Last year, investment bankers and their spouses kept their wallets shut during bonus season, first, out of panic, and later, fearing mobs with torches would descend upon their gated estates. Now, after a year of self-imposed austerity and in what is shaping up as a spectacular bonus season, the Wall Street crowd is shaking off what one luxury retailer called its "frugal fatigue." Unlike earlier spending sprees, however, the consumption will be a lot less conspicuous.

On Wednesday, Morgan Stanley said it was setting aside $14.4 billion for salary and bonuses, or $235,000 per employee. A day later Goldman Sachs said it would pay an average of $498,000, with top producers at each of the two banks earning in the millions.

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Suzanne Johnson, the general manager of Saks Fifth Avenue's flagship store, said many wealthy customers were suffering from what she called "frugal fatigue." After a year of looking, they are ready to treat themselves. Next month, Saks is holding an event at its Kiton men's wear boutique where made-to-order suits can cost as much as $21,000. It will feature Kiton's craftsmen and is timed to bonus season, she said.

She recalled, too, a couple -- the husband was a banker -- who came in last month and looked at a pair of earrings from the Roberto Coin Cento collection that cost about $5,000. Days later he returned and bought them for his wife. "They are turning 'looking' into an 'impulse buy,'" Ms. Johnson said. "It is about inner self-gratification rather than letting people know how rich you are."

The slump in credit to $2.46 trillion was more than anticipated and followed a revised $4.2 billion drop in October, Federal Reserve figures showed today in Washington. The median estimate of economists surveyed by Bloomberg News projected a decrease of $5 billion. The figures track credit card debt and non-revolving loans, such as those to buy autos.

A labor market that's shed 7.2 million jobs since the recession started in December 2007 is restraining consumer spending that accounts for about 70 percent of the economy. Fed policy makers have said tighter bank lending standards and reductions in credit lines are hampering the recovery.

"Double-digit unemployment is eroding consumer confidence and the uncertainty is prompting consumers to pay down their credit card debts," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. "We have not seen such a wholesale reduction in consumer credit since the last time we had double-digit unemployment rate following the early '80s recessions."

The series of 10 straight declines in consumer credit was the longest since record-keeping began in 1943.

Sales climbed 14 percent at TJX Cos.' stores open at least a year, beating the 5.9 percent average of analysts' estimates compiled by Retail Metrics Inc. Aeropostale Inc. jumped 10 percent, compared with a 3 percent projection. Sears Holdings Corp. posted a sales gain and issued a profit forecast that topped analysts' projections.

After an East Coast snowstorm snarled sales the weekend before Christmas, shoppers made up for it with online buying and discount hunting. A "last-minute sales surge" lifted December comparable-store sales 3 percent, the biggest gain since April 2008, Retail Metrics said today. "Retailers are breathing a big sigh of relief here," Ken Perkins, president of Swampscott, Massachusetts-based Retail Metrics, said today in a telephone interview.

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Luxury retailers also beat sales estimates. Nordstrom Inc.'s sales gained 7.4 percent, compared with a 1.7 percent estimate. Annual profit will exceed its forecast of $1.83 to $1.88 a share, the Seattle-based chain said. Neiman Marcus Group Inc. posted a 4.5 percent gain. Grant Jordan, a fixed-income analyst at Wells Fargo Securities LLC in Charlotte, North Carolina, anticipated a 3 percent increase for the Dallas-based luxury retailer. Closely held Neiman Marcus doesn't provide forecasts.

A jump in purchases the week before Christmas helped year-over-year electronics sales increase 5.9 percent from Nov. 1 to Dec. 24, MasterCard Advisors' SpendingPulse said in a statement. Jewelry and luxury sales also gained, the research firm said.

The increase may signal that revenue at retailers will beat trade groups’ forecasts for the two-month period ending Jan. 2. Shoppers resumed purchasing this season as consumer confidence rebounded from a record low in February.

"We saw a nice little surge toward the end of the season," with the pace picking up Dec. 22, 23 and 24, said Michael McNamara, a vice president for research and analysis at SpendingPulse, in a Bloomberg Television interview today. "Last year, we were in critical condition, this year, in stable."

Target Corp. extended its hours to midnight Dec. 21 through yesterday. Borders Group Inc., Wal-Mart Stores Inc. and Toys R Us Inc. also kept stores open longer. Best Buy Co. offered some DVDs for half off and Jos. A. Bank Clothiers Inc., a men's clothing chain, deepened discounts to at least 50 percent.

"We didn't intend to do everything, and now we're doing everything," Jos. A. Bank Chief Executive Officer Neal Black, 54, said Dec. 22 by telephone from the company's Hampstead, Maryland, headquarters. "We'll be slugging right down to the last minute."

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Walmart, the world's largest retailer, will keep most of its 803 discount stores and its Sam's Clubs open until 8 p.m. today, two hours later than last year, said John Simley, a spokesman. Amazon.com Inc. extended by one day, until Dec. 21, its cutoff for standard shipping.

Sales at U.S. retailers rose more than forecast in November, a sign consumer spending is gathering speed heading into 2010. The 1.3 percent increase followed a 1.1 percent gain the prior month that was smaller than previously estimated, Commerce Department figures showed today in Washington. Purchases excluding autos climbed 1.2 percent, also more than anticipated and the biggest gain since January.

Households have kept buying automobiles even after government incentives expired, showing the biggest part of the economy was weathering the worst employment slump in the postwar era. The Obama administration is proposing new initiatives in a bid to create jobs, while Best Buy Inc. is among retailers using discounts to lure budget-conscious holiday shoppers.

