Seasonally Adjusted Annual Rate - SAAR

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DEFINITION of 'Seasonally Adjusted Annual Rate - SAAR'

A rate adjustment used for economic or business data that attempts to remove the seasonal variations in the data. Most data will be affected by the time of the year. Adjusting for the seasonality in data means more accurate relative comparisons can be drawn from month to month all year.

INVESTOPEDIA EXPLAINS 'Seasonally Adjusted Annual Rate - SAAR'

The SAAR is calculated by dividing the unadjusted annual rate for the month by its seasonality factor and creating an adjusted annual rate for the month. These adjustments are more often used when economic data is released to the public. The ice cream industry tends to have a large level of seasonality as it will sell more ice cream in the summer than in the winter. By using seasonally adjusted sale rates, the sales in the summer can be accurately compared to the sales in the winter.

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