Base Effect

Base effect is how much inflation levels have changed from a year ago. It's measured a year back from whatever month you're in (so not right to the day, just the month).

Inflation can be measured for other purposes as month-to-month though. If inflation levels are consistent, and nothing major happens to the market, the levels stay relatively similar from this year May to last year May (or whatever month strikes your fancy). If they vary greatly, that triggers the analyst to look closer. What happened in one of the years that is different? Was there, for instance, a shortage in gasoline that altered the price? A stock market "crash"? If it happened the previous year, the analyst can measure the recovery to this year. Because of the variables from year to year, this isn't the most accurate measurement, but it does at least cue the analyst to look closer.