Americans are rapidly shifting from spendthrifts to savers, as they remain wary in the face of rising layoffs. Retail sales and orders for manufactured goods have dropped, and the number of people claiming jobless benefits remain near record highs.
Cost-cutting websites can help consumers find ways to save. Today Google launched its own frugal forum, called "Google Tipjar." Google collected hundreds of tips from across the web, organized them by category, and now anyone can review those tips and rank them in order of usefulness. The tips that receive the most votes will automatically float to the top of the list, using the wisdom of the crowds to help you find the best tips out there. Users can also post their own cost-cutting advice.
Consumer spending makes up about 70 percent of the economy. It topped out at 71% in 2005, Hampel said, but will likely drop by 2 to 3 percentage points over the next few years.
On the web: Google Tipjar
With this tool, users find new ways to cut down on utilities bills, plan more cost-conscious vacations, and save money on everyday activities like commuting to work and grocery shopping.
Consumers' growing frugality has hammered automakers, among other industries. General Motors Corp.'s auditors on Thursday raised "substantial doubt" about the auto giant's ability to continue operations, and the company said it might have to seek bankruptcy protection, sending its shares below $2.
Bill Hampel, chief economist for the Credit Union National Association, said his group's members are reporting record increases in deposits. Government figures show the savings rate jumped to 5 percent in January from zero last spring. That's the highest rate since 1995 and a much faster shift than he had expected, Hampel said.