Year-over-Year vs Month-over-Month

Year-over-year and month-over-month are two ways of expressing change in the same series, and they answer different questions. The year-over-year rate compares the period with the same period twelve months earlier, which removes seasonality by construction and describes where the level has ended up. The month-over-month rate compares consecutive periods, which is more timely and shows turning points earlier, but needs seasonal adjustment and is noisier. The two can point in opposite directions without either being wrong: a series can rise on the month while the annual rate falls, because the annual rate still contains eleven older months and the base a year ago. Reports usually print both, and which one a headline leads with is an editorial choice rather than a property of the data. Comparing a year-over-year figure from one source with a month-over-month figure from another is the error the pair most often produces.