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 detailed components of 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. These seasonally adjusted detailed components are then aggregated to derive seasonally adjusted GDP.

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. As part of this regular review, BEA evaluates the quarterly estimates for “residual seasonality”—that is, the manifestation of seasonal patterns in data that have already been seasonally adjusted. Should residual seasonality be identified in an aggregate series, BEA would review the seasonal adjustment applied to the underlying components and identify an appropriate mitigation strategy.[1]

The results of the 2018 comprehensive update of the National Income and Product Accounts released on July 27, 2018, reflect the outcome of a multiyear initiative to improve BEA’s approach to seasonal adjustment and address residual seasonality observed in previous estimates. As part of that improvement effort, we worked closely with our data partners to mitigate potential sources of residual seasonality, and we considered various tests for residual seasonality. Based on those tests, the updated series do not show signs of residual seasonality in real GDP or its major components over the full time span (1947-2017) or the most recent 15 years (2003-2017).

For more information, see the August 2018 Survey of Current Business “Seasonal Adjustment in the National Income and Product Accounts: Results from the 2018 Comprehensive Update.”


[1] See the July 2016 Survey of Current Business Article “Residual Seasonality in GDP and GDI: Findings and Next Steps” for a discussion of the potential causes of residual seasonality.