Assessing Residual Seasonality in the U.S. National Income and Product Accounts Aggregates

Abstract

Abstract There is an ongoing debate on whether residual seasonality is present in the estimates of real Gross Domestic Product (GDP) in U.S. national accounts and whether it explains the slower quarter-one GDP growth rate in the recent years. This article aims to bring clarity to this topic by (1) summarizing the techniques and methodologies used in these studies; (2) arguing for a sound methodological framework for evaluating claims of residual seasonality; and (3) proposing three diagnostic tests for detecting residual seasonality, applying them to different vintages and different sample spans of data on real GDP and its major components from the U.S. national accounts and making comparisons with results from the previous studies.