Inflation at the wholesale level plunged at a record pace in October, led by big declines in the price of gasoline and new cars.

Wholesale prices fell 1.6 percent last month, tying the record decline set in October 2001, the Labor Department reported Tuesday. It was the second consecutive big decrease, following a 1.3 percent fall in September.

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Both months were heavily influenced by falling energy prices. But underlying inflation pressures were held at bay last month as well. Core inflation, which excludes energy and food, dropped by 0.9 percent, the biggest one-month fall in 13 years. That reflected big declines in prices for new cars and sport utility vehicles as dealers brought back sales incentives.

In other economic news, retail sales dropped by 0.2 percent in October, the second consecutive monthly decline following a 0.8 percent fall in September. Much of the weakness reflected falling gasoline prices, which pushed sales at service stations down by 0.6 percent in October.

The big retreat in core inflation was certain to be welcomed at the Federal Reserve, where policymakers are hoping that a string of 17 consecutive rate hikes will slow the economy enough to cause a decline in inflation pressures, which had risen above the Fed's comfort zone.

The central bank has left rates alone since August and analysts believe there will be no change when the Fed meets for the last time this year on Dec. 12.

The big 0.9 percent drop in core inflation was a welcome development following a 0.6 percent spike in September.

The big movements were attributed to car and truck prices, which drove core inflation higher in September and then acted to depress core inflation in October as dealers brought back sales incentives to move a huge backlog of unsold cars. Excluding new car prices, core inflation would have risen by a modest 0.1 percent in October.

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