Seasonal adjustment of stocks and flows in the Financial and Wealth Accounts: towards an integrated approach

Articles and reports: 13-605-X201800154972


The principal motivation in producing estimates of seasonally adjusted household sector borrowing arose as a result of the observed seasonality present in the unadjusted credit market debt estimates. For example, Canadians tend to borrow more in the form of consumer credit in the fourth quarter, with the arrival of significant retail activity tied to the holidays, and then subsequently retrench in the first quarter. Moreover, mortgage borrowing has a tendency to slow down in the first quarter, but then pick up in the second and third quarters as winter recedes in many areas of Canada and resale activity picks up and families look to secure housing before the start of the upcoming school year. This phenomena of sub-annual cyclical patterns is not constrained to the household sector and can be seen in other areas such as government borrowing. Consequently, seasonal adjustment in this context enhances the interpretability of estimates that possess a strong cyclical component, eliminating the variation due to predictable and recurrent events, and provides data users, policy makers, and researchers with more accurate quarter-to-quarter movements that reveal the underlying trends in the data. While only household borrowing is the current sector of interest, seasonal adjustment will be eventually expanded to encompass other pertinent sectors in the Financial and Wealth Accounts.

Issue Number: 2018001
Author(s): Hoffarth, Matthew
FormatRelease dateMore information
PDFJanuary 25, 2019
HTMLDecember 14, 2018
  • Correction: February 12, 2019

    The appendix has been updated to include a correction to the formula for the calculation of seasonally adjusted OCA.