“While US inflation coming in line with expectations means no nasty surprises for markets, the real quandary for the Federal Reserve is what do they do with rates from this point,” said Lindsay James, investment strategist at Quilter Investors.
Price increases in recent years have caused significant public concern, helping Trump to victory in the presidential election this month.
Over the last 12 months, housing costs, including rents, rose 4.9%, the Labor Department said. In part because housing is heavily weighted in the US price index, that accounted for the majority of inflation over the past year.
Other big contributors included car insurance, which is up more than 14% from a year ago, as well as medical care and education, according to the report.
Prices for petrol, which have dropped 12% over the last year, mark the major exception to the overall rise in living costs.