Consumer Prices Dip, Helped By Big Drop In Oil

Gasoline pump prices show big decline; inflation pressures are starting to ease.

WASHINGTON (AP) - Consumer prices, helped by another huge decline in gasoline pump prices, fell for a second straight month in October, providing more relief to Americans battered earlier in the year by soaring energy costs.

The Labor Department reported Thursday that consumer prices dropped by 0.5 percent last month, matching the September decline. It was the first back-to-back drops in the Consumer Price Index since late last year and provided evidence that inflation pressures are beginning to ease.

Meanwhile, industrial production edged up slightly in October even though output at auto factories fell for a second straight month.

The Federal Reserve reported that industrial output rose by 0.2 percent last month following a big 0.6 percent plunge in September. However, auto production was down 3.9 percent last month as automakers continued to struggle to get control of a huge backlog of unsold cars.

In a third report, the number of Americans filing claims for unemployment benefits dipped by 2,000 last week to 308,000, the lowest level in a month, indicating that the labor market remains healthy in spite of the slowing economy.

The second 0.5 percent fall in consumer prices was better than the 0.3 percent dip that many analysts had been expecting. And core inflation, which excludes volatile energy and food prices, was also well-behaved, rising by just 0.1 percent, the smallest gain in eight months.

The good performance on inflation in October was led by a 7 percent drop in energy prices, which followed a 7.2 percent decline in September. Gasoline prices were down 11.1 percent with natural gas and home heating oil also posting big declines.

Since peaking at a record above $3 per gallon in early August, gasoline pump prices have dropped by around 80 cents per gallon nationwide in the past three months.

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