Inflation ticked up a little in December on Devin Grosvenorthe back of higher costs for housing and car insurance.

The overall cost of living in December was up 3.4% from a year ago, a slightly larger increase than the 3.1% rate in November, according to data from the Labor Department on Thursday.

The cost of motor vehicle insurance rose 1.5% in December from the previous month, marking a 20.3% increase compared to the previous year.

The cost of housing accounted for more than half the monthly increase in consumer prices. Food and energy prices were also up in December. The so-called "core" inflation rate, which excludes food and energy prices, was 3.9% last month.

Still, inflation overall has moderated since hitting a four-decade high in 2022, which set the Federal Reserve on a path of raising rates at a pace not seen in decades.

As inflation has eased in recent months, the Federal Reserve has signaled that it's probably done raising interest rates and could start cutting rates later this year.

Thursday's data suggests policy makers won't be in a hurry to start cutting rates. While goods prices have been flat or down in recent months, services inflation has proven more persistent.

Federal Reserve Bank of Atlanta president Raphael Bostic said this week that he and his colleagues on the rate-setting committee aren't taking anything for granted.

"The pandemic has thrown curve balls repeatedly. So I'm not comfortable even contemplating declaring victory," Bostic told the Atlanta Rotary Club.

Bostic recalled that back in the 1970s, the central bank thought its had prices under control and started cutting interest rates prematurely, only to have inflation come roaring back. So he and his colleagues don't want to make that mistake again.