From the course: Economic Tips for Everyone

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SAAR

SAAR

From the course: Economic Tips for Everyone

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SAAR

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- Some economic data aren't just adjusted for seasons, but they're also annualized as something called a SAAR, which stands for a Seasonally Adjusted Annual Rate. Let me give you an example. In December, 2019, 1.5 million light vehicles, like cars and pickup trucks, were sold in the United States. But even the 1.5 million was the number of vehicles sold, the number quoted everywhere in the press was 16.8 million vehicles, that's the SAAR. It's more than just annualizing the data because 1.5 million vehicles for a month times 12 months equals 18 million vehicles, which is not 16.8 million. The 16.8 includes seasonal adjustments and is annualized. Sometimes people confuse the actual number and the SAAR, and I've seen very senior economists and business leaders make this kind of mistake. It can be quite embarrassing, as you can imagine, if I said that in December, 2019, 16.8 million vehicles were sold, that would imply 200…

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