Prices at the wholesale level fell 0.2 percent in October, the third consecutive monthly decrease and the longest string of declines in 17 years, the Labor Department reported yesterday.

The October decline in the Producer Price Index was largely attributed to the seasonally adjusted decline in prices of cars and trucks because the higher costs of new 1985 models -- traditionally introduced in the fall -- was lower than normal.

However, some Wall Street analysts said the government's seasonal adjustment process doesn't take into account the fact that car makers now stagger the introduction of their new models rather than bring them out all at once.

Excluding the seasonally adjusted decline in automobile prices, the index would have been flat, economists said.

During the last 12 months, the index rose 1.4 percent, much slower than the 4 percent to 5 percent rate many economists had forecast at the beginning of the year.

"Inflation continues to ease because of the slowdown in the economy, competitive pressures from imports, and oil and commodity price declines," said Jerry Jasinowski, chief economist for the National Association of Manufacturers. "Businessmen are finding markets too soft to raise prices. Under these conditions, it is unlikely that inflation will acelerate in 1985."

Many economists now expect the inflation rate at the retail level to be about 4 percent this year and slightly higher next year, somewhat below their earlier expectations. Low prices at the producer level have helped to keep costs to consumers moderate.

A major reason for the relatively moderate price performance has been the slowdown in the economy.

However, some economists said they expected prices to edge up slightly in coming months because economic growth is expected to pick up after a slight pause.

Besides moderation in prices at the wholesale level, average hourly earnings have increased only about 3.5 percent over last year and the weakness worldwide in oil prices should also keep prices low.

"Inflation has come down dramatically," said Robert Ortner, chief economist for the Commerce Department. "But it's not a noninflationary environment. Inflation is still too high."

The strong dollar has also kept inflation low by making import prices cheaper relative to that of domestic goods and providing price competition for U.S. manufacturers. However, if the dollar should decline, prices are expected to rise, economists said.

Ortner said he would like to see inflation decline to an annual rate of about 2 percent before the dollar's value falls.

Much of the decline has been in prices of natural resources such as agriculture and oil, said David W. Berson, financial economist for Wharton Econometrics. He said he expects producer prices to edge up soon because "we can't keep getting natural resource prices declining."

The index for finished consumer goods was unchanged in October although the index for capital equipment declined 0.6 percent. The index for finished energy goods rose 1.5 percent as indexes for gasoline and home heating oil rose after declining for four months. Natural gas prices declined.

The index for finished consumer goods rose 0.1 percent in October following a 0.4 percent decline in September. Prices increased for fish, processed poultry, soft drinks, processed fruits and vegetables, eggs, roasted coffee and shortening and cooking oil, the Labor Department said. Prices for fresh fruits and vegetables, pork, beef and veal declined.

Prices at the intermediate level of processing rose 0.1 percent, after falling for three consecutive months. Goods at the raw or crude level declined 0.9 percent, the third consecutive monthly decline.