Falling gasoline prices played a big part in Tuesday's October inflation report, which showed consumer prices were unchanged over the prior month as a drop in the cost of energy brought down this headline figure.
Gas prices for consumers were the biggest month-over-month decliner within the energy index, falling 5% from September and 5.3% from the same month last year.
The Consumer Price Index (CPI) showed consumer prices were unchanged between September and October, owing largely to the drop in energy prices. Compared to the prior year, inflation rose 3.2% in October. "Core" inflation, which strips out the volatile costs of food and energy, showed prices rose 4.1% over the prior year in October, the least since September 2021.
Tuesday's report showed the energy index overall fell 2.5% in October. The index for fuel oil fell 0.8% in October from the prior month, while natural gas prices rose 1.2%; the cost of electricity rose 0.3%.
Compared to last year, the energy index fell 4.5% in October with the cost of fuel oil dropping 21.4% during the period. Natural gas prices are down 15.8% over the past 12 months.
Prices at the pump have been on a downward trend, with 11 states now seeing the average cost for a gallon of gas fall below $3, according to AAA data. The steady decline comes amid falling seasonal demand and less-expensive winter-grade gasoline.
The average price of gasoline is $3.35 per gallon, down $0.26 from one month ago. Even costly California has seen prices decline to $5.06 per gallon, down $0.58 from one month ago.
"Gasoline demand has struggled in recent weeks, falling not only due to the seasonal nature as Americans drive less as the weather gets colder, but it appears there may be some economic headwinds entering the equation as well," Patrick De Haan, head of petroleum analysis at GasBuddy, said on Monday.
Gasoline prices have been flat or falling since mid-September despite volatility in the oil markets during that period. Crude recently posted a third week of losses for the first time since May.
On Tuesday, West Texas Intermediate (CL=F) crude oil prices edged higher, trading just above $78 per barrel. Brent Crude (BZ=F) prices rose fractionally, hovering above $83 per barrel.
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Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.
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