U.S. consumer price index falls sharply

WASHINGTON, Nov. 19 (UPI) -- The Consumer Price Index dropped by its sharpest rate in 61 years in October, the U.S. Department of Labor said Wednesday.

The drop of 1 percent in the headline figure meant consumers had taken their collective foot off the the gas pedal and applied it to the brakes of the economy.

"It's funny that just a few months ago everyone was wringing their hands over inflation," Nariman Behravesh, chief economist at Global Insight told The New York Times. "It's gone. It's over."

Core inflation, excluding food and energy costs, dropped 0.1 percent, the department said.

On the year, inflation stands at 3.7 percent, while core inflation has gained 2.2 percent since October 2007.

October's price declines were pushed by an 8.6 percent drop in energy costs, which have been on a 43.1 percent annual price decline rate over the past three months.

"The dominant and common factor is the plunge in gasoline prices, which drove the bulk of the weakness," James O'Sullivan, an economist at UBS, said to the Times. "You're going to see huge declines in a month's time in the November reports. That's the biggest part of the weakness."