What are Consumer Durables?
Consumer durables are a category of consumer products that do not have to be purchased frequently because they last for an extended period of time (typically more than three years).
How Do Consumer Durables Work?
Consumer goods are divided into two categories: durable goods and non-durable goods.
Durables have an extended product lifespan and are not worn out/consumed quickly when you use them. Since they're made to last and do not need to be replaced frequently, durable goods are typically more expensive than non-durable goods (which have to be purchased repeatedly).
Examples of Consumer Durables
A washing machine is an example of a consumer durable good. It takes many years and multiple uses to wear it out. The laundry detergent used in the washing machine, however, is a non-durable good. It's a product that is used regularly and needs to be purchased several times every year.
The Importance of Consumer Durables
Consumer durables make up a portion of sales in durable goods. The increase and decrease in the sales of durable goods is an important economic indicator. That’s because durables (including consumer durables) usually represent big-ticket items. Consumers typically make these purchases when they are confident they can afford them.
Before a recession – when consumers have less confidence in the economy – there's a sharp drop in the sales of durable goods. This is important to remember when investing in companies that produce durables and when analyzing the current economy. You can review the current sales of durable goods on the Census Bureau's monthly "Durable Goods Orders" report.
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