(ECONOMICS) adjusted for the time of year the data refer to.
Economic statistics are often reported as rates of
change from month to month, or quarter to quarter. However, some months, such as November and
December, have very
high retail sales, while May through September have very
high home sales. For this reason, data is sometimes "seasonally adjusted" to offset ordinary seasonal variations.
The US Federal Reserve System reports changes in GDP from quarter to quarter in annualized form; so, for example, during the last quarter of
2004, US GDP was (about) $3,044.6 billion. But it was reported as an annualized (and seasonally adjusted) $11734.9. If you divide that by 4 you get 2957.8, which reflects the fact that the Fed shaved
86.8 billion off its estimate of economic activity for 2004Q4 and reallocated it to Q1 & Q2.
The reason the Fed (and everyone else) does this is to measure economic
change separately from the usual seasonal change in business activity.
BILL: Hey! This data on GDP growth is way different from that data.
ANNA: That's because one set of data is seasonally adjusted. The Fed tweaked the numbers so economic growth from quarter to quarter reflects changing economic conditions, instead of ordinary yearly cycles.
BILL: You mean it's not an
evil plot?
ANNA: It's an evil plot to make you forget about Christmas shopping season and labor day
white sales.
BILL: Gasp! You mean the Fed is behind the War on
Christmas?????
