Many economic series rise and fall at the same time every year. Retail spending jumps in December, unemployment rises when students finish school, building slows over the summer break. Seasonal adjustment estimates that regular pattern from past years and takes it out.
What is left is the underlying trend plus genuinely unusual movements. Statistical agencies revise their seasonal factors each year, which is one reason past figures change after they are first published.
Why it matters
Without adjustment, a December jump in spending would look like a boom and the January drop like a slump. Markets react to the adjusted figure because it is the one that says something about the economy rather than the calendar.
General information, not advice.