Seasonal Production Smoothing
Empirical tests of the production-smoothing hypothesis have yielded mixed results. This article looks for and finds evidence of seasonal production smoothing in 15 out of 25 manufacturing series and 8 out of 10 retail series, using detrended seasonally unadjusted data. The equivalent test using seasonally adjusted data were negative for all 35 series. The results suggest that seasonally adjusted data obscure short-term production smoothing.