A key measure of U.S. consumer prices remained subdued in November, bolstering widespread expectations Federal Reserve policy makers will hold the line on interest rates.

The core consumer price index, which excludes volatile food and energy costs, rose 0.2 per cent for a second month, and 2.3 per cent from a year earlier, a Labor Department report showed Wednesday. Those figures matched the median estimates in a Bloomberg survey of economists. The broader CPI increased 0.3 per cent, and 2.1 per cent from November 2018.

The contained pace of inflation supports forecasts that the Fed will hold interest rates steady when policy makers convene this afternoon. Central bankers have cut borrowing costs three times this year and signaled they will remain on hold for the near future or until the economic outlook shows a material change.

The Labor Department’s CPI tends to run higher than the Commerce Department’s personal consumption expenditures price index, which the Fed officially targets. The core PCE index that policy makers watch for a better read on underlying price trends has softened in recent months and has held below the two per cent objective all year.

What’s more, consumers expect minimal price pressures over the longer term. The University of Michigan's measure long-term inflation expectations matched a record low in the preliminary December survey.

The Labor Department’s CPI report showed energy and shelter were the primary factors boosting November inflation. Energy prices rose 0.8 per cent from the prior month on the back of higher gasoline and fuel oil costs.

Shelter costs, which make up about a third of total CPI, accelerated, rising 0.3 per cent last month after a 0.1 per cent gain in October. The price of lodging rose 1.1 per cent after slumping 3.8 per cent a month earlier.

Owners-equivalent rent, one of the categories that tracks rental prices, increased 0.2 per cent.

Food prices edged up 0.1 per cent, while the cost of new vehicles declined for a fifth consecutive month.

Apparel prices, which tend to be volatile on monthly basis, crept up 0.1 per cent in November after declining the previous two months.

A separate Labor Department report Wednesday showed average hourly earnings, adjusted for price changes, rose 1.1 per cent in November from a year earlier after a 1.4 per cent in the 12 months through October. Higher inflation erodes wage gains.

Economists surveyed by Bloomberg had forecast the core CPI to rise 0.2 per cent from the prior month and 2.3 per cent from a year earlier, with the broader index seen rising 0.2 per cent and two per cent on a yearly basis.