Year on year compares a metric with its reading in the same period a year before. The method reduces the distortion of seasonal patterns that show up when you only look at the prior month. Economists and companies use it for inflation, sales, profits, and many other series.
Key takeaways
- YoY growth can look strong simply because the base year was unusually weak.
- Always check whether the comparison uses the same definition and calendar span.
- Month on month figures answer a different question about short run momentum.
- Percent changes need the underlying levels too. A huge percentage on a tiny base can mislead.