WASHINGTON (Reuters) - U.S. traffic deaths dropped by 3 percent to a record annual low of 32,788 for 2010 even as motorists drove more in an improving economy, projected government figures showed on Friday.

Fatalities have dropped 25 percent over the past five years, which transportation officials and highway safety advocates partly attribute to increased seat belt use, better vehicle safety, and stronger regulations on teen driving.

Transportation Secretary Ray LaHood said too many people are still killed in preventable crashes.

"We will continue doing everything possible to make cars safer, increase seat belt use, put a stop to drunk driving and distracted driving," LaHood said.

The fatality rate of 1.09 per 100 million miles traveled for 2010 also reflects a steadily declining trend since the middle of the last decade.

Total vehicle miles traveled last year increased by 20 million miles, or 0.7 percent compared to 2009, an indication of a strengthening economy.

Figures released on Friday represent totals submitted by the states to the U.S. Transportation Department for the first nine months of the year.

The agency projects totals for the final quarter, a calculation that is usually an accurate predictor of the full year figure.

A regional breakdown showed the greatest drop in fatalities occurred in Washington state, Oregon, Idaho, Montana and Alaska, where they fell by 12 percent.

Arizona, California and Hawaii had the next steepest decline, nearly 11 percent.

(Reporting by John Crawley)

[Image via Chad Davis, Creative Commons licensed]