It looks like deflation is well under way. The US producer price index fell a record 2.8% in October, the most since the government began the series in 1947. And wholesales gasoline prices, which also fell a record 24.9%, has much to do with the decline. Core PPI, which excludes energy and food prices because of their volatile nature, increased a bit, gaining 0.4%. Economists had forecast a 1.6% loss for the PPI, and a 0.1% gain for the core.

Overall, wholesale energy prices fell 12.8% in October, the most since 1986, while food prices declined 0.2%. Good news for the American consumer.

Via MarketWatch:

Records also fell further back in the production pipeline: Prices for intermediate goods fell 3.9% in October, while prices for core intermediate goods dropped 1.7%, prices for crude goods sank 18.6%, prices for crude core goods retreated 17% and crude food prices dropped 11.1%.

Year-over-year, producer prices have increased 5.2%.

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