Consumer prices 0.1 percent, gas prices drop

WASHINGTON (AP) — Consumer inflation may have peaked after surging in the spring.

Americans paid less for gas, cars and computers last month as overall prices fell for the first time since June. The trend could give the Federal Reserve more leeway to lower long-term interest rates to help the economy without igniting high inflation.

The Consumer Price Index dropped 0.1 percent in October, the Labor Department said today. A steep drop in gas prices led the decline. Food prices did rise, but at the slowest pace this year.

Excluding volatile food and energy costs, so-called "core" prices rose 0.1 percent. The cost of renting an apartment ticked up, as did prices for health care products and services.

But new-car prices dropped by the most in nearly two years. Airline fares and hotel costs declined.

A small amount of inflation can be healthy for the economy. It encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value.