That long-run record may explain why survey measures of expected inflation have been remarkably stable over the last several years, despite the turmoil of the Great Recession and widespread media speculation about deflation or inflation. At short time horizons, inflation can be volatile, however, and over the last year inflation has only averaged 1.2 percent.
As you probably suspect, much of that weakness reflects the decline in energy prices. Prior to the fall in energy prices, the 12-month PCE inflation rate was 1.7 percent – not that far from 2 percent. To get a sense of the near-term direction of inflation, many economists look at core price indices, which exclude the volatile food and energy categories.