WASHINGTON — Consumer prices were flat in July as energy costs retreated following a big surge in June. Over the past 12 months, prices dropped the most in nearly six decades as the recession and lower energy costs kept a lid on inflation.

The Labor Department said this morning that consumer prices showed no change in July, in line with analysts' expectations and far below the 0.7 percent jump in June.

Prices fell 2.1 percent over the past 12 months, the biggest annual decline since a similar drop in the period ending in January 1950. Most of the past year's decline reflects energy prices falling 28.1 percent since peaking in July 2008.

Some economists have expressed concerns that the economy could be headed toward a dangerous period of falling prices, something the U.S. has not experienced since the Great Depression of the 1930s.

However, most analysts believe the Federal Reserve has responded aggressively enough to battle the current downturn and prevent deflation.