what is a seasonally adjusted annual rate saar 
a seasonally adjusted annual rate saar is a rate adjustment used for economic or business data such as sales numbers or employment figures that attempts to remove seasonal variations in the data most data is affected by the time of the year and adjusting for the seasonality means that more accurate relative comparisons can be drawn between different time periods understanding a seasonally adjusted annual rate saar a seasonally adjusted annual rate saar seeks to remove seasonal impacts on a business to gain a deeper understanding of how the core aspects of a business perform throughout the year for example the ice cream industry tends to have a large level of seasonality as it sells more ice cream in the summer than in the winter and by using seasonally adjusted annual sales rates the sales in the summer can be accurately compared to the sales in the winter it is often used by analysts in the automobile industry to account for car sales seasonal adjustment is a statistical technique designed to even out periodic swings in statistics or movements in supply and demand related to changing seasons seasonal adjustments provide a clearer view of nonseasonal changes in data that would otherwise be overshadowed by the seasonal differences calculating a seasonally adjusted annual rate saar to calculate saar take the un adjusted monthly estimate divide by its seasonality factor and multiply by 12 analysts start with a full year of data and then they find the average number for each month or quarter the ratio between the actual number and the average determines the seasonal factor for that time period imagine a business earns 144 000 over a course of a year and 20 000 in june its average monthly revenue is 12 000 making june s seasonality factor as follows 2 0 0 0 0 1 2 0 0 0 1 6 7 20 000 12 000 1 67 20 000 12 000 1 67 the following year revenue during june climbs to 30 000 when divided by the seasonality factor the result is 17 964 and when multiplied by 12 that makes the saar 215 568 indicating growth alternatively saar can be calculated by taking the unadjusted quarterly estimate dividing by its seasonality factor and multiplying by four seasonally adjusted annual rates saars and data comparisonsa seasonally adjusted annual rate saar helps with data comparisons in a number of ways by adjusting the current month s sales for seasonality a business can calculate its current saar and compare it to the previous year s sales to determine if sales are increasing or decreasing similarly if a person wants to determine if real estate prices are increasing in their area they can look at the median prices in the current month or quarter adjust those numbers for seasonal variations and convert them into saars which can be compared to numbers for the previous years without making these adjustments first the analyst is not comparing apples with apples and as a result cannot make clear conclusions for example homes tend to sell more quickly and at higher prices in the summer than in the winter as a result if a person compares summer real estate sales prices to median prices from the previous year they may get a false impression that prices are rising however if they adjust the initial data based on the season they can see whether values are truly rising or just being momentarily increased by the warm weather seasonally adjusted annual rates saars vs non seasonally adjusted annual rateswhile seasonally adjusted sa rates try to remove the differences between seasonal variations non seasonally adjusted nsa rates do not take into account seasonal ebbs and flows concerning a set of information nsa data corresponds to the information s annual rate while sa data corresponds to its saar 