NEW YORK (CNN/Money) - Thanksgiving politeness and festivity out of the way, shoppers got down to the nitty gritty on "Black Friday," one of the busiest shopping days of the year.

Retailers, hoping for a green Christmas, anticipated crowds of people lining up for big pre-dawn discounts at stores nationwide on Friday.

Merchants call the day after Thanksgiving Black Friday because it's the day on which they pin hopes of moving their books out of the deficit "red" and into the profitable "black." The holiday season generally accounts for half of retailers' annual sales and profit.

But Thanksgiving fell a week later than usual this year, cutting the holiday shopping season short. Americans, unsure about their jobs and a possible war with Iraq, have left retailers wondering whether Black Friday will help them evade the noose of dampened consumer spending that has been tightening all year.

"You do have a defensive consumer. If the consumer is very nervous and uncertain about what is going to be happening, you don't know how they're going to react," said Delos Smith, economist with the Conference Board, a New York-based business research group.

Bolstering retailers' hopes the Conference Board's latest survey Monday, which showed Americans are likely to spend about 5 percent more on gifts this year than last. This follows predictions from the National Retail Federation last month for total holiday spending to increase 4 percent from a year earlier.

Still, retailers remained cautious. On Monday, Wal-Mart Stores Inc. (WMT: Research, Estimates) and Federated Department Stores Inc. (WMT: Research, Estimates) said the outlook for Black Friday was still too fuzzy for them to change previous forecasts for sluggish November sales at stores open at least a year, a key gauge known as same-store sales.

Because of this uncertainty, shoppers can expect big bargains when they hit the stores on Black Friday, industry watchers said, noting that merchants are likely to offer heavy discounts now instead of later in the season in hopes of luring shoppers into their stores.

Predicting consumer behavior is more art than science, Smith acknowledges, but certainly confidence in the economy is down. The Conference Board's consumer confidence index plunged to its lowest level in nearly nine years in October due to a weak labor market, the threat of war with Iraq and the uncertain financial markets.

"The outlook for the holiday retail season is now fairly bleak," Lynn Franco, director of the Conference Board's Consumer Research Center, said in a statement accompanying the confidence report.

But October same-store sales rose a better-than-expected 3.1 percent, helped by cooler weather that triggered winter clothing sales. That trend continued in the first week of November, giving hope to some industry watchers that consumers are still willing to spend given the right incentives.

"The one thing that October showed us is that consumers aren't afraid to spend, even in a slow economy," said Ellen Tolley, a spokeswoman for the National Retail Federation, the industry's largest trade group.

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Adding to the fragile optimism was the Federal Reserve's half-point interest rate cut Nov. 6 that raised expectations of a final round of home refinancing that might free up cash for the holidays, or at the very least give consumers a psychological boost.

Low interest rates have enticed consumers to buy new cars and new homes, and to refinance mortgages, which has helped keep the economy afloat. Although sales at retail chains have generally declined since July, the cold weather, combined with big discounts, helped turn chain-store sales around in October, giving rise to retailers' hopes.

Tom Williams, spokesman for Wal-Mart, the world's biggest retailer, said customers have increasingly been filling their carts with lower opening price points -- that is, items near the front of the store that have been heavily marked down -- during the last year-and-a-half.

"People are very value-conscious," Williams said, adding that shoppers also are waiting until the last possible minute to do their holiday shopping, a term commonly referred to as "buying close to the need."

The consensus among industry watchers seems to be for a mediocre Christmas with better-than-expected sales, but no blockbuster numbers. The kids certainly won't go without, but other family members and friends might.

"People are playing it very tight to the vest. Young children will get every present they want, but it's the Uncle Charlies and Aunt Marys on your list that get tossed out," the Conference Board's Smith said. "Obviously this is guessing, but you do have a defensive consumer."

Shoppers are being lured by good deals on computers and winter clothing, particularly at discount chains, said Diane Swonk, chief economist at Bank One. Swonk estimates a 4.3 percent growth in general merchandise sales this holiday season compared with just over 5 percent growth a year earlier.

"There's no question consumer spending is falling from the torrid pace of the third quarter because vehicle sales have slowed, but we don't think of those as Christmas items," Swonk said, noting that apparel is selling well. "One of the few places there has been pent-up demand in the economy is winterwear."

But retailers aren't taking any chances. They have been managing inventory all year, meaning supplies will be tight and heavy discounts are likely right out of the gate, Swonk said.

Analysts have been steadily trimming their forecasts for retailers' fourth-quarter profits since July, with many citing the recent West Coast port lockout as a major hurdle. Discount chains still are expected to outperform their department store competitors, which may be one reason why Wal-Mart's Williams is not overly worried.

"I think the one thing you can say about Christmas is that it always comes," Williams said. "We think it will be a good Christmas."