1 DATA PRESENTATION AND SEASONAL ADJUSTMENT - DATA AND METADATA PRESENTATION TERMINOLOGY - DATA PRESENTATION AND SEASONAL ADJUSTMENT - DATA AND METADATA PRESENTATION TERMINOLOGY - SHORT-TERM ECONOMIC STATISTICS EXPERT GROUP (STESEG) 28 – 30 JUNE 2004

2 Background Provision of metadata by national agencies and I/Os essential to enable users to assess relevance of data to their needs. Metadata in international context is essential to compare data and practices across countries. Terminology is a key element of metadata TERMINOLOGY

3 What is “terminology”? Refers to information providing meaning to terms used in a particular subject. In context of statistics this means information about concepts, variables, etc. TERMINOLOGY

4 What information is required? Concept label Concept definition (provides meaning) Source (seldom provided) Context (appropriate use, background, limitations) TERMINOLOGY

5 How is terminology developed? Stovepipe approach in national agencies and I/Os TERMINOLOGY Nat. accounts Prices Int. trade Labour market Exchange rates Concept A

6 TERMINOLOGY Nat. accounts Prices Int. trade Labour market Exchange rates Corporate glossaries Concept A Int. glossaries (OECD, Eurostat, MCV) Concept A

7 Recap on feedback Almost all agree on the central role of terminology and the need to provide clear standards for key data presentation concepts Some commented on the need to include clear definitions of concepts, especially growth rates in publications to inform users Some of the suggested definitions required rewording to make them clearer TERMINOLOGY - FEEDBACK ON RECOMMENDATIONS - TERMINOLOGY - FEEDBACK ON RECOMMENDATIONS -

8 Task Force Recommendations on Terminology AgreementModificatn required Year-on-year growth rate Annualised growth rate Linear approximation of the annualised figure Calendar or working day adjustment Moving average Preliminary / provisional Cycle (in a time series) OscillationDelete term Seasonal variation Time series Trend Trend-cycle Calendar effects component Irregular component Seasonally adjusted component or series

9 Year-on-year growth rates (changes) are rates expressed over the corresponding period (month or quarter) of the previous year. Such rates (changes) may be expressed as Qt/Qt-4- 1 or Mt/Mt-12-1 (Qt-Qt-4 or Mt-Mt-12) Year-on-year growth rates are rates of change expressed over the corresponding period of the previous year. Such rates may be expressed as Qt/Qt-4-1 or Mt/Mt-12-1 (Qt-Qt-4 or Mt- Mt-12) Month-on-month growth rates are rates of change expressed over the previous month. Such rates may be expressed as Mt/Mt-1-1 Quarter-on-quarter growth rates are rates of change expressed over the previous quarter. Such rates may be expressed as Qt/Qt-1-1 Annual growth rates (annual change) are rates of change expressed over the previous year. Such rates (changes) may be expressed as Yt/Yt-1-1 (Yt-Yt-1).

10 Annualised growth rates show the value that would be registered if the rate of change measured for a month or quarter were maintained for a full year, i.e.. [((Qt/Qt-1)4)-1], [((Mt/Mt-1)12)-1]. Such rates facilitate comparison of data for different time periods (e.g. years and quarters). The term “Annualised growth rate” is sometimes used to described the quarterly growth rate multiplied by four as opposed to compounding the quarterly growth rate. This is more appropriately referred to as “linear approximation of the annualised figure”. Annualised growth rates show the value that would be registered if the rate of change measured for a month or quarter were maintained for a full year. Such rates facilitate comparison of data for different time periods (e.g. years and quarters). The term “Annualised growth rate” is sometimes used to described the quarterly growth rate multiplied by four as opposed to compounding the quarterly growth rate. This is more appropriately referred to as “linear approximation of the annualised figure”.

11 Seasonal adjustment is a statistical technique to remove the effects of seasonal calendar influences operating on a series. Seasonal effects usually reflect the influence of the seasons themselves either directly or through institutional factors or social conventions. Other types of calendar variation occur as a result of influences such as the number of days in the calendar period, the accounting or recording practices adopted or the incidence of moving holidays (such as Easter). Seasonal adjustment is a statistical technique to remove the effects of seasonal calendar influences operating on a series. Seasonal effects usually reflect the influence of the seasons themselves either directly or through institutional factors or social conventions. Other types of calendar variation occur as a result of influences such as the number of days in the calendar period, the accounting or recording practices adopted or the incidence of moving holidays (such as Easter). No change

12 Calendar adjustment refers to the correction for calendar variations other than seasonal factors, e.g. number of days in the calendar period, the accounting or recording practices adopted or the incidence of moving holidays (such as Easter). The terms “calendar adjustment” and “working day adjustment” are often used interchangeably. However, there is a subtle difference between the two terms as working day adjustment is merely one type of calendar adjustment, along with an adjustment for say, new recording practices. Calendar adjustment refers to the correction for calendar variations other than seasonal factors, e.g. number of days in the calendar period, the accounting or recording practices adopted or the incidence of moving holidays (such as Easter). The terms “calendar adjustment” and “working day adjustment” (also known as “trading day adjustment”) are often used interchangeably. However, there is a subtle difference between the two terms as working day adjustment is merely one type of calendar adjustment, along with an adjustment for say, new recording practices. Do new recording practices addressed as part of calendar adjustment represent a substantive program change that should be addressed explicitly in their own right?

