The Scot was bidding to become the first British man to win a Grand Slam title since Fred Perry in 1936.
But Federer romped home 6-2 7-5 6-2 in one hour and 51 minutes.
Murray, 21, who picked up $1million in prize money, said: “I had a great tournament but I came up against the best player to ever play the game.

ECSTASY ... Roger Federer
plants a kiss on the trophy
“I’ve got a lot of improving to do if I want to win one of these tournaments.
“But I love playing in front of this crowd. It has been the best time of my life.”
Victory gave Swiss maestro Federer his FIFTH consecutive US Open crown at New York’s Flushing Meadows and his 13th Grand Slam title.
He is now only one adrift of Pete Sampras’ record of 14 Grand Slams.
Federer, 27, said: “This is a very special moment.
“I lost two Grand Slam finals this year, so to take this one home means the world to me.
“One thing’s for sure, I’m not going to stop at 13 Grand Slam titles.
“But there’s a great bunch of guys around like Andy.
“He’s done great the last couple of weeks and I’m sure there’s much more of Andy in the future as well.”
Andy Murray is 6/1 with SunBET to win next year's Wimbledon men's singles.