Consumer Durables: What Part of Retail Sales Are They?

What Are Consumer Durables?

Consumer durables, also known as “durable goods,” are a category of consumer goods that do not wear out quickly and therefore do not have to be purchased frequently. They are a part of core retail sales data and considered durable because they last for at least three years, as defined by the U.S. Department of Commerce. Examples include large and small appliances, consumer electronics, and furniture and furnishings.

Their opposite is a nondurable good, which has a short shelf life, defined by the U.S. Department of Commerce as less than three years. A nondurable good has all of its economic value consumed soon after production or purchase. Examples would be perishable food products, such as milk, vegetables, meat, and fruit, and products made of paper and paperboard, such as newspapers, books, magazines, marketing mail, and tissue paper. A number of them are used in recycling.

Key Takeaways

  • Consumer durables, also known as “durable goods,” are goods that do not need to be purchased very often and last for at least three years.
  • Economists keep a close eye on the consumption of consumer durables, as it is considered a good indicator of the strength of the economy.
  • Examples of consumer durables include appliances such as washers, dryers, refrigerators, and air conditioners; tools; computers, televisions, and other electronics; jewelry; cars and trucks; and home and office furnishings.
  • Nondurable goods, as defined by the U.S. Department of Commerce, have a shelf life of less than three years; a number of them can be recycled.
  • Examples of nondurable goods include perishable food products, such as milk, vegetables, meat, and fruit; products made of paper and paperboard, such as newspapers, books, and magazines; trash bags; disposable diapers; and towels, sheets, and pillowcases.

Understanding Consumer Durables

Durable goods derive their name from the fact that they last in value for a relatively long time. An individual’s wealth is preserved by spending a high proportion of their income on durable, investment, or capital goods, because the goods retain their economic value for longer periods of time.

Investors, business owners, and economists keep a close eye on expenditures and new orders for consumer durables as a sign of sustainable economic growth. Durable goods consumption leads gross domestic product (GDP) over the business cycle. When durable goods is above its trend, then the GDP is also likely to be above its trend in the next quarter.

Types of Consumer Durables

Some examples of consumer durables are large and small appliances, furniture and furnishings, carpets and rugs, rubber tires, lead-acid automotive batteries, consumer electronics, luggage, sporting goods, and household goods.Automobiles and mobile homes are also durable goods, along with boats and fine jewelry.

Consumer Durables vs. Nondurable Goods

The basic difference between durable and nondurable goods is that the former last for three years or more, while the latter are used up in fewer than three years. Also, durable goods maintain their economic value much longer than nondurable goods.

Durable goods tend to be more expensive than nondurable goods, so people usually invest in them when the economy is good and they are feeling prosperous. Nevertheless, consumer spending on durable goods rose during the COVID-19 pandemic (after a brief but sharp contraction), which battered the economy. Lockdowns and social distancing reduced the demand for services, while government subsidies intended to help people weather the crisis financially increased disposable income.

Categories of Consumption

In the second quarter of 2022, expenditures on consumer goods accounted for more than 68.4% of U.S. gross domestic product (GDP). Consumer goods are broken up into the broad categories of nondurable goods, durable goods, and services. Personal consumption is distinct from private domestic investment, which is expenditure on capital used to produce consumer goods. This can include tools, factories, machinery, and residential structures, .

As of July 2022, expenditure on consumer durables accounted for nearly $2.17 trillion in spending. One of the main drivers of growth in this sector is transportation, such as motor vehicles and commercial jets. Transportation and defense orders are generally omitted from headline economic figures due to their greater volatility. Computers and electronic products have also been the main drivers of growth in the consumer durables sector in recent years.

Examples of Consumer Durable Goods Companies

Some of the largest publicly traded consumer durables producers, by market capitalization, include Kimberly-Clark Corporation, ABB Ltd., Johnson Controls, Clorox Company, Mohawk Industries, and Whirlpool Corporation. These companies are divided into the sub-sectors of containers and packaging, electrical products, industrial specialties, specialty chemicals, home furnishings, and consumer electronics/appliances, respectively.

What Are Some Examples of Consumer Durables?

Consumer durables are products that last for three years or more. They include mobile homes, large and small appliances, furniture and furnishings, carpets and rugs, automobiles, rubber tires, lead-acid automotive batteries, boats, consumer electronics, luggage, sporting goods, household goods, and fine jewelry.

What Is the Difference Between a Durable and Nondurable Good?

The principal difference is that while a durable good lasts for three years or longer, a nondurable good is used up in fewer than three years. In addition, durable goods hold their economic value for much longer than nondurable goods.

Why Are Durable Goods Important?

The purchase of consumer durables is considered an economic growth engine. Sales of durable goods accounted for more than 68.4% of U.S. gross domestic product (GDP) in the second quarter of 2022. As of July 2022 that mounted up to almost $2.17 in spending.

The Bottom Line

Consumer durables are goods with staying power. The U.S. Department of Commerce defines them as lasting for three years or more, unlike nondurable goods, which are used up in less than three years. Consumer durables hold their economic value better for longer, and the sale of them drives the U.S. economy. When the sales of consumer durables are up, it generally forecasts a rise in the GDP in the next quarter, because consumers tend to invest in them when they are feeling prosperous.

Article Sources
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  2. U.S. Department of Commerce Bureau of Economic Analysis. "Durable Goods."

  3. United States Environmental Protection Agency. "Nondurable Goods: Product-Specific Data."

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  7. European Central Bank. "Consumption of Durable Goods in the Ongoing Economic Expansion." 

  8. Federal Reserve Bank of Cleveland. "Why Has Durable Goods Spending Been So Strong during the COVID-19 Pandemic?"

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  15. Mohawk Industries, Inc. "The Global Flooring Leader."

  16. Whirlpool Corporation. "Whirlpool Corporation Poll Reveals What Consumers Really Want—Innovations That Improve Life at Home and the Planet."

  17. The Clorox Company. "Putting People at the Center of Everything We Do."

  18. Johnson Controls. "Johnson Controls Ranked Among World's Top 100 Most Sustainable Corporations."

  19. ABB. "The New ABB."

  20. Kimberly-Clark. "Innovative Kimberly-Clark Recycling Program Helps Two Midwestern Universities Turn Used Gloves Into Eco-Responsible Durable Goods."

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