This post initially misidentified July core inflation

Today, the Bureau of Labor Statistics released the latest Consumer Product Index (CPI) numbers, giving the most recent estimate of the rate of inflation. The short version: There isn't any. The inflation rate for all products grew by a whopping 0.0 percent. When you exclude food and energy prices, as economists frequently do to get the "core" rate of inflation, inflation in July was just 0.1 percent. Indeed, inflation for the past 12 months was only 1.4 percent, well below the Federal Reserve's target of 2 percent, and core inflation was only 2.1 percent:

As you can see above, total inflation has been below the Fed's target for a few months now, and both total and core inflation were below the target for most of 2009 and much of 2010. But if the Fed has undershot its inflation target, it has barely been addressing its unemployment mandate at all:

Some, such as the University of Michigan's Betsey Stevenson and Penn's Justin Wolfers, have argued that continuing to undershoot its own inflation and employment targets is undermining the Fed's credibility while failing to spur an adequate recovery from the recession.