The core CPI, which strips out volatile food and energy prices, was also cooler than anticipated, increasing 2.6% over 12 months. It was expected to have risen by 3%.

The consumer price index rose at a 2.7% annualized rate last month, a delayed report from the Bureau of Labor Statistics showed. Economists polled by Dow Jones expected the CPI to have risen 3.1%.

Consumer prices rose less than expected in November, giving investors hope that inflationary pressures may be cooling enough for U.S. monetary policy to be eased more than Wall Street anticipates.

The monthly increases also were less than expected, with both the all-items and core CPI gains at 0.2%, compared to estimates of 0.3%.

This is the first report that encompasses the period during which the U.S. government was shut down. The stoppage disrupted the data collection process in that time. It also led to the cancellation of the October CPI release. This data was originally expected to be released Dec. 10.

Because the October CPI was canceled, Thursday's report did not have all the usual data points of a typical CPI release. The BLS said it was unable to retroactively collect the October data, but did use some "nonsurvey data sources" to make the index calculations.

On a 12-month basis, food prices rose 2.6% and energy was up 4.2%. Shelter costs, which make up about one-third of the weighting in the index, rose 3%, indicating progress towards the Fed's 2% overall inflation goal. Shelter had been a major contributors towards elevated inflation readings.

Economists may be hesitant to read too much into this report as the start of a downward trend in inflation because of the lack of October comparison data in the release.

Still, investors parsed through the report as they look for clues on future monetary policy moves from the Federal Reserve. The Fed earlier this month cut its benchmark overnight rate by 25 basis points for the third time in a row.

"A tame CPI will reinforce the Fed is focused on protecting the employment market. And that means a Fed 'put' is now in place for the economy," Tom Lee, head of research at Fundstrat, said in a note ahead of Thursday's release. "In other words, if the Fed is concerned about downside risks to the economy, the Fed 'put' comes into play and this would be for stocks to rise."

Odds for a January rate cut remained low, but traders began pricing in a higher chance of a March reduction. The CME Group's FedWatch tool showed a 58.3% probability of a rate cut for the month, up from around 53.9% on Wednesday.

Stock futures jumped following the release. S&P 500 futures were up about 0.5% as of 8:39 a.m. ET. A gain would snap a four-day losing streak for the benchmark index. Treasury yields slipped, with the 10-year note yield last trading around 4.11%.

— CNBC's Sean Conlon contributed reporting.