CPI Climbing at 3.7% Annual Rate

The Consumer Price Index decreased 1.0 percent in October, before seasonal adjustment, according to the Bureau of Labor Statistics. The October level of 216.57(1982-84=100) was 3.7 percent higher than in October 2007.

The October drop from the previous month of 1.0 percent, was the biggest one month drop in 61 years and reflects the slowdown in money growth over the summer and the accompanyng fears about the economy which has caused a strong desire to hold cash balances.

Neverthe less, it was the energy index whch was responsible for most of the decline in the index. It fell 8.6 percent in October following declines of 1.9 percent in September and 3.1 percent in August. Despite the decline, gasoline prices remain 12.0percent above their October 2007 level.

The food index increased 0.3 percent in October. Compared with a year earlier, the food index was up 6.3 percent.

The medical care index rose 0.2 percent in October after rising 0.3 percent in September, and was 2.8 percent higher than a year ago.