Wood Size

The Lumber Industry has an "interesting" way of measuring wood.  When you buy a 2X4 it is (most likely) really 1.5 by 3.5.  This is because lumber is named by its rough–sawn "nominal" size, then dried and planed smooth (S4S – Surfaced 4 Sides) down to the smaller actual size.  Nominal is the size they call it in the store; Actual or "Dressed" is the real size of the wood.  The pattern is consistent: 2" nominal thickness always dresses to 1.5", widths up to 6" lose a half inch, and widths of 8" and up lose three quarters of an inch:

NominalActual (Dressed)
1 X 20.75" X 1.5"
1 X 40.75" X 3.5"
1 X 60.75" X 5.5"
1 X 80.75" X 7.25"
1 X 120.75" X 11.25"
2 X 41.5" X 3.5"
2 X 61.5" X 5.5"
2 X 81.5" X 7.25"
2 X 101.5" X 9.25"
2 X 121.5" X 11.25"
4 X 43.5" X 3.5"
6 X 65.5" X 5.5"

A couple of wrinkles on top of that:

1) Green (undried) lumber is allowed to be slightly larger – about 1/32" per face – and will shrink down to standard dressed size as it dries.  Wet pressure treated lumber from the big box store does the same thing, which is why your perfectly–fitted deck boards develop gaps a summer later.
2) The nominal sizes were only standardized in the 20th century.  If you are working on an OLD house, your studs are FATTER than modern lumber – mid–century 2X4s were commonly 1–5/8" X 3–5/8", and pre–WWII rough–sawn framing can be a genuine full 2" X 4".  This matters the day you try to sister a new joist to an old one or tie a new wall into an old one – measure the ACTUAL old wood, don't assume.
3) Because of lawsuits over the labeling, stores are required to make the actual size available – that is why the shelf tag at the big box store now shows both numbers.  The nominal name is legal, as long as the actual size is disclosed.

My experience with Treated Pine is as follows:

DressedNominal (what the store label says)
0.75" X 3.5""1 X 4 X (length)"
1" X 5.5""5/4 X 6 X (length) Treated Y/P Std/BTR Decking"
1.5" X 3.5""2 X 4 X (length) No 2 Prime PT SYP .40"
1.5" X 7.25""2 X 8 X (length) No. 2 Prime PT SYP .40"

That "5/4" (say "five quarter") decking board is your introduction to the OTHER measuring system – quarters of an inch of nominal thickness.  Hardwood is sold this way: 4/4 is nominally 1" thick, 5/4 is 1.25", 8/4 is 2", and hardwood usually comes in random widths rather than dimensioned sizes.  Hardwood is then priced by the board foot – a volume measure, one square foot one inch thick.  The quick formula: length (feet) X width (inches) X thickness (inches) / 12.  Here is a good explanation of how to measure board feet including the softwood–versus–hardwood rounding rules that trip people up.  Another list of the actual measurements of wood.

And one last gotcha: the same trick happened to sheet goods.  "3/4 inch" plywood is actually 23/32", and "1/2 inch" is 15/32".  If you cut a dado for a "3/4 inch" shelf with a true 3/4" bit, the shelf will rattle.  They sell undersized plywood router bits for exactly this reason.

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