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Consumer prices drop, easing inflation fears

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By CHRISTOPHER S. RUGABER AP Economics Writer

WASHINGTON (AP) -- Consumers paid less for gas, cars and computers last month, as overall prices dropped for the first time since June. Inflation is easing after prices rose sharply this spring.

The Labor Department says the Consumer Price Index dropped 0.1 percent in October. It rose 0.3 percent the previous month. A steep drop in gas prices led the decline. Food prices rose, 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 rose, as did prices for health care products and services.

But new car prices dropped by the most in almost two years, and airline fares and hotel costs declined.