TY  - JOUR
AU  - Bryan,Michael F.
AU  - Cecchetti,Stephen G.
TI  - The Seasonality of Consumer Prices
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5173
PY  - 1995
Y2  - July 1995
UR  - http://www.nber.org/papers/w5173
L1  - http://www.nber.org/papers/w5173.pdf
N1  - Author contact info:
Stephen G. Cecchetti
Monetary and Economic Department
Bank for International Settlements
Centralbahnplatz 2
4002 Basel
SWITZERLAND
Tel: +41 61 280 8350
Fax: +41 61 280 9113
E-Mail: stephen.cecchetti@bis.org
AB  - In this paper, we reevaluate the evidence of seasonality in prices which we find to be substantially greater than previous research has indicated.  That is, seasonal price movements have become more prominent in the relatively stable inflation environment that has prevailed since 1982. One main conclusion is drawn from this analysis: The amount of seasonality in prices differs greatly by item, making it difficult to generalize about seasonal price movements.  A casual reading fails to reveal an easily identifiable origin of the seasonal variation of prices.  That is, seasonality in consumer prices is predominantly idiosyncratic in nature, a result that contrasts with studies demonstrating a common seasonal cycle in real economic variables. This finding has an important practical implication: Given the selective, disaggregated approach taken by the Bureau of Labor Statistics to adjust data seasonally, the existence of idiosyncratic seasonality increases the likelihood of allowing noise in the aggregate CPI at a seasonal frequency.  This argues in favor of seasonally adjusting the index after aggregation.
ER  -