The United States posted its lowest rate of inflation in more than 50 years in 2008, mainly because of a record plunge in gasoline prices.
The U.S. Department of Labor says consumer prices dropped 0.7 percent in December, and rose just 0.1 percent for the year.
The small uptick last year was much lower than the 4.1 percent gain in 2007, and the smallest year-over-year change since 1954, when consumer prices fell 0.7 percent.
For December, gas prices fell 17.2 percent, the largest monthly decline in records that go back 71 years. Overall energy prices also dropped a record 8.3 percent as home heating oil and natural gas prices declined.
Energy prices fell 21.3 percent for 2008, with gas costs tumbling 43.1 percent. Food prices were flat in December, but were up 5.8 percent for the year.
December marked the third consecutive month consumer prices dropped. Excluding volatile food and energy prices, core inflation was unchanged in December. For the year, it was up a moderate 1.8 percent, compared with a 2.4 percent increase in 2007.
Price pressures have eased as the recession intensifies. According to the U.S. Federal Reserve, production at the nation's factories, mines and utilities plunged 2 percent in December, capping the worst year for manufacturers since 2001.
Industrial production declined 1.8 percent in 2008, a sharp reversal from the 1.7 percent increase logged in 2007 and the worst showing since a 3.4 percent decline during the 2001 recession.
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