WASHINGTON, Nov 13 (Reuters) - The number of U.S. adults who smoke has dropped below 20 percent for the first time on record but cigarettes still kill almost half a million people a year, health officials said on Thursday.

About 19.8 percent of U.S. adults -- 43.4 million people -- were smokers in 2007. That was a percentage point below the 2006 figure and followed three years of little progress, the U.S. Centers for Disease Control and Prevention said in a report.

Smoking and secondhand smoke kill 443,000 people annually from cancer, lung disease, heart disease and other causes, the CDC said. Half of all long-term smokers, especially those who start as teens, die prematurely, many in middle age.

And smoking burns a large hole in the economy. Including direct health care expenditures ($96 billion) and productivity losses ($97 billion), the economic burden of smoking on the United States hit $193 billion per year, the CDC said.

“Even though we’ve come a long way, there’s a long way to go,” said Dr. Matthew McKenna, director of the CDC’s Office on Smoking and Health.

Smoking became widespread in the United States when soldiers fighting in Europe in World War I were given cigarettes, which by that time were made by machines rather than by hand. After the war, smoking by women also became more accepted socially.

U.S. health officials began systematically tracking smoking rates in the 1960s. When U.S. Surgeon General Luther Terry issued a landmark report on health hazards of smoking in 1964, 42 percent of U.S. adults were smokers. His revelations triggered a long but gradual decline.

Thomas Glynn of the American Cancer Society said the rate was now the lowest since just after World War I.

“We’ve begun to come full circle on this,” Glynn said.

Glynn cited three major recent factors in driving down smoking: smoking bans in public places, higher taxes that drive up prices and more medications to help people quit.

The CDC said smoking still causes at least 30 percent of cancer deaths, including more than 80 percent of lung cancer deaths, as well as 80 percent of deaths from the lung ailment chronic obstructive pulmonary disease.

The CDC report found that 17 percent of women smoke compared to 22 percent of men. Whites (21 percent) smoked at higher rates than blacks (20 percent) or Hispanics (13 percent). Asian Americans were lowest (10 percent) and American Indians and Alaska natives were highest (36 percent).

Among people who never graduated high school, 25 percent smoked in 2007. Among those with undergraduate degrees, 11 percent smoked, while 6 percent of those with graduate degrees smoked.

“The tobacco industry is very good at creating confusion and misinformation. And the more education people have, the less likely they are to believe some of the myths and misinformation that the industry promulgates,” McKenna said. (Editing by Alan Elsner)