Official figures show that US consumer prices were flat in November as Americans paid less for cars and petrol, while the annual inflation rate fell for the second straight month.
The figures could give the Federal Reserve more room to help a still-weak US economy.
The Labor Department said the Consumer Price Index was unchanged last month. Economists had expected an increase of 0.1%. Prices rose 3.4% in the 12 months to November, well off a three-year high of 3.9% in September.
Economists and investors see inflation cooling over the coming months, which could help convince the Federal Reserve to do more to bring down the country's 8.6% unemployment rate.
Earlier in the week, the Fed warned that turmoil in Europe presents a big risk to the US economy, and policymakers left the door open to possible further steps to boost growth.
Fed officials are divided among those who think high unemployment and sluggish growth require more action and those who view the central bank's already-aggressive efforts as bordering dangerously on an invitation to inflation.
During November, food prices rose 0.1%, while petrol fell 2.4%. Outside food and energy, prices climbed 0.2% in November. In a sign that could give pause to policymakers still concerned about inflation, core prices rose 2.2% in the 12 months to November, up from 2.1% in October.
