GO
Loading...

Why The Government Says Gas Prices Were Lower In April

The government reported that gasoline prices in April were down 2 percent when "seasonally adjusted." How could this be, when we know prices went up at the pump?

Here's how it happened:

1) The actual increase in gasoline prices was 5.6%.

2) But the government statistics indicate that gasoline tends to rise by 7.6% in April.

3) But because they rose less than that--5.6%--gasoline was reported to be down 2 percent "seasonally adjusted"

It has to do with the phrase "seasonally adjusted." The government adjusts numbers to remove the impact of regular events that occur at the same time every year--like increases in gas prices in April, or the effect of cold weather on housing starts.

There is nothing nefarious about this--the question is whether the "adjustments" are fair and accurate.


Questions? Comments? tradertalk@cnbc.com

Featured

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

Wall Street