Cost of living still rising, but so do job prospects

The cost of living as measured by the consumer price index climbed 0.4 percent last month as fuel and food costs continue to rise, the Labor Department reported today. Minus food and energy costs, the so-called core gauge inched higher by 0.2 percent.

The rising cost of living may be tempered by an improved job outlook  and renewed consumer confidence that will help spur spending. Federal Reserve officials are still considering the current spike in prices as temporary.

"Measures of underlying inflation, though having increased modestly in recent months, remain subdued, and longer-term inflation expectations have remained stable," Fed Chairman Ben Bernanke said last month.

According to a recent Thomson Reuters/University of Michigan consumer index report, consumer sentiment increased to 72.4 which is the highest value in three months. Even with the rise of cost of living, the overall trend seen in the last few months is that of improved consumer spending.

Consumer prices jumped 3.2 percent in the last year through April, the largest increase since October 2008. Core consumer price index climbed 1.3 percent in the last 12 months.

Even with the increase of cost of living expenditures, the Fed is not overly concerned about inflation based on the numbers. There is some evidence that, so far, consumers are not resisting heavily the higher prices on goods. Companies think that they may keep trying to pass costs to customers if they can because the job market is improving and the recovery is underway.

The Labor Department report showed that gas prices rose 3.3 percent last month, food costs were 0.4 percent higher and energy costs rose 2.2 percent in the past month and have increased 39 percent annually. These numbers point to the conclusion that cost of living in America is certainly rising despite the recovery.