U.S. consumer prices fell more than expected during October as energy costs took another tumble, and underlying inflation crept up at the lowest rate in eight months.

Meanwhile, overall U.S. industrial production rose in line with expectations last month, as utilities generation and mining picked up, while manufacturing slipped.

The consumer price index decreased by a seasonally adjusted 0.5% a second straight month, the U.S. Labor Department said Thursday.

Excluding food and energy, consumer prices rose 0.1%, after rising 0.2% in each of the prior three months. Unrounded, the core CPI rose 0.096% in October; it rose 0.242% in September. The 0.1% increase was the lowest since the same reading in February.

Economists had called for a 0.3% decrease in consumer prices overall and a 0.2% increase in the core index.

Overall consumer prices were 1.3% higher than a year earlier, on an unadjusted basis. Core prices, however, rose 2.7% in the 12 months ending in October 2005.

Energy prices last month fell 7.0%, after sliding by 7.2% in September. Gasoline prices last month dropped by a seasonally adjusted 11.1%. Natural gas decreased 7.7%. Electricity prices dipped 0.2%. Food prices increased 0.3%.

Separately, the U.S. Labor Department said Initial jobless claims decreased by 2,000 to a seasonally adjusted 308,000 in the week ending Nov. 11,. New claims for the previous week, ending Nov. 4, were revised up to 310,000 from a previously reported 308,000.

Meanwhile, U.S. industrial production increased 0.2% in October, rising from an unrevised 0.6% decrease in September, the Federal Reserve said today.

Last month’s industrial capacity utilization rose 0.1 percentage point to 82.2%. The September utilization rate was revised up 0.2 percentage point to 82.1% from 81.9%. October utilization rates remained above the 1972-2005 average.

The October increase in industrial output was in line with Wall Street expectations. The median estimate of 23 economists surveyed by Dow Jones Newswires indicated industrial production had increased 0.3% last month, while capacity utilization had fallen to 82.0%.

In October, overall industrial production grew 4.9% from a year earlier, while manufacturing output increased 4.1% from a year earlier. Manufacturing output — which accounts for about four-fifths of total U.S. industrial production — registered a monthly decrease of 0.2% last month, slowing further from a 0.2% decrease the previous month.

Manufacturing capacity utilization slipped 0.3 percentage point to 80.7%.