WASHINGTON (AP) — Consumer inflation may have peaked after surging in the spring.

Americans paid less for gas, cars and computers last month as overall prices fell for the first time since June. The trend could give the Federal Reserve more leeway to lower long-term interest rates to help the economy without igniting high inflation.

The Consumer Price Index dropped 0.1 percent in October, the Labor Department said Wednesday. A steep drop in gas prices led the decline. Food prices did rise, but at the slowest pace this year.

Excluding volatile food and energy costs, so-called "core" prices rose 0.1 percent. The cost of renting an apartment ticked up, as did prices for health care products and services.

But new-car prices dropped by the most in nearly two years. Airline fares and hotel costs declined.

A small amount of inflation can be healthy for the economy. It encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value.

Consumer prices have increased 3.5 percent in the 12 months ending in October. Core prices have risen 2.1 percent in that stretch.

High unemployment, stagnant pay and slow economic growth are likely to keep inflation in check. Without higher pay, consumers can't afford big increases in prices.

Still, Fed policymakers will now likely feel less concerned that further steps to boost the economy might trigger high inflation.

"In the current soft economic environment, inflation is not an issue for policymakers," said Jennifer Lee, an economist at BMO Capital Markets.

Rising oil and other commodity prices pushed consumer prices up earlier this year, though that process has begun to reverse. The average price of gas rose to nearly $4 a gallon ($1.05 a liter) in May. But gas prices dropped a seasonally adjusted 3.1 percent in October.

And the cost of milk, eggs, chicken, and beef rose sharply, a result of higher prices for corn and other grains used as animal feed. Fruit and vegetable prices rose due to winter freezes.

But grain prices have fallen since summer. And fruit and vegetable prices dropped by the most in five years last month.

Slower inflation could boost consumer spending, which accounts for 70 percent of the economy. Retail sales rose 0.5 percent in October. Americans spent more on trucks, electronics and building supplies. That suggests the economy is continuing to grow modestly in the October-December quarter.

Still, consumers might not be able to sustain their spending growth if unemployment remains high and pay raises meager. And Europe may be on the brink of a recession, which could further slow U.S. growth next year.

Federal Reserve policymakers are projecting lower inflation next year. That would give the central bank more latitude to hold down interest rates, and potentially take other steps to stimulate the economy. The Fed has kept the benchmark short-term rate it controls at nearly zero for almost three years. If there were signs that inflation was increasing, the Fed would likely raise rates.

The central bank said two weeks ago that it expects inflation to fall from about 2.8 percent this year to roughly 1.7 percent next year. That's in the Fed's preferred range of about 1.7 percent to 2 percent.