Home Labor Market Information What is a Seasonal Adjustment?

What is a Seasonal Adjustment?

"Seasonally adjusted" is a process whereby normal seasonal changes are removed or discounted from monthly data. Taking employment as an example, we know that some industries show large fluctuations in employment because they need more or less employees at certain times of the year. Ski resorts, for instance, hire far more employees in the winter months to accommodate snow skiing season. Employment in education fluctuates greatly at the beginning and the ending of the school year. Retail businesses typically hire more employees during the holiday season late in the year.

By seasonally adjusting employment, statisticians attempt to adjust the influences of predictable seasonal patterns to reveal how employment and unemployment change from month to month. The adjustment consists of either raising or lowering the actual employment reported by a certain percentage to reflect the normal seasonal increases or decreases that historically occur.

This explains why you often see two sets of employment figures, seasonally adjusted and non-seasonally adjusted.

Typically, the monthly employment and unemployment numbers reported in the news are seasonally adjusted data. Seasonally adjusted data are useful when comparing several months of data. Annual average estimates are calculated from the not seasonally adjusted data series.