Consumer prices dropped 1% in October as gasoline prices tumbled, the Labor Department said on Wednesday, marking a possible bright spot for consumers battered by economic turmoil.

The October decline was the largest one month decrease since publication of seasonally adjusted changes began in February 1947, and was mostly due to lower gasoline costs. Still, the CPI was 3.7% higher than the same month last year.

“It’s certainly better that prices come down, but the reason prices come down is that households are pulling back on their spending,” said Paul Kasriel, chief economist at Northern Trust. "And the reason energy prices are collapsing is related to the global economic recession. It is not a cause of a rebound in the economy."

The gasoline index itself fell 14% month to month, though gas prices are still 12% above year-ago levels. The energy index fell 8.6%.

The core consumer-price index, which excludes volatile food and energy costs, declined 0.1%. It was 2.2% higher than October a year ago.

Prices in areas such as apparel, airfares, lodging away from home and motor vehicles declined; but food, medical care, recreation and electricity costs continued to rise. The cost of housing was virtually unchanged.

Apparel and auto price declines "reflected very weak demand," Kasriel said, "and still an aversion to low-mileage vehicles such as SUVs and trucks, even though gasoline prices have been down."

The decline in energy costs comes after oil -- and then gasoline costs -- spiraled downward amid expectations of a global recession and lowered demand. Not too many months ago, oil was surging into record territory above $145 a barrel, and now it’s down in the mid-$50s.

The declines also ease worries about inflation, which the Federal Reserve in particular had highlighted as a concern for many months. It could raise the possibility of even more interest-rate cuts to stimulate the economy, though with the Fed’s target rate already at a slim 1%, there isn’t much more room to cut.

On the other hand, the magnitude of the declines also raises worries of deflation, a long period of falling prices, which can have a crippling effect on economies. That last occurred in the U.S. during the Great Depression.