What are trading day effects and trading day adjustments?
Monthly (or quarterly) time series that are totals of daily activities can be influenced by each calendar month's weekday composition. This influence is revealed when monthly values consistently depend on which days of the week occur five times in the month. Recurring effects associated with individual days of the week are called trading-day effects.
Trading-day effects can make it difficult to compare series values or to compare movements in one series with movements in another. For this reason, when estimates of trading-day effects are statistically significant, we adjust them out of the series. The removal of such estimates is called trading day adjustment.
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