Frequently Asked Questions
Guidelines for Citing BEA Information | ID: 1069 | Created: Apr-23-2015
BEA’s estimates of GDP are seasonally adjusted to remove fluctuations that normally occur at about the same time and the same magnitude each year. Seasonal adjustment ensures that the remaining movements in GDP, or any other economic series, better reflect true patterns in economic activity. Examples of factors that may influence seasonal patterns include weather, holidays, and production schedules. (See "Why and how are seasonal adjustments made?")
Much of the data used by BEA to estimate GDP are seasonally adjusted by the source data agencies. For example, BEA uses seasonally-adjusted inventory and retail sales data from the U.S. Census Bureau and seasonally-adjusted consumer price indexes from the U.S. Bureau of Labor Statistics. BEA does seasonally adjust some data itself, such as Treasury data used to measure federal government spending. There are also instances where BEA cannot apply seasonal adjustment statistical techniques to its source data because the time series is too short to adequately capture seasonal trends.
BEA and its source data agencies regularly review and update their seasonal adjustment procedures to account for changes in seasonal patterns that emerge over time. Despite regular reviews and updates, changes in seasonal patterns can sometimes lead to ‘residual seasonality’—that is, the manifestation of seasonal patterns in data that have already been seasonally adjusted. There are several reasons that residual seasonality might arise:
- After the detailed, individual components of GDP are seasonally adjusted, BEA aggregates the seasonally adjusted components to obtain total GDP. In some cases, seasonal patterns may emerge in the aggregate estimates that were not apparent in the individual components.
- In some cases, the source data may be seasonally adjusted at monthly frequency, but in aggregating to quarterly frequency, seasonal patterns may emerge that were not apparent in the monthly data. To maintain consistency with the source data, BEA does not introduce different seasonal adjustments from those used in the monthly source data.
- In some cases, the current-dollar values and prices may be independently seasonally adjusted, then the values are deflated (divided by the price) to obtain estimates of real expenditures. Seasonal patterns sometimes emerge in the deflated estimates that were not apparent in the current-dollar values and prices.
BEA has developed a three-phased strategy to address residual seasonality in its GDP statistics. In phase 1, as part of the 2015 annual update of the national income and product accounts, BEA began to directly seasonally adjust a number of the Census Bureau quarterly services survey data used to estimate personal consumption expenditures for services; it began to seasonally adjust measures of federal defense spending on services and some equipment categories in response to seasonal patterns that have more recently emerged in the underlying source data; and it expanded seasonal adjustment of components of private inventory investment, net interest, and corporate profits as a result of having longer timespans on which to analyze seasonal trends.
While BEA cannot determine the precise impact of these seasonal adjustment improvements on GDP, it can compare average quarterly growth rates of the updated GDP estimates with those of the previously published estimates. The results show that for the quarters 2012Q1 to 2015Q1 (the period open to revision), the average rate of change of real GDP for first quarters was revised up 0.4 percentage point; for the other three quarters, the combined average rate of change was revised down 0.5 percentage point, thereby reducing the variations in average rates of change among the quarters. The largest difference was to the average rate of change for third quarters, which was revised down 1.4 percentage points, mainly reflecting the new seasonal adjustment of federal defense spending on services.
In phase 2, completed in 2016, BEA conducted a component-by-component review to identify the origins of residual seasonality. See “Residual Seasonality in GDP and GDI: Findings and Next Steps” on the BEA Web site. With this analysis, BEA, in partnership with its source data agencies, will develop improvements to mitigate residual seasonality.
In phase 3, BEA is currently developing not seasonally adjusted estimates for GDP and it major components. BEA plans to begin releasing these estimates with BEA’s seasonally-adjusted GDP estimates as part of the 2018 comprehensive update of the NIPAs.
Ask us a question...
Double check that email address! | We won't be able to contact you if it is incorrect.
Why the math question? | This helps stop malicious programs from using this site to generate SPAM email.
Please allow us some time | It could take up to two(2) business days for our Subject Matter Experts to follow up with an appropriate answer to your question(s). Your patience is very much appreciated.
Using the FAQ database
All FAQs are displayed when first visiting the page. They are ordered by most recent or recently updated and can be filtered by keyword search term, by category, and by manually selecting the page number buttons. To view any FAQ, click on the title to open the answer. Submitting a question is done by selecting the “Ask a question” tab along the top of the FAQ.
Selecting an FAQ
Clicking on the title of the FAQ will bring up the answer to the FAQ. Navigating back to the list of FAQs is done by selecting the tab “Back to FAQs”. A tab to ask a question specifically about this FAQ can be found at the top of the answer. Also, the FAQ id and date this FAQ was created or last modified is shown in the upper right hand corner.
Searching the FAQs
Enter a keyword search term and click the Search button to narrow FAQ selections. To return to all FAQs, click the Clear button or clear the keyword search field and click the Search button.
Filtering FAQs by category
Chose the category to filter by and click Apply button. This will display only the FAQs related to an assigned category. To return to all FAQs click the Clear button next to the search by keyword field or select ALL from the drop down menu and click Apply button.