Annual growth in headline consumer prices remained stable in July from June, though core consumer prices topped market estimates, rising by their quickest pace in a decade.

The U.S. headline consumer price index grew 2.9% year over year in July, unchanged from the annual increase in June and in line with analyst expectations. On a monthly basis, consumer prices grew 0.2% in July, also in line with estimates, compared with a 0.1% increase in the prior month.

Prices for shelter rose 0.3% month over month, while the food index ticked up 0.1%. Energy prices declined 0.5%.

Core prices, which exclude food and energy, grew 2.4% year over year in July, exceeding market expectations for a 2.3% rise, compared with an annual growth of 2.3% in June. The July print was the largest 12-month growth since September 2008.

In monthly terms, core prices ticked up 0.2%.

The core personal consumption expenditure price index, the U.S. Federal Reserve's preferred inflation gauge, registered 1.9% year-over-year growth in June.

The Fed, which held its key rates steady last week, may raise rates two more times in 2018.