# What is the difference between Quarterly and Annual reporting of govt. data?

## Question:

When reviewing reporting data from the Federal Reserve could you please help me understand the difference between Quarterly and Annual reporting and the difference between Sum and End of Period? (Frequency/Aggregation Method)

My lay understanding of Quarterly reporting was that this number represents, in the example of expenses, the expenses made by the federal or state and local governments over the previous 3-month period.

My understanding of Annual reporting was that this number represents, in the example of expenses, the expenses made by the federal or state and local governments over the previous 12-month period.

Where I thought I may be misunderstanding.

The Federal budget for 2023 was roughly \$6.1 Trillion dollars in outlays which roughly matches the Federal Reserve St. Louis data regarding federal government expenses 2023 for Annual/End of Period. However, if changing this to Annual/Sum this number leaps to \$25.53 Trillion. This cannot be correct as the Federal budget is only \$6.1 trillion not \$25.53 trillion dollars. This leads me to believe that my lay understanding of quarterly reporting is incorrect.

I have other questions, but this is the main thing I am stuck on at the moment.

Your understanding of Quarterly and Annual data is correct. For the Federal Reserve data (Federal Government: Current Expenditures (FGEXPND)) you are referring to notice that the data are quoted in "Billions of Dollars, Seasonally Adjusted Annual Rate".  This means that current expenditures are quoted in billions of dollars after removing the effect of predictable seasonal patterns and then data are annualized. Quarterly data are often presented in annualized form to reflect what the annual data would be if the quarterly rate continues for the full year.

Therefore, in your example the appropriate aggregation method is the "average" option. Why, you ask. Consider this:

The annualized data for Q12023 is \$ 6324.78 billion. This means that if current expenditures continue to increase at the Q12023 rate, the annual current expenditure would be \$ 6324.78 billion. The interpretation for the data for Q22023, Q42023, Q42023 is similar. Each data point represents an annual number. Therefore, using the "Sum" aggregation option will add the already annualized data giving you \$25.53 trillion, thereby overestimating current annual expenditure.