Washington - Consumer prices rose last year at the slowest pace during a period of economic growth in modern U.S. history, a trend that is complicating the Federal Reserve's retreat from its stimulus campaign.

Prices rose just 0.8 percent last year and actually declined during the final two months of the year as the collapse of oil prices offset the higher cost of food and health care, the Bureau of Labor Statistics said Friday.

The slow pace of inflation means Americans are seeing less erosion in the value of their wages at a time when wages, too, are rising at an unusually slow pace. But it is also a warning sign that the economy remains in far from good health. And sluggish inflation can itself impede debt repayment and other economic adjustments.

For the Fed, the data is likely to sharpen questions about its plans to start raising its benchmark interest rate around the middle of the year.

The Fed aims to keep inflation at an annual pace of 2 percent, and the report on Friday is worse than it looks because the central bank actually uses a different measure of inflation, which tends to run about half a percentage point lower.

The Fed has not signaled any change in its plans.

A number of Fed officials have said in recent weeks that they expect inflation to recover as oil prices stop falling in the coming months.

"There will almost certainly be weak inflation readings early in the year influenced by energy prices," Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said in a speech this week. "But once that influence has passed, I expect inflation to move toward the Fed's targeted longer-term run rate."

The Fed is not alone in this view. Surveys of investors, economists and consumers also show a widespread expectation that inflation will rebound toward 2 percent.

And the Fed's resolve is strengthened by its estimation that falling oil prices are good for the economy. Even if inflation is reduced in the short term, they expect the resulting faster growth will lead to higher inflation over time.

The 0.4 percent decline in overall consumer prices in December was driven by the collapse of oil prices, the government said Friday. And some analysts expect that oil prices are largely done falling, so the effect will reverse over the next year.