WASHINGTON — Higher rents and food prices boosted overall inflation in December, a sign that the Federal Reserve’s drive to slow inflation to its 2 percent target will likely be a bumpy one even as the central bank faces pressure to cut interest rates.

Thursday’s report from the Labor Department showed that overall prices rose 0.3 percent from November and 3.4 percent from the year earlier. Those gains exceeded the previous 0.1 percent monthly rise and the 3.1 percent annual inflation in November.

Excluding volatile food and energy costs, though, so-called core prices rose just 0.3 percent month over month, unchanged from November’s increase. Core prices were up 3.9 percent from a year earlier, down a tick from November’s 4 percent year-over year gain. 

Economists pay particular attention to core prices because, by excluding costs that typically jump around from month to month, they are seen as a better guide to the likely path of inflation.

Overall inflation has cooled more or less steadily since hitting a four-decade high of 9.1 percent in mid-2022. Inflation’s persistence, though, helps explain why, despite steady economic growth, low unemployment and healthy hiring, polls show many Americans are dissatisfied with the economy — a likely key issue in the 2024 elections.

The Federal Reserve, which began aggressively raising interest rates in March 2022 to try to slow the pace of price increases, wants to reduce year-over-year inflation to its 2 percent target level.

Bloomberg’s chief American economist, Anna Wong, predicted earlier this week that the central bank “has reached the end of its hiking cycle,” and that by March, with  “core inflation looking to be on track to approach Fed’s 2 percent target — by some key metrics,”  the Fed can be expected to make its first interest rate cut of the year.

“Basically, the war on inflation is more or less over, and we won,” economist Paul Krugman contended in the New York Times on Monday.  He added that there “are very good reasons” for the Fed “to start reversing the sharp rate hikes it carried out beginning in March 2022.”

Mr. Krugman conceded, though, that cutting interest rates could expose the Fed to criticism that the central bank was trying to assist President Biden’s re-election effort and “that politics, not economics,” would be “driving the coming rate cuts.”

Overall, the progress against inflation has been significant. A year ago, the 12-month rise in the consumer price index was 6.5 percent — far below a four-decade high of 9.1 percent in June 2022 but still painfully high. 

And wage gains have outpaced inflation in recent months, meaning that Americans’ average after-inflation take-home pay is up.

There are solid reasons for optimism that inflationary pressure will continue to recede in the coming months.

The Federal Reserve Bank of New York reported this week, for example, that consumers now expect inflation to come in at just 3 percent over the next year, the lowest one-year forecast since January 2021. 

That’s important because consumer expectations are themselves considered a telltale sign of future inflation: When Americans fear that prices will keep accelerating, they will typically rush to buy things sooner rather than later. 

That surge of spending tends to fuel more inflation, but that nasty cycle does not appear to be happening.

And when Fed officials discussed the inflation outlook at their most recent meeting last month, they noted some hopeful signs: An end to the supply chain backlogs that had caused parts shortages and inflation pressures and a drop in rent costs, which is beginning to spread through the economy.

Many economists have suggested that slowing inflation to around 3 percent from 9 percent was easier to achieve than reaching the Fed’s 2 percent target could prove to be.

The December jobs report that was issued last week contained some cautionary news for the Fed: Average hourly wages rose 4.1 percent from a year earlier, up slightly from 4 percent in November. 

And 676,000 people left the workforce, reducing the proportion of adults who either have a job or are looking for one to 62.5 percent, the lowest level since February.

That is potentially concerning because when fewer people look for work, employers usually find it harder to fill jobs. 

As a result, they may feel compelled to sharply raise pay to attract job-seekers — and then pass on their higher labor costs to their customers through higher prices. That’s a cycle that can perpetuate inflation.