A year-on-year change compares this period with the same period last year: September's prices against last September's. Because both periods sit at the same point in the calendar, seasonal effects such as Christmas spending or winter energy bills largely cancel out.
A month-on-month or quarter-on-quarter change compares with the period immediately before. It reacts faster, so it shows a turn in the trend earlier, but it is noisier. Statisticians publish seasonally adjusted figures so that these short comparisons are still meaningful.
US agencies often annualise short-period changes: a 0.5% rise in a quarter is reported as about 2.0% annualised, the pace it would reach if kept up for a year. Australian figures are usually not annualised. Check the unit before comparing the two countries.
Why it matters
Year-on-year inflation is what central banks target, but they watch monthly and quarterly changes to see where the annual figure is heading. A year-on-year rate can keep rising for months after the monthly pace has already slowed, simply because high months from the past year are still in the window.
On FinVolio
Each indicator's unit says which comparison it uses, and tables mark it as y/y, m/m or q/q.
General information, not advice.