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And finance Allah Shmoop What is seasonally adjusted data or

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S a D or sad Dr Elek Troy did That

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guy builds a new weather control advice as part of

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his evil plan for world domination He dumps fifty inches

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of snow on Phoenix We're not sure how world domination

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follows from a big snowstorm in Phoenix but well you

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know we're sure Dr Elek Troy knows what he's doing

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Dumping snow in the desert Well one kind of seasonal

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adjustment Not really the one we're talking about here but

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we'll get to that in a sec Captain Condor this

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guy flies from his secret layer the superhero lair high

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up in the Sierra Nevada mountains He captures Doctor Elec

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Troy destroys the weather device and saves the day Cut

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to you You're a researcher for the National Weather Service

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You're locked in a basement of the Washington D C

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Headquarters with no windows and no other people here surrounded

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only by the blinking lights of whether measurement equipment You

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don't have any cell phone reception or Internet access for

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you All you know is that your equipment shows fifty

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inches of snow in Phoenix You call your boss the

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Phoenix is the snowiest place in the nation called the

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press Get started on your game Changing academic paper on

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climate change Well wait a minute The fifty inches of

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snow doesn't indicate a really change in Phoenix is long

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term snowfall It's just a one time event in this

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case caused by a super villain you know as sometimes

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happens art lesson here you can't always trust raw data

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Numbers need contacts right The need for context leads us

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to relying on seasonally adjusted numbers So yeah sometimes raw

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data uncooked data It's very unhealthy to eat can be

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misleading To counteract this fact while some economic information gets

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reported on a seasonally adjusted basis that is the numbers

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get massaged to take into account the natural impact of

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the time of year For instance the unemployment rate well

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This stat gets reported on a seasonally adjusted basis Every

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year going into Christmas companies hire additional seasonal workers Package

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delivery People need extra drivers Amazon and other retailers need

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extra people to process orders Malls need elves to put

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crying kids onto the lapse of Santa's suicide Hotlines need

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extra people to take distress calls from you know family

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dinners on an unadjusted basis the unemployment rate would always

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decline Headed into the holiday season all these extra workers

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would lead to lower unemployment data every year But eventually

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Christmas comes and Christmas goes Everyone opens their presence and

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while stuffs everything into closets for potential re gifting next

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year Yeah Bob we're looking at you All the extra

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holiday workers are back on unemployment at least until spring

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when they can start lining up for summer gigs Yeah

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another season like maybe they get jobs as lifeguards or

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stand up comedians on cruise ships So going into the

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holidays every year would see a drop in unemployment with

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unjust ID data And then after the holidays there would

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always be a rise in the unemployment rate Well if

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the figure was reported this way it would be hard

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to read much of the movement during this time of

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year would be a result of seasonal factors The unadjusted

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statistics wouldn't mean muchas well any kind of economic indicator

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It would be hard to see what's really going on

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in the actual economy from these numbers Aside from the

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usual ticks up and down well is this year better

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than last year How does this year's stack up historically

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How's the labor market really doing Yeah it'd be hard

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to tell Much of the data would represent seasonal noise

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So the economist strip out the seasonal movements They make

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guesses based on what's happened before About what the data

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should do is a result of these seasonal factors They

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then take the seasonal moves out and only report the

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changes that don't have to do with seasonal workers Instead

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the numbers tracked the underlying health of the labor market

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like they're supposed to Well of course if you spend

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your winters as a mall Santa you're springs dressed like

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the Easter Bunny your summers as a snow cone sales

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person and you're autumns as a Jack o lantern carver

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wealth And you might never get counted in any seasonally 00:04:03.72 --> [endTime] adjusted numbers so you know good for you

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