Notes on Trading Day Adjustment Methodology and Weight Patterns

The shipments data in the M3 survey are adjusted for calendar month
variations, both length of month and number of trading days per month.  The
selection of these adjustment factors is based primarily on recognition of
patterns contained in the data using the regression and spectral analysis
capabilities of the X-11 seasonal adjustment software.

Factors are considered optimal when the daily weights assigned to the
industry eliminate or diminish the peaks in the spectral plots, which are
based on calendar frequencies, and lower the absolute value of the month-
to-month change in the residual irregular component (I) of the data series.
Several variations of the calculation and application of these weights
provided multiple versions of the irregular component values. The set of
weights selected were those which realized the lowest I value. Table F-1
in the printed report contains the daily weights used for each industry;
this table is not presented on the CD-ROM.  For trading day weights before
1987, see table F-1 of M3-1(90).

New orders data in this publication are implicitly trading day adjusted by
using the trading day adjusted shipments as input to their derivation. The
change in unfilled orders is not trading day adjusted.