13 A cycle in a time series refers to smooth variations around the trend revealing a succession of phases of expansion and recession. The cyclical component can be viewed as those fluctuations in a time series which are longer than 1½ years but shorter than those attributed to the trend. A cycle in a time series refers to smooth variations around the trend revealing a succession of phases of expansion and contraction. The cyclical component can be viewed as those fluctuations in a time series which are longer than 1½ years but shorter than those attributed to the trend. Recession is a specialised term in business cycle analysis. Possible to have economic time series that have cycles that are not the same as business cycle in timing. Better to use the more general term “contraction”.

14 A time series is a set of ordered observations on a quantitative characteristic of an individual or collective phenomenon taken at different points of time. A time series is a set of time- ordered observations on a quantitative characteristic of an individual or collective phenomenon taken at different points of time. The trend is the component that represents the long-term variations in a time series. Trend can be viewed as those variations of very low frequencies The trend is the component that represents the long-term variations in a time series. In the frequency domain, trend can be viewed as those variations corresponding at very low frequencies

15 The calendar effects component is the component that represents the calendar variations in a time series, such as trading days, moving holidays and other calendar effects (such as leap year). The effects of the normal length of a month are assigned to the seasonal component. The calendar effects component is the component that represents the calendar variations in a time series, such as trading days, moving holidays and other calendar effects (such as leap year). The effects of the normal length of a month or quarter are assigned to the seasonal component. A seasonally adjusted component or series is the result of the extraction of the seasonal component and the calendar effects component from a time series. If neither seasonal nor calendar influences are present in the raw data, the seasonally series is given by the raw data. For series with no identifiable seasonal variations but with identifiable calendar variations, the seasonally adjusted series is given by the calendar adjusted series. A seasonally adjusted component or estimate is the result of the extraction of the seasonal component and the calendar effects component from a time series. If neither seasonal nor calendar influences are present in the raw data, the seasonally series is given by the raw data. For series with no identifiable seasonal variations but with identifiable calendar variations, the seasonally adjusted series is given by the calendar adjusted series.

16 The calendar effects component is the component that represents the calendar variations in a time series, such as trading days, moving holidays and other calendar effects (such as leap year). The effects of the normal length of a month are assigned to the seasonal component. The calendar effects component is the component that represents the calendar variations in a time series, such as trading days, moving holidays and other calendar effects (such as leap year). The effects of the normal length of a month or quarter are assigned to the seasonal component. A seasonally adjusted component or series is the result of the extraction of the seasonal component and the calendar effects component from a time series. If neither seasonal nor calendar influences are present in the raw data, the seasonally series is given by the raw data. For series with no identifiable seasonal variations but with identifiable calendar variations, the seasonally adjusted series is given by the calendar adjusted series. A seasonally adjusted component or estimate is the result of the extraction of the seasonal component and the calendar effects component from a time series. If neither seasonal nor calendar influences are present in the raw data, the seasonally series is given by the raw data. For series with no identifiable seasonal variations but with identifiable calendar variations, the seasonally adjusted series is given by the calendar adjusted series. “Estimate” highlights nature of series as an analytical product based on original data and which are subject to estimation errors Issue is with idea of calling a calendar adjusted series with no identifiable seasonal variation a “seasonally adjusted series”

17 The trend cycle is the component that represents the variations of low frequency in a time series, the high frequency variations having been filtered out. This component can be viewed as those variations with a period longer than a chosen threshold (usually 1½ years). In practice, statistical agencies estimate trend-cycle by filtering the seasonal and irregular component The trend cycle is the component that represents the variations of low frequency in a time series, the high frequency variations having been filtered out. This component can be viewed as those variations with a period longer than a chosen threshold (usually 1½ years). In practice, statistical agencies estimate trend-cycle by estimating and removing the seasonal and irregular component Is there some ambiguity in the current definition in not accounting for fluctuations in a time series of more than a year but less than 1½ ?

18 Future work SUMMARY OF WRITTEN COMMENTS Data and Metadata Reporting and Presentation Manual Data and Metadata Reporting and Presentation Manual Terminology Growth rates Seasonal adjustment Seasonal adjustment

19 Future work Final definitions will be incorporated into OECD Glossary of Statistical Terms – close relationship with CODED Terminology will also link into work of the SDMX partnership with Eurostat, IMF, ECB, BIS, World Bank, UNSD Will be incorporated as required into the SDMX Metadata Common Vocabulary (MCV) TERMINOLOGY