December was the third month in a row that the CPI was either negative or registered no change. It was flat in November and slid 0.3% in October.
Excluding the volatile food and energy components, the so-called core CPI increased 0.1%. The core CPI for all of 2001 was up only 1.6%, the smallest gain since a matching 1.6% rise in 1998, the department said. The core CPI rose 2.7% last year.
The report is expected to start rumors that another interest rate cut by the Federal Reserve could come later this month. The Fed is scheduled to meet January 29 and 30, and a cut of a quarter of a percentage point is being anticipated by analysts.
Prices last month were subdued across a range of categories, with energy costs leading the declines with a drop of 3.2%. The price of gasoline fell 6%.
