This
is variation in business and economic activity that results from changing
seasons. Seasonal variation is
reflected in changes in industrial production, agricultural production,
consumer buying, and overall price levels.
Consumer
needs vary by season. Antifreeze for
automobiles is needed in winter; Christmas gifts increase December retail
trades; new clothing sales show a spurt at Easter. These periodic fluctuations in consumer spending cause sales of
retailers to also show periodic fluctuations.
As wholesalers and manufacturers know this, production may only take
place when the sale of goods is assured.
The seasonal pattern is thus transferred to the purchase of materials
and supplies and the employment of labor.
Stated differently, a seasonal pattern in consumer buying habits causes
a number of seasonal variations in different phases of business activity.