"Consumer spending continues to surprise on the upside as the economy moves further away from the end of the recession," Chris Rupkey, chief financial economist at Bank of Tokyo- Mitsubishi UFJ Ltd. In New York, said before the report. "The labor market is showing signs of stabilization and this is giving consumers greater confidence to spend a little more."

Nine of 10 people waiting to finish their holiday shopping are doing so to get discounts of at least 50%, according to a survey released Thursday by UBS and market researcher America's Research Group Ltd. A third of respondents said they are holding out for a 70% discount.

Retailers are reluctant to hit the panic button. So far, they have avoided drastic price cuts by hewing to carefully planned promotions and limiting inventories. But if shoppers aren't out in force this weekend, many mall-based clothing retailers have arranged contingency plans for additional sales and markdowns. "If we don't have to do it, believe me, we're not going to do it," said Kay Krill, chief executive of women's clothing chain AnnTaylor Stores Corp. Its Ann Taylor and its Loft outlets have discount banners "ready to go" should consumers need an incentive to shop, she said.

The first week of December, typically a lackluster time in the wake of Black Friday, was particularly slow. Sales for the week ended Dec. 5 fell 18% from the prior-week period, which included Black Friday, according to market researcher ShopperTrak RCT Corp. Last year, when the recession was in full force, sales fell a lesser 14%, according to the firm, which compiles shopping traffic at malls and uses sales statistics, as well as Commerce Department figures, for its estimate.

"After solid traffic the first couple of days, it looks like the middle of August out there," said Stephen Baker, vice president of industry analysis for retail watcher NPD Group.

The recession may be over but companies that cater to consumers believe people are digging in for a long, frugal winter. That's why Clorox Co. is keeping the price steady on a new improved trash bag that grips the top of the garbage can. Clorox says it wants to highlight the bags' "greater value." Similarly, Campbell Soup Co. recently reduced the promoted price of its V8 beverages in some markets to 2 for $5 from 2 for $6. Burger King Holdings Inc. is selling double cheeseburgers for just a dollar.

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Pricing is perhaps where companies are finding consumers at their most grudging. Procter & Gamble Co. and other major makers of household staples, while vowing to resist price wars, say they plan to flood stores with enhanced versions of existing products. After nearly a decade of introducing increasingly expensive items, P&G's new products will span a wider range of prices, most notably at the low end. Among its efforts, P&G is paring the price of its Cheer detergent to reposition it as a "value" brand.

Beauty products maker Estee Lauder Cos. Inc. recently reported better-than-expected results in a sign that consumers are starting to boost discretionary spending. But Estee Lauder CEO Fabrizio Freda told analysts it's "prudent to remain cautious in our outlook" because of high unemployment and weak consumer sentiment. As a result, Mr. Freda said Estee Lauder's holiday gift sets will offer wider price ranges to give consumers greater choice.

Consumers who have deferred spending on home goods and clothing for themselves will come out to seek bargains, said Stacy Janiak, vice chairman and head of U.S. retail at New York- based Deloitte. "It is a comeback, somewhat," Janiak said in a telephone interview yesterday. "There is a replenishment need that’s out there. Everyone pulled back last year and kind of made do with home furnishings and decorations" from previous years.

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Consumers like to spend during the holidays and are suffering from "frugal fatigue," said Marshal Cohen, chief industry analyst for NPD Group, a market-research firm in Port Washington, New York. "The consumer's clearly telling us that they're beginning to get a bit tired of having to save money," Cohen said on a conference call hosted by Dow Jones Indexes and STOXX Ltd. yesterday.

Net income slid to $549 million, or 55 cents a share, from $970 million, or 96 cents, a year earlier, Atlanta-based UPS said today in a statement. Revenue fell 15 percent to $11.2 billion.

UPS is considered a proxy for the U.S. economy because it handles half of all packages sent, ranging from auto parts and medicine to financial documents and clothing. UPS's Ground unit volume slid 6.2 percent as a competing service from FedEx Corp. took away some deliveries, said Donald Broughton, an analyst at Avondale Partners LLC in Nashville, Tennessee. He rates the shares "market perform." "Ground is the bread and butter of UPS and if that's down, it's not good," he said. "The underlying business was weaker than we expected."

Spending among 1,067 consumers with average annual income of $228,800 rose to $18,826 each in the three months ended in September from $14,554 a quarter earlier, the Stevens, Pennsylvania-based luxury-market research firm said today. Shoppers cut spending by 3.2 percent in the second quarter and spent $13,429 in the third quarter of 2008.

The increase was driven by consumers with the highest income levels, starting at $250,000 a year, said Pam Danziger, Unity's Marketing's president. Spending was strongest in the home, travel and dining segments, she said. The wealthy curbed purchasing earlier this year because of Wall Street job cuts, lower home values and volatile financial markets.

"No question that this quarter's spending increase is good news for luxury marketers," Danziger said in a telephone interview today. "Many affluent consumers returned after sitting on the sidelines for a year. However, the richest are few in number, 2.5 million households, so competition will be fierce to win their attention."

Respondents with average incomes of $300,000 said they will spend $2,380 on average this year, compared with $2,505 last year, according to the survey. Nine percent said they won't buy any gifts, 38 percent said they will spend less, 59 percent said their expenditures will remain the same and 3 percent said they will spend more. In the U.S., the wealthy have curbed purchasing for more than a year because of Wall Street job cuts, volatile financial markets and lower home values.

"Most of these households continue to be cautious about their spending, because they do not expect to see a true recovery of the economy and their net worth for two years or more," Ron Kurtz, the Alpharetta, Georgia-based center's founder, said.