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Perhaps like many consumers, John Benjamin, 36, a credit analyst from Oak Park, Ill., is experiencing the new wealth defect. He plans to shell out 30% less for gifts this year. "My spending habits are correlated to the performance of the market," he says. Others' behavior is correlated to their credit-card debt--and after a decade of buying, and saving next to nothing, Americans are cleaning up their balances.
Still, retailers believe in Santa Claus. Some 60% of all holiday shopping takes place in the final two weeks, and merchants expect bargain-sniffing consumers to pounce at the last minute. "If the weather clears, the shoppers will be out," says Lee Scott, CEO of Wal-Mart. "They have shown they do have disposable income." Now they have to show they'll spend it.
--With reporting by Bernard Baumohl/New York, Jeffrey Ressner/Los Angeles and Matt Baron/Chicago