WESTCHESTER, N.Y. — Kamlesh Raja is making unpleasant choices in his business and in his personal spending in response to the troubled economy.

Raja, who owns Saxon Cards and Gifts in White Plains, said he recently slashed an inventory order and has reduced his only employee's hours by about 75 percent. Cutting the worker's hours means that Raja has to work up to 75 hours a week.

"It's longer hours and less money," he said. "I'd love to cut out of here (the store) more, but I can't afford to pay someone to work."

He and his wife have stopped going to the movies and no longer make Friday evening trips into Manhattan for dinner with friends.

Businesses and consumers nationwide are paring spending in response to a global financial crisis that has slammed stock portfolios, wiped out once-powerful Wall Street firms and changed the shape of the presidential race.

Fear is up. Spending is down. Thriftiness is in. Shopping is out.

A private report released earlier this month said consumer spending, not counting autos, fell 2.4 percent in September on a seasonally adjusted basis. The SpendingPulse report by MasterCard Advisors may not capture the worst of the bad news. Consumer spending could fall by even more in October, a month in which stock losses have accelerated.

The austerity is both a symptom and a cause of a lousy economy. Consumers and businesses cut back because they lack confidence about the future. But when they cut back, business receipts decrease, making it harder for companies to pay workers, invest in inventory and equipment or, in some cases, survive.

Even in the wealthy suburbs north of New York City, folks are adjusting to a new economic reality.

Raja said he bought his store early this year but knows how much business the previous owner was doing. Sales are off about 12 percent, he said.

Business has dropped even though he has added newspapers and lottery tickets to his product mix. He also has expanded the store's hours.

"If I hadn't done these things, I'd hate to think what my situation would be. It's scary," he said.

He and his wife, a microbiologist at a hospital in the Bronx, cut back on the dinners in New York City during the summer when gasoline prices were especially high.

"Now gas prices have come down, but the economy has gone crazy," he said.

During the 1990s, stock prices soared and raised consumers' spirits with them. Economists called the market's impact on people's psyches "the wealth effect." Now shrinking retirement accounts are keeping people out of stores, restaurants and auto showrooms.

William Kellner, a medical writer from Yorktown Heights, said he's nervous, "like anyone else with a 401(k) and money invested in the stock market."

He's becoming more cautious with his spending and is considering taking up coupon clipping.

"I was going to get a flat-screen, 32-inch TV, but I am more willing to wait than rush off," he said. "It's not an essential. It's just something we don't need. We can live with our 20-inch tube TV."

Others are taking a hit from the housing slump. Jon Van Gorden, a Home Depot employee, will not be doing his part to spur the consumer economy because there is a big hole in his budget where his housing profits were supposed to be.

Van Gorden sold his three-bedroom ranch in Carmel in early September for $325,000 —$45,000 less than the asking price he set when he put the home up for sale in November 2007.

"The things I originally intended to do are not going to happen now," he said. "My financial security is everything now. The money I intended to spend on the new place is going to be put in the bank."

At Rockland Mattress on Route 59 in Nanuet, operations manager Gerard Restivo said business has been affected by the slowdown in home sales.

With fewer people buying and building houses, sales of home furnishings, such as mattresses and bedroom furniture, have taken a hit, Restivo said.

It all means he is ordering less product.

"Most businesses today are not holding nearly the inventory they used to hold," Restivo said.