Monday, May 3, 2021

Primer: Seasonal Adjustment And The CPI — Brian Romanchuk

Complaints about seasonal adjustment of economic data are another relatively common feature of internet chatter. The complaints are related to the discussion of the previous section {in the manuscript, which is not written yet}, which was the view that economists are messing with the data to promote some agenda. (Since these complaints are often levelled by those of a bearish temperament, the usual complaint is that economic growth is overstated, and/or inflation is understated by seasonal adjustment.)

NOTE: This is an extremely preliminary draft of a section from my inflation primer manuscript.

I do not label these complaints as a “myth” since I am unconvinced that anyone really believes that seasonal adjustment results in lower inflation rates. Rather, my feeling is that this is just exploiting the mistrust of economists and financial market commentators using a concept that is not often encountered....
Bond Economics
Primer: Seasonal Adjustment And The CPI
Brian Romanchuk

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