Trends, Seasonality, and Cyclicity

A "trend" occurs when there is a long-term increase or decrease in the data. "Seasonality" occurs when there is a regular pattern in the time series related to the calendar. For example, a yearly pattern, a weekly pattern, or a daily pattern. Whenever the behavior of a time series is influenced in a periodic manner by the calendar, we call it seasonal. This should be distinguished from cyclic patterns. They occur when there are rises and falls that are not of a fixed period. For example, a business cycle might last 3 or 5, or 8 years between peaks or troughs. But a seasonal pattern is always of the same length. It is probably easiest to see what I mean with some examples.