ANGERED by rising prices and fearful of future economic tremors, U.S. consumers have turned cautious in their buying habits. They are shopping harder for bargains, postponing some planned purchases of costly items and hesitating about buying on credit. "We see a marked change over the past four weeks," says Ernest Molloy, president of Macy's, echoing a common sentiment among merchants. Caught in a pincers, they feel squeezed both by the rising costs of doing business and by mounting consumer resistance.

The new mood—welcome to Washington's inflation fighters but a source of concern to many businessmen—has been building up for months. The...

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