The cost of living in the U.S. is rising at its fastest rate in 10 years, according to new data from the Labor Department.

The data, released Friday, revealed that consumer prices increased 2.9 percent in July from the year before, meaning Americans may be earning less than they did at this time last year.

The consumer price index, meanwhile, rose 0.2 percent last month, which analysts largely attributed to rising housing costs, CNBC reported. Annual inflation remained unchanged from June's pace at 2.9 percent.

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Energy, medical care and apparel costs dropped in July, while food prices ticked up.

"Rising rents remain the source of inflation. This is driven by shortages of housing in desirable markets," Dean Baker, senior economist at the Center for Economic and Policy Research, told CBS News.

"Unfortunately, the downward trend in housing construction means that these shortages are unlikely to be addressed on the supply side in the foreseeable future."

CBS reported that, when adjusted for inflation, average weekly earnings have dropped 0.1 percent in the past year.