Consumer Prices Dive 1%, Biggest Drop in 61 Years

Oil's record decline leads to 1% overall drop
By Newser Editors and Wire Services
Posted Nov 19, 2008 9:07 AM CST
A customer shops at a Wal-Mart in San Jose, Calif., Wednesday, Aug. 13, 2008.   (AP Photo/Paul Sakuma)
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(Newser) – Consumer prices in the United States plunged by the largest amount in the past 61 years in October as gasoline prices dropped by a record amount. The Labor Department said today that consumer prices fell by 1% last month, the biggest one-month decline on records that go back to February 1947. The drop was twice as large as the 0.5% decline analysts expected.

The big drop in inflation reflected not only a huge fall in gasoline and other energy costs, but widespread declines in other areas. Core consumer prices, which exclude food and energy, fell by 0.1% last month, the first drop in core prices in more than a quarter-century. Analysts predicted further declines in the months ahead. "This report clearly reflects the crunch in discretionary consumers' spending which is likely to persist for the foreseeable future," said one economist.