Consumables

What are 'Consumables'

Goods used by individuals and businesses that must be replaced regularly because they wear out or are used up. Consumables can also be defined as the components of an end product that are used up or permanently altered in the process of manufacturing, such as semiconductor wafers and basic chemicals.


BREAKING DOWN 'Consumables'

Stocks of companies that make consumables are considered to be relative safe harbors for equity investors when the economy shows signs of weakness. The reasoning is simple: people will always need to purchase groceries, clothes and gas no matter what is going on in the broad economy.

Many of the items measured in the basket of goods used to calculate the Consumer Price Index (CPI) are consumables; inflation in these items is closely watched because it can lower the discretionary income people have to spend on items such as cars, vacations and entertainment.

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