With parents already facing high food and gasoline costs and slumps in the job and housing markets, the turmoil in the financial sector could further spur them to cut their spending, focus on less-expensive toys and consider which toys will get the most use, experts say.

Most industry analysts agree that shoppers will cut back on gifts on adults before they stop buying toys for children.

The National Retail Federation trade group predicts holiday sales overall will rise a meager 2.2 percent, to $470.4 billion, the slowest growth since 2002. Toy experts predict the hottest toys will be items such as the Bakugan trading card game popular with boys, interactive toys such as Elmo Live and gaming consoles such as the Nintendo Wii.

''People will be on a budget this year,'' says toy analyst Chris Byrne of Timetoplaymag.com, ''and there will be less inclination to go outside that budget.''

Although Byrne says the toy industry is typically ''recession-resistant,'' this year also includes the presidential election, which could distract some shoppers, and five fewer shopping days between Thanksgiving and Christmas than last year. And because prices have risen 5 to 10 percent as toy makers face rising costs for commodities such as oil and resin, that translates to even fewer toys sold.

Until now, it has been a strong year for the toy industry, because recall-related fears faded and toys related to ''Iron Man,'' ''The Dark Knight'' and other superhero movies were strong sellers. But the holiday season, which accounts for the bulk of yearly sales, remains critical.

This year, the cost of a toy - and its perceived value - will count, analysts say. Executives at The Toy Insider, a trade publication that puts together a list of toys expected to be hot for the holiday season, considered including a $300 toy this year - they wouldn't say which one - but decided against it. Although the list has several items above $100, the group made a conscious effort to include lower-priced toys.

Retailers are focusing on value. Wal-Mart Stores Inc. and KB Toys have each cut prices already on popular toys - ranging from Mattel's Barbie to the Bakugan game - to $10 or less, and Target Corp. said it is offering $10 toys as well, ahead of the holiday season.

This season's hot list

* ELMO LIVE: A lifelike version of Mattel Inc.'s Fisher Price doll, which tells jokes, waves his arms and crosses his legs. For age 18 months and up, retails for $59.99.

* BAKUGAN: Spin Master's game popular with boys that includes magnetic trading cards and marbles that unfold into figures. For age 5 and up, retails for $4.99 to $24.99.

* FURREAL FRIENDS BISCUIT, MY LOVIN' PUP: Hasbro Inc.'s golden retriever whic barks and wags, and responds to six voice commands. For age 5 and up, retails for about $179.99.

* U-DANCE: Hasbro's motion-based dance game that connects to your TV and is both mat- and cord-free. For age 8 and up, retails for about $74.99.

* CLICKABLES: Techno Source's line features bracelets and charms that click together magnetically, and then can be used to upload information on DisneyFairies.com. For age 7 and up, retails for $12.99 to $29.99.

Source: Timetoplaymag.com's ''Most Wanted'' list and Toy Insider's ''Hot 20.''