Aah, yes. But that would make sense!
Lumber manufacturers typically cut a tree into dimensional lumber very shortly after the tree is felled. Then, the newly-sawn (but soaking wet) lumber is kiln-dried until it reaches the desired moisture level. As lumber dries, it shrinks (as the moisture in the wood is reduced, the wood cells shrink, particularly across the grain). While the 8' length won't change much as the wood dries, the 2" width and 4" height (cross-section of the grain) will shrink considerably.
Because of this shrinkage, a typical 2x4 will usually measure out to around 1-1/2" x 3-1/2". These numbers can vary slightly, but modern lumber manufacturers are pretty adept at delivering consistently-sized supplies of dimensional lumber.
Hardwood and plywood sizing use completely different sizing conventions. In Understanding Wood Sizing, learn how hardwoods and plywood are sized, as well as a more thorough explanation of softwood sizing. Once you understand precisely how these materials are sized, you can design your woodworking projects appropriately.
(c) 2010 Chris Baylor licensed to About.com, Inc.
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