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Economy Stinks for Many, But It's Crushing Millennials

While the continued economic slump hobbles many Americans, the downturn is crushing young people.

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Almost half of millennials—those between 18 and 34—think they'll be worse off than their parents, according to research from Demos , a non-partisan policy and research center.

And voters under age 30 in Tuesday's presidential election identified unemployment (49 percent) and rising prices (37 percent) as the most pressing economic issues they face, according to the Pew Research Center .

All this is forcing some young people to skip one of their favorite past times—eating out.

(Read more: Why More Millennials Go Part Time for Full Time Pay)

Among the heaviest restaurant users, new research shows in the year ending July 2012, millennials ate out 203 times annually — 49 times or 19 percent less than they did in the year ending July 2007, according to the NPD Group, a consumer market research firm.

"I've been doing this for 35 years and that has always been the case (millennials eating out). But not the last few years," said Harry Balzer, NPD's chief industry analyst. "This is all about how the economic downturn is affecting this group more than anybody else," he said.

(NPD defines dining out as everything from a Starbucks latte to a full sit-down meal at a restaurant.) Dining out costs roughly three times more than packing a sandwich or eating at home.

"I always bring my own lunch to save money," said Andrew Welsch, 28, of Long Island, N.Y. "My friends do the same thing. I still have to pay back my student loans," he said.

A Generation Defined by Debt

Young people are cutting back on daily expenses such as dining out because personal debt levels are rising. Among college graduates, two-thirds owe an average of $28,500 in student loans, according to the Census Bureau and the Institute of Education Science. Average.

Many millennials are accumulating personal debt that spans unpaid student loans, credit card bills and medical expenses, according to the Demos report released last year.

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With money tight, millennials voted this week with the economy on their minds. Voters under 30 also cited taxes and housing as important issues they face, said Scott Keeter, director of survey research for the Pew Research Center. He's also an exit-poll consultant for NBC News.

Weak Job Prospects

Weak job prospects are also hurting millennials. The unemployment rate for 18- to 34-year-olds for October was 10.8 percent, higher than the national unemployment rate of 7.9 percent, according to the U.S. Bureau of Labor Statistics.

Underemployment and low wages are problems too. More than half (57 percent) of young people would like to be working and earning more, and just half (53 percent) are working in their chosen fields, according to Demos research. Among millennials, more than half (56 percent) reported annual pretax incomes below $30,000.

(Read more: Some Millennials Becoming More Fiscally Conservative)

With small incomes and little to no personal savings, many young people have delayed big life decisions.

Almost half (46 percent) have delayed buying a home, and nearly one third of millennials (33 percent) have postponed moving out on their own, according to Demos research. Welsch is holding off on getting an apartment with his girlfriend until after he completes his masters degree at the City University of New York.

Millennials have put off starting a family (30 percent), and a quarter has pushed back getting married.

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Real Happy Hours

Welsch and others like him are riding out the economic downturn by reducing expenses such as dining out to celebrate birthdays. The gang used to gather at "a nice, mid-range restaurant ot McDonald's," he said.

But with the group unemployed or hours cut back, that tradition has been scrapped too. "We have to skip out on nonessentials like eating out, which is fun," he said.

With so many young people struggling, there could be a ripple effect for the restaurant industry. Younger diners traditionally have helped define eating trends as early adopters. "This group has been influential in their choices," said NPD analyst Balzer.

As a comparison, those aged 50 and older are eating out more since the depths of the 2008 financial crisis — 209 times annually this year compared to 197 outings for the year ending July 2007, according to the NPD Group's research.

So while older Americans fill sit-down restaurants, you'll likely find young people at bars, and enjoying a cheaper beer and snack.

"We're a big fan of happy hour," said Welsch. "If we're going out for drinks, it has to be happy hour — or we wouldn't do it."

With additional reporting by Erin Horan.

By Heesun Wee, CNBC.com

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