Seasonal adjustment removes the effects of events that follow a more or less regular pattern each year. These adjustments make nonseasonal patterns easier to spot. Over the course of a year, events that follow a more or less regular pattern each year affect the rate of wage and benefit change. For example, wage and benefit adjustments in State and local governments, especially schools, are concentrated in the June-September period. Increases in the Social Security tax rate and earnings ceiling, when they occur, always take effect in the December-March period. Wage and benefit adjustments in construction typically occur in the summer when there is the most activity in the industry.
Adjusting for these seasonal patterns makes it easier to observe the cyclical and other nonseasonal movements in the series. In evaluating changes in a seasonally adjusted series, it is important to note that seasonal adjustment is merely an approximation based on past experience. Seasonally adjusted estimates have a broader margin of possible error than the original data on which they are based, because they are subject not only to sampling and other errors but also are affected by the uncertainties of the seasonal adjustment process itself.
ECI seasonal factors and historical listing
ECI series are seasonally adjusted using either the direct or indirect seasonal adjustment method. Indexes at comparatively low levels of aggregation, such as the construction wage index, are adjusted by the direct method; that is, dividing the index by its seasonal factor. Seasonal factors are derived using the X-12 ARIMA seasonal adjustment program developed by the U.S. Census Bureau. Most higher level aggregate indexes, such as civilian or private industry workers wages or benefits, are seasonally adjusted by the indirect method, a weighted sum of seasonally adjusted component indexes, where the weights sum to 1.0. Industry and occupational series that are seasonally adjusted by the indirect method are based on industry and occupational components, respectively. Beginning with the December 1990 ECI release, seasonally adjusted data were made available for selected ECI series. The seasonal factors which are revised once a year are provided above. Also available is the historical listing, which contains revised seasonally adjusted indexes and 3-month percent changes for the last five years.
Last Modified Date: April 30, 2008