WASHINGTON (AP) — Inflation showed a slight moderation in December as prices for gasoline and used cars declined, signaling a gradual easing of persistent cost pressures, the Labor Department reported Wednesday. Consumer prices increased by 0.3% in December compared to the previous month.

The Consumer Price Index (CPI), a widely-used measure of inflation, reflects the average change over time in the prices paid by urban consumers for a basket of consumer goods and services. While the 0.3% increase indicates a slowdown from previous months, inflation remains above the Federal Reserve’s target rate.

The decrease in gasoline prices was a significant factor in the overall moderation. Used car and truck prices also contributed to the easing, reflecting a stabilization in that market after a period of rapid increases. These declines suggest that some of the supply chain bottlenecks and increased demand that fueled inflation earlier in the year are beginning to resolve.

However, core inflation, which excludes volatile food and energy prices, remained elevated, indicating that underlying inflationary pressures persist. This suggests that the Federal Reserve may need to continue its efforts to combat inflation, potentially through further interest rate hikes, although the recent data could influence the pace and magnitude of those actions.

The Federal Reserve has been aggressively raising interest rates throughout 2022 and 2023 in an attempt to cool down the economy and bring inflation under control. The central bank's target inflation rate is 2%. The latest figures provide some hope that these measures are beginning to have the desired effect, but economists caution that it is still too early to declare victory over inflation.

Looking ahead, economists will be closely monitoring upcoming inflation data to assess the trajectory of prices and the potential impact on the Federal Reserve's monetary policy decisions. The ongoing conflict in Ukraine, global supply chain disruptions, and labor market dynamics will continue to be key factors influencing the inflation outlook.