And, reported CBS News correspondent Bianca Solorzano on The Early Show Wednesday, with Christmas right around the corner, indications are growing that even Santa is feeling the pinch.
Take New York City trial lawyer Dana Friedman, for instance. He's usually very busy this time of year. Every November, Friedman swaps his business suit for a red one, as he plays Santa.
"Until this year, I've been extraordinarily busy," Friedman told Solorzano. "My schedule is booked from Thanksgiving forward. until Christmas day. This year, the call for Santa has dropped off considerably." He says he's seen a 70 percent drop in demand for Santa's services.
Macy's in New York's Herald Square is famous for its Christmas lights and decorations but, says Solorzano, in this bad economy, for most places, this Christmas will be anything but business as usual.
Retail sales numbers just released are bleak. From September to October, they fell a record $10.3 billion.
Stores such as Abercrombie and Fitch, Target, JC Penney and Saks Fifth Avenue posted huge losses in their third quarters.
So how will all this translate into what will be under the Christmas tree?
"I think you'll see fewer frivolous gifts given this year," says retail analyst Joe Feldman.
The crunch is being felt not just in homes, but towns across the country, Solorzano points out, as municipalities are forced to cut back on decorative lights, or cancel community holiday festivities.
Also scrapped cancelled? Many work holiday parties.
But Friedman is keeping the Christmas spirit alive.
He says he loves dressing up as Santa. "It's wonderful," Friedman says. "When you see a sparkle in a child's eye, when they see Santa come in, you can't put a price on that."