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232 – From Ranch to Rain: Government Statistics on Agriculture and Weather
Weather Adjustment of Economic Data - Beyond Seasonal Adjustment
Steve Matthews
Statistics Canada
Zdenek Patak
Statistics Canada
Weather extremes are becoming more pronounced and more prolonged. It is conceivable that long stretches of unusually low or high temperatures, drought conditions, or extended rainfall, may impact the behaviour of both individuals and businesses. While seasonal adjustment removes repeating, equally spaced patterns along with calendar effects such as trading days and moving holidays, it does not remove the potential impact of atypical weather on economic time series. This paper explores this issue. Using X-12-ARIMA, weather related regressors are incorporated into seasonal adjustment to help explain unusual movements in various economic time series. Potential alternatives and ad hoc analyses are discussed.