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CINCINNATI (Reuters) - Cincinnati receptionist Roz Steadman had never been much of a coupon clipper, but the urge to be more careful with her money amid a faltering economy changed that about a month ago.
"I go through the newspapers and cut coupons for all of the detergents, the P&G (household goods) products," said Steadman, 22, as she shopped at discount retailer Target. "And I look for sales."
Though her own job seems safe, a flood of bad news on the U.S. economic front has sown a palpable fear among consumers and many, it seems, are cutting back to save a little money.
Big money purchases were hit months ago, when nervous and pinched buyers stopped looking at homes and cars, feeding a housing crisis and sending new car sales to a 15-year low.
Now, with images of long lineups of depositors at failed bank IndyMac, talk of government bailouts of mortgage financiers Fannie Mae and Freddie Mac, and news of rippling layoffs, U.S. consumers are sweating the small stuff.
Like many, New Jersey resident Lillian Kodua, 36, is cutting back on commuting costs, sharing a ride to work with her husband. But her penny-pinching has gone beyond gasoline.
"We also bring our own lunches to cut down on costs," said Kodua, a computer valuations specialist.
"When shopping, I look for the best deal. You can go to a Macy's or Lord & Taylor to get a shirt but can get it here for $20 cheaper," said Kodua as she shopped at a Wal-Mart in Watchung, New Jersey. "It's all about the savings."
In New York, Michal Salonia said he's cut back on coffee and taxis.
"I find myself making more coffee at home. I use to buy the Kenyan Blend at Starbucks for $11.99 but now I'm buying Maxwell House. The Starbucks blend got too expensive," said Salonia, 29, who works in the entertainment production business.
While trimming a few dollars a month from household spending may not seem significant, analysts said a pullback by consumers, who account for about two-thirds of U.S. economic activity, could tip the teetering economy into recession.
Richard DeKaser, chief economist at National City Corp. in Cleveland, said that while there is not always a direct link between ebbing consumer confidence and actual retail sales, Americans have already started to become more thrifty.
"The unemployment rate has risen, banks are failing, people's wages -- for those who still have jobs -- are not keeping up with prices. That's an environment in which confidence is suffering, and behavior changes as a result," he said. "Neiman Marcus suffers, Wal-Mart suffers less. We're in an environment of thrift and that's going to play across the board."
Retailers, restaurants and consumer goods companies are all feeling the pinch, to varying degrees. Retail sales were up a paltry 0.1 percent in June, government data showed this week, disappointing analysts who had expected government tax rebate checks to give a bigger boost to spending.
Meanwhile, prices for many essentials have risen, and the consumer inflation is eating into family budgets. In just one example, the cost of household paper products like diapers has risen 8.1 percent in June from a year earlier, far outstripping gains in wages.
Restaurants are seeing business ebb, while fast-food outlets are picking up some of that slack. Grocery stores say more people are switching to less-expensive store brands.
With consumer confidence near record lows, polls consistently show the economy is the biggest concern for voters ahead of the November presidential election.
That's a sharp change from much of the last decade, when unflappable consumers powered the United States through economic and financial bumps with nary a pause.
"Up until this recent economic crunch our lives were driven by efficiency and lack of time, so we made many impulse purchases," said Jack Gillis of the Consumer Federation of America. "Now people are stopping and thinking and deciding not to buy -- or looking for alternatives."
While there has been much talk of buying smaller cars as an alternative to gas-guzzling SUVs or trucks, hints of more radical change are emerging.
Bicycle shops are seeing a surge in thrifty consumers who are resurrecting vintage bikes they'd stashed at the back of the garage, perhaps for decades, rather than buy a new bike.
The proof, they say, is a spike in demand for 27-inch tires and innertubes popular with decades-old bicycle models.
"People who have not bought a bike in years, they go down to the shop and they expect to spend $200, and you don't find that anymore," said Ken Wallace, the proprietor of the Bisbee Bicycle Brothel bike shop in Bisbee, Arizona.
"They say 'I love this, how much is it?' and when they hear the price it's a lot more than they think, and they go pull out their old Schwinn or their Raleigh, and they have new tires and innertubes put on it."
Additional reporting by Tim Gaynor in Arizona and Nancy Leinfuss in New York; editing by Michael Conlon and Philip Barbara