WASHINGTON (October 20, 2009)--Wholesale prices dropped unexpectedly in September because of lower energy costs, as inflation remains in check amid signs of a broad economic recovery, the U.S. Department of Labor said Tuesday.

The Labor Department said the Producer Price index fell 0.6 percent last month.

Wall Street economists expected a flat reading.

The drop comes after a steep rise in August.

In the 12 months ending in September, the index dropped 4.8 percent, more than analysts expected and the 10th straight month of annual declines.

Excluding volatile food and energy costs, the core index fell 0.1 percent in September.

In the year ending last month, the core rose 1.8 percent.