WASHINGTON -- Traffic deaths in the United States declined last year, reaching the lowest level in more than a decade, the government reported Thursday.

Some 41,059 people were killed in highway crashes, down by more than 1,600 from 2006. It was the fewest number of highway deaths in a year since 1994, when 40,716 people were killed.

The fatality rate of 1.37 deaths for every 100 million miles traveled in 2007 was the lowest on record, the National Highway Traffic Safety Administration said in its report.

"Thanks to safer vehicles, aggressive law enforcement and our efforts, countless families were spared the devastating news that a loved one was not coming home," said Transportation Secretary Mary Peters.

California had the largest decline, 266 fewer fatalities than the previous year. The largest percentage decreases were in South Dakota and Vermont.

North Carolina's death toll increased the most in the nation, up 121 over the previous year. The District of Columbia and Alaska had the highest percentage increases.

Montana's highway death toll increased from 263 in 2006 to 276 in 2007, a nearly 5 percent increase. However, fatalities this year are down nearly 24 percent, from 181 through Aug. 11, 2007 to 138 this year, the Montana Highway Patrol said.

Nationally, motorcycle deaths increased for the 10th straight year. There were 5,154 motorcycle deaths last year, compared with 4,837 in 2006.

In Montana, 36 people died in motorcycle crashes in 2007, compared with 27 in 2006, an increase of 33 percent. This year, 27 people have died in motorcycle crashes in Montana through Monday, compared with 31 during the same period in 2007 -- a drop of just over 10 percent.

Peters, an avid motorcyclist who keeps a scuffed helmet in her office that she credits with saving her from a severe head injury in a 2005 crash, said the rise in motorcycle fatalities was disappointing. The increased deaths have come while the number of registered motorcycles have surpassed 6 million, compared with 3.8 million in 1998, and vehicle miles traveled have risen.

Peters said with higher fuel prices, more people may use motorcycles or scooters that can get 50 to 60 miles per gallon.

Transportation officials said they plan to target motorcycle drivers in a $13 million anti-drunk driving advertising campaign running during the upcoming Labor Day holiday. The department has also discussed new safety and training standards for novice riders, increased training for law enforcement and curbing counterfeit safety-labeling of helmets.

Still, safety officials said they were encouraged by the overall trends.

Fatalities in crashes that involved a driver or motorcycle rider with a blood-alcohol level of 0.08 percent, the legal limit, declined to just under 13,000 deaths in 2007, a 3.7 percent decrease.

Traffic injuries fell for the eighth straight year, to fewer than 2.49 million injuries in 2007, compared with 2.58 million in 2006. And the number of people killed in large-truck crashes fell by more than 4 percent.

Adrian Lund, president of the Insurance Institute for Highway Safety, said the sluggish economy was likely a factor in the declines.

He predicted that the combination of a slowing economy and gas prices approaching $4 a gallon throughout the U.S. could lead to further reductions in highway deaths in 2008. Many states have reported double-digit drops in fatalities during the first part of this year.

"Fewer highway deaths is always the silver lining of a down economy," Lund said.