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 year 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 77^th 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 per 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.