GALLUP, N.M. (AP) – Navajo silversmith Jackie Platero has been selling her family’s handmade jewelry for 18 years. These past two years have been the most difficult.

Platero and other jewelers and jewelry traders say the nation’s economic woes have hit them hard, as the cost of silver, gold and precious stones rise and fewer customers buy pieces. If that wasn’t enough, they say, they are increasingly having to compete against knock-offs of their jewelry – much made cheaply in Asia and Mexico.

“I just told the kids that Christmas this year is going to be a lot less than they usually get because the bills come first,” said Platero, a mother of 10 children who lives in the Navajo community of To’hajiilee about 40 miles west of Albuquerque.

Platero said she and her husband, also a jeweler, are thinking about taking on second jobs, perhaps at Wal-Mart, after the holidays.

No one really knows how big the Indian jewelry market is. Meridith Stanton, executive director of the Interior Department’s Indian Arts and Crafts Board, in a rough estimate says it could generate as much as $750 million in annual revenue.

Stanton said she’s seen evidence that the market for Indian jewelry has been hurt by the recession. Longtime arts and crafts events in California, Connecticut and New Mexico have closed. Meanwhile, smaller crowds are attending many events that have remained open. Artisans have had to downsize their works so customers can afford them.

“This period of time is a rough time for anyone. Any jeweler, any artist, is trying to adjust to leaner times,” she said.

For top jewelers like Al Joe of Dilkon, Ariz., the recession means scaling down to make pieces more affordable, but Joe said the best jewelry is still in demand. He sells pieces directly to galleries in Massachusetts, Washington, D.C., Albuquerque and Santa Fe.

“It’s more like a survival of the fittest that’s going on right now,” he said.

In Gallup, there’s a saying – perhaps exaggerated – that 80 percent of the world’s American Indian jewelry comes through the western New Mexico hilltop town. Whatever the figure, there’s no disputing that local traders who sell jewelry and other crafts, such as colorful wool rugs and pottery made by members of the nearby Navajo, Hopi, Acoma and Zuni tribes, are also feeling the pinch.

Traders say their wholesale business, which in the past has come from the East and West coasts and Texas, has fallen between 25 and 40 percent this year.

“We don’t have the numbers that we used to have. That’s because their business is down,” said Bill Richardson, the 91-year-old owner of Richardson’s Trading Co., which sits among a line of jewelry stores on historic Route 66.”They don’t need this stuff. What do you need this stuff for? You can’t eat it.”

Ellis Tanner, who founded Ellis Tanner Trading Co. in Gallup in 1967, said his wholesale business with traders in the East and Midwest has fallen by 80 percent. But trading with Japan and Europe has helped prop up his business, giving his store an overall 25 percent decline in its wholesale accounts.

“The last six months, it really started showing up,” Tanner said.

Stanton said one effect of the economic downturn has been positive for the Indian Arts and Crafts Board: More people are reporting complaints about fakes, made in sweatshops in the U.S. or imported from China, Thailand and other Asian countries and Mexico and being sold as handmade Indian jewelry.

“The fakes make it really difficult for Indian artisans and keeps them from passing their skills down from generation to generation,” she said.

For states like New Mexico, fakes hurt the tourist-based economy.

Perry Null, owner of Perry Null Trading in Gallup, said he’s glad New Mexico’s attorney general has been going after fakes but wishes the federal government would do more to enforce import laws already on the books. “It hurts a whole industry when people misrepresent anything, and then people get scared and they may not buy anything,” Null said.

Platero has a more subtle concern when it comes to fakes. Each stone, each design in her jewelry, has a higher meaning for her.

For example, turquoise symbolizes motherhood, coral keeps the wearer protected, arrowheads etched in the silver mean guidance and are good for children. The bear paw symbolizes brotherhood. When her pieces are purchased, Platero said, it’s like she sends a prayer with each customer, something the fakes can’t do.

The Navajo woman said proudly:” This is what we do.”