The largest influence in the drop was gasoline prices, which fell 1.8 percent on an annual basis in January, down from a gain of 1 percent in December.
Excluding gasoline prices, the consumer price index rose 0.6 percent in the 12 months to January, down from 0.8 percent in December.
"This slower increase was led by year-over-year price declines for clothing and smaller price gains for food purchased from stores," the data agency reported.
On an annual basis, food costs rose 1.1 percent in January, a drop from 1.5 percent in December, as food prices in stores fell, notably for meat, the report said.
Shelter costs rose 0.6 percent in the 12 months to January, while transportation prices fell 0.5 percent after rising 0.5 percent in December.