Consumers paid modestly higher prices for gas, food and shelter in 2012, but overall inflation was more subdued than in 2011.
The Consumer Price Index, the government's key measure of inflation, was up 1.7% last year, tamer than in 2011, when prices rose 3%.
For the year, energy prices were up only 0.5%, compared to a whopping 6.6% increase in 2011.
Food prices rose 1.8%, slower than in 2011 when they rose 4.7%.
Both food and gas can be volatile, so economists often prefer to strip out those categories when monitoring inflation. This measure, called core CPI was up 1.9% in 2012, also showing a deceleration from a 2.2% increase in 2011.
In December alone, prices were unchanged as lower gas prices balanced out small increases on food and shelter.