Consumer Cyclicals

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DEFINITION of 'Consumer Cyclicals'

A category of stocks that rely heavily on the business cycle and economic conditions. Consumer cyclicals include industries such as automotive, housing, entertainment and retail. The category can be further divided into durable and non-durable sections. Durable cyclicals include physical goods such as hardware or vehicles, while non-durables represent items like movies or hotel services.

BREAKING DOWN 'Consumer Cyclicals'

The performance of consumer cyclicals is highly related to the state of the economy. They represent goods and services that are not considered necessities, but luxurious purchases. During contractions or recessions, people have less disposable income to spend on consumer cyclicals. When the economy is expanding or booming, the sales of these goods rise as retail and leisure spending increase.

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RELATED FAQS
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  3. What is the correlation between term structure of interest rates and recessions?

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  5. What is the average length of the boom and bust cycle in the U.S. economy?

    The boom and bust, better defined as expansion and contraction, business cycles of the U.S. economy averaged 38.7 months ... Read Full Answer >>
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