Consumables

AAA

DEFINITION of '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.


INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Customer Service

    The process of ensuring customer satisfaction with a product ...
  2. Inflation

    The rate at which the general level of prices for goods and services ...
  3. Discretionary Income

    The amount of an individual's income that is left for spending, ...
  4. Basket Of Goods

    A relatively fixed set of consumer products and services valued ...
  5. Consumer Cyclicals

    A category of stocks that rely heavily on the business cycle ...
  6. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket ...
Related Articles
  1. Consumer Spending As A Market Indicator
    Markets

    Consumer Spending As A Market Indicator

  2. The Disposable Society: An Expensive ...
    Credit & Loans

    The Disposable Society: An Expensive ...

  3. Cyclical Versus Non-Cyclical Stocks
    Options & Futures

    Cyclical Versus Non-Cyclical Stocks

  4. Evaluating Grocery Store Stocks
    Economics

    Evaluating Grocery Store Stocks

comments powered by Disqus
Hot Definitions
  1. 80-10-10 Mortgage

    A mortgage transaction in which a first and second mortgage are simultaneously originated. The first position lien has an ...
  2. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific ...
  3. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  4. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  5. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center