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High inflation is an annoyance for some. Others make painful choices of what to cut

DEBBIE ELLIOTT, HOST:

Inflation is the highest it's been in four decades, but that means different things to different people. Some families are still able to spend freely despite the rising cost of gasoline and groceries. For others, every extra dollar spent on necessities means cutting back somewhere else. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: Jenny Connolly says everything seems more expensive these days, especially feeding her four kids ages 12, 9, 7 and 4.

JENNY CONNOLLY: Honestly, the straight to the heart one is groceries. I'm married to a public school teacher, and our kids aren't even teenagers yet, but chicken is expensive, cereal, all those type of things. We buy, like, everything generic, but everything has gone up.

HORSLEY: Connolly, who works at the University of Northern Iowa, also has to budget for a new car payment now. She just paid off her old minivan when it was totaled in December, so she was forced to buy a new one despite the inflated price. With gasoline now well over $4 a gallon, she's trying to drive as little as possible.

CONNOLLY: We weren't going to do anything for spring break, but now we're not even sure if we should, like, go on a day trip.

HORSLEY: Laura Heidler says she's fortunate financially, so higher supermarket prices have not forced her to change her shopping list. She did put off remodeling a bathroom, though. And she and her husband decided not to replace her 16-year-old Mazda just yet.

LAURA HEIDLER: Being 16 years old, I'm like, OK, she's not going to take me too many more years in the future. But right now, it's just not the time. The prices on used cars is crazy.

HORSLEY: Heidler knows the sting of high prices is causing more pain for others. She works at a food bank in Manatee County, Fla., where more and more people have been seeking help as the cost of essentials goes up.

HEIDLER: They have to make a choice. They have to pay their rent, which has gone through the roof, or they have to buy gasoline, and they can't buy food. They have to choose one or the other.

HORSLEY: So far, those tradeoffs have not put a dent in the broader economy. Overall, spending continues to grow. But Jonathan Silver, who tracks credit card spending as CEO of Affinity Solutions, says how people spend varies widely on different rungs of the income ladder.

JONATHAN SILVER: What we're seeing is very different economies. While the overall purchase spend is increasing year over year, we're seeing very different behavior patterns among lower- and higher-income groups.

HORSLEY: Early in the pandemic, wealthier households cut their spending, while lower-income families actually spent more than usual, thanks in part to government relief payments. Now that trend is reversing. Relief payments have largely dried up, and low-income families are watching their pennies. Silver says it's better-off families, many of whom socked away money while hunkered down during the pandemic, who are now beginning to open their wallets.

SILVER: People are getting out. Their gas being up, I think, is a reflection of people taking more trips.

HORSLEY: Lisa Lewins is looking forward to a lot more travel this year, including a cruise. With airfares on the rise, she and her husband cashed in some rewards points for a trip this weekend to Disney World.

LISA LEWINS: I think we got the last ticket for Epcot. It looks like it's going to be crowded. Going away is going to feel like a great reward. We are going to watch the budget, but it's going to feel really nice.

HORSLEY: Lewins is a college professor in Ohio. Her husband's an engineer. Shortly before the pandemic, the couple started a side business running a guesthouse. Business has been slow these last couple of years, but Lewins remains optimistic.

LEWINS: I think that if we all just kind of take the long view on this, we might have to cut back a little bit on our lattes and our lunches out. But ultimately, I think it'll balance out.

HORSLEY: Wages have also gone up, though not as fast as prices. Low-income workers have gotten some of the biggest pay raises in the last year. But working at the food bank has taught Heidler they often have the least wiggle room in their budgets to cover any extra expenses.

HEIDLER: I'm hopeful that, even though we're all going through this inflation together, that people will stop and consider that there are those that are in much more need than we are and that our whining and complaining about the gas prices is just that. It's just whining and complaining.

HORSLEY: For some, high inflation is mainly an annoyance. For others, it means painful decisions about what to do without.

Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.