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U.S. consumer prices dropped in the month of October, the second time this year, due to declines in the cost of gasoline, according to economists cited by Bloomberg News.
Consumers paid 0.3 percent less for goods and services last month, following a 0.5 percent drop in September, according to the report. This forecast is the median estimate of economists surveyed by Bloomberg News.
Sales at retailers, excluding service stations, rose in October. A drop in service station sales as prices dropped most likely masked gains in other retailers, the report stated. Sales also fell in the home building and auto sales industries, evidence that points to an accelerating economy after the weak growth last quarter, the report stated.
"The third quarter was probably the worst," Nigel Gault, director of U.S. research at Global Insight Inc. told Bloomberg News. Fuel cost "is giving consumers a lot of extra purchasing power," he added.
However, the future does not look as bright for fuel retailers. "Outside of gasoline, we expect another solid report," Michael Englund, chief economist at Action Economics LLC told Bloomberg News.
"The consumer I think is feeling much better about fuel prices," Mike Ullman, CEO of J.C. Penny Co., told Bloomberg News last week. "People have jobs. I think the consumer is excited about the holiday season."