Prices overall rose 1.7 percent last year, a marked slowdown from 2011, when prices rose 3 percent.
With the Consumer Price Index unchanged in December, the annual inflation rate is also a slowdown from November, when the 12-month CPI stood at 1.8 percent.
The CPI for the year, released Wednesday, came in slightly under expectations and safely below the U.S. Federal Reserve's target rate of 2 percent.
The price index for gasoline fell in December, dropping 2.3 percent -- the only major index to decline in the month. Food prices rose 0.2 percent in the month, and 1.8 percent over the past 12 months.
Core prices, the category that excludes food and energy items, rose 0.1 percent in December and 1.9 percent over the 12 months of 2012. The core price category is closely watched as it illustrates how much energy price changes have affected prices overall.
On an unadjusted basis, the price index for medical care services rose 3.7 percent in 2012, while heating oil prices rose 3.6 percent. Transportation costs rose 2.6 percent, while the cost of shelter rose 2.2 percent.
The price of new vehicles rose 1.6 percent, but the price of a used vehicle dropped 2 percent, the report said.