350 million, including Whole Foods shares.

Wild Oats posted a loss in two of the past five years and its sales climbed 26 percent over the period to $1.12 billion, while Whole Foods doubled profit and sales.