The souring job market and rising costs of the usual teenage indulgences — a slice of pizza, a drive to the mall, the hottest new jeans — are causing teens to do something they rarely do: be thrifty.
It's a far cry from the freewheeling spending of recent years, when teens splurged on $100 Coach wristlet handbags, $60 Juicy Couture T-shirts and $80 skinny jeans from Abercrombie & Fitch.
Now jobs for teens are less plentiful, and parents who supply the allowances are feeling the pinch themselves.
The stalwart retailers of teen apparel, such as Abercrombie and American Eagle Outfitters Inc., are reporting sluggish sales, defying the myth that teen spending is recession-proof: It holds up longer, but can eventually fold.
It's even becoming cool to be frugal.
Last week, Ellegirl.com, the teen offshoot of Elle magazine, launched a new video fixture called Self-Made Girl, which shows teens how to make clothes and accessories. The first video offers tips on how to create a prom clutch.
"It's a little tacky in the economic unrest to tote a big logo bag," said Holly Siegel, the site's senior editor. She said it's no longer about teens "one-upping each other," but rather where they can get it cheap.
Victoria Bradley, a 16-year-old from Springfield, Mo., says the $80 she earns each month from babysitting is being eaten up by more expensive school lunches, late-night snacks with friends and stylish clothes. Now, she says, she and her friends head for the thrift store or just browse at the mall.
The job market for teens isn't what it used to be, either: Nathan Reeser, a Cincinnati 15-year-old, lost his job making pizza four months ago and has had to cut back on spending. He's shopping more at Target and less at Abercrombie & Fitch's Hollister stores.
"Now, I just get money from my parents, but they don't have as much because of taxes and everything else," he said.
Teen hiring has slumped by 5 percent since March 2007, with many mom-and-pop stores, which typically hire younger workers, laying off employees. Hiring in the overall job market fell by just 0.1 percent during the same period.
That's still not as bad as the 13 percent drop in teen hiring in the early 1990s. That means that if the larger job market mirrors the last teen hiring slump, "we're not out of the woods," said Michael Niemira, chief economist at the International Council of Shopping Centers.
Economists say this teen spending slump could be the worst in 17 years, when teen frugality ushered in an era of flannel shirts and torn jeans.
Last month, teen retailers suffered an 8 percent drop in sales at established stores. The good news is that the under-20 crew is still spending on gadgets like iPods, cell phones and headsets, analysts say.
What makes this slump different, says Deloitte Research chief economist Carl Steidtmann, is the soaring cost of basics such food and gas, which have a direct effect on younger consumers.