The seasonally adjusted annual rate (SAAR) is a rate that is adjusted to take into account typical seasonal fluctuations in data and is expressed as an annual total. SAARs are used for data affected by seasonality, when it could be misleading to directly compare different times of the year.
SAARs are often used for car sales. Other examples of when SAARs could be used are occupancy rates at ski resorts, which are higher in the winter, or sales of ice cream, which are higher in the summer. Sales between seasons can be more easily compared using seasonally adjusted rates. The SAAR is calculated by dividing the unadjusted month rate for the month by its seasonality factor and multiplying by 12 to create an annual rate. (Quarterly data would be multiplied by 4.)
References
- "Light Weight Vehicle Sales: Autos and Light Trucks". Federal Reserve Bank of St. Louis. 9 November 2016. Retrieved 15 November 2016.
- "Federal Reserve Seasonal Factors for Domestic Auto and Truck Production: formulas". Federal Reserve. 1 April 2016. Retrieved 15 November 2016.
External links
- Investopedia's entry on the SAAR
- Moody's Analytics Buffet: SAAR
- What Does Seasonally Adjusted Annual Rate (SAAR) Mean?
- Seasonal adjustment, Duke University
See also
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