November 16, 2006 8:30 AM, EST

Consumer Price Index Falls 0.5% in October; Core Gains 0.1%

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.S. consumer prices in October fell 0.5%, matching a drop in September that was the highest since November 2005, the Labor Department reported Thursday.

The so-called “core” consumer price index excluding food and energy rose 0.1% follow-ing a 0.2% increase in September, Labor said.

Economists had expected the index to fall 0.3%.

Core prices increased 1.3% from October 2005, their smallest year-over-year increase since June 2002, Bloomberg said.

Falling airline fares and energy costs, highlighted by the steepest recorded decline in natural gas prices, contributed to the softening consumer prices, Bloomberg said.

The report follows the release of the minutes of the Federal Open Market Committee’s Oct. 24 meeting, in which Federal Reserve commissioners continued to express concern about inflation risks. (Click here for related coverage.)

The CPI is the government's broadest gauge of costs for goods and services. Almost 60% of the CPI covers prices consumers pay for services.

If consumer prices are climbing, it could reflect an increase in demand for consumer goods, which increases the demand for trucking services.