NEW YORK (CNNMoney.com) -- Wholesale prices fell in December for the fifth month in a row, according to a key government inflation report released Thursday.

The Producer Price Index (PPI) for finished goods fell 1.9% last month, according to the Labor Department. That drop was less than the 2.2% drop in November, but in line with the 1.9% decrease expected by a consensus estimate of economists surveyed by Briefing.com.

The drop in wholesale prices slowed slightly because energy prices didn't fall as fast. The index for energy prices dropped 9.3% in December after sinking a more hefty 11.2% in November.

Meanwhile, prices for consumer foods fell 1.5% after holding steady in November.

One analyst said that the government report on wholesale prices was more about the dramatic change in energy prices than it was reflective of the change in prices overall.

"We should begin to see energy and commodity prices in general find some kind of stabilization," said Anika Khan, economist with Wachovia. "It is energy prices in general that is pulling down overall or headline PPI," she said.

Prices for wholesale goods fell through the various production stages. For those producers of intermediate goods, prices fell 4.2% in December after declining 4.3% in November. And basic goods dropped 5.3% in December after falling 12.5% the month before.

The so-called core PPI, which strips out volatile food and energy prices, jumped 0.2% after a more modest 0.1% rise in the prior month. Economists were looking for a 0.1% rise in that reading.

On a year-over-year basis, the price of finished goods eased 0.9%. In the prior year, the price increased 6.2%.

The key factor in the annual turnaround was energy prices. They sank 20.3% over the course of 2008, compared to a 17.8% jump in the year prior.

In July, the annual rate of increase in the PPI surged to 9.9% as crude oil prices hit their record highs. Over the summer, analysts were concerned about inflation.

With the PPI showing its first month with a year-over-year decrease in prices in five years, however, analysts were no longer worried about inflation, but had started to worry about deflation.

While lower prices seem like a boon for cash strapped consumers, some economists have begun to grow concerned over the dangers of deflation in a recession. A drop in prices signals a drop in demand and may inhibit businesses and consumers from ramping up their spending.

Another key reading on inflation is due out Friday. The Consumer Price Index, which measures retail prices, is expected to have fallen by 1% in December. The core CPI is forecast to have risen by 0.1%.