Consumer Nondurables and Services

Categories: Index Funds, Investing

You’ve got durables...stuff that lasts a long time. The pyramids, Notre Dame cathedral, Tom Brady...and there’s the stuff you can buy: cars, refrigerators, jet engines, mail-order spouses.

Then you have nondurables. These are more disposable items...toothbrushes, razors, paper towels, plastic sporks, Tinder dates. They don’t last a long time. They're largely disposable. But they tend not to be very expensive.

Economists look at orders for durable goods as a good indicator of the strength of the heavy manufacturing sector. They look at orders for nondurables too, but take the number less seriously.

Demand for nondurables tends to remain steady even in times of economic stress. People still need (and can afford) things like toilet paper and Q-tips, even in the face of a recession. They may cut back, or buy cheaper brands...but the dip will be less pronounced than with durables.

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Econ: What are Consumer Nondurables and ...6 Views

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And finance Allah shmoop what Our consumer nondurables and services

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a durable and something that lasts a long time You

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know like the pyramids Notre Dame Cathedral Tom Brady and

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their stuff you can buy that lasts a long time

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Like cars refrigerators backhoes of jet engines Who When Elsa

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medieval torture devices for your basement All durable Well their

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products meant toe last at least three years Will you

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buy them today And you're likely to have them for

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the foreseeable future Then you have nondurables Well these You're

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more disposable items you know like toothbrushes razors paper towels

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plastic forks tinder dates L they don't last a long

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time And they tend Teo will not be very expensive

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right Like they're kind of throw away dollars services fall

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under a similar category as nondurables like get a haircut

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And now you're good for a few months Well maybe

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if you're these guys you're good for three years or

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more But usually you'll be back for a service in

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a short period of time Well economists look at the

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numbers related to durable and non durable goods differently The

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goal of economic statistics usually is to read Well what's

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going on in the economy And generally experts feel the

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stats for durable goods say a lot more about the

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economy than those for nondurable goods Right Like you have

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to think really hard about a very expensive durable thing

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You'll keep forever figures for durable and nondurable goods Both

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get reported on a monthly basis but the stat for

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durable goods orders gets far more attention than a similar

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readings for nondurables Even in bad economic times people can

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probably still afford things like raisers and toilet paper Let's

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hope aura as Este Lauder used to say You know

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a new lipstick but they might put off buying that

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new car or refrigerator or you know new pontoon boat

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So in recessions you might see a sharp drop in

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durable goods orders while nondurable goods remain in really stable

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Orders in the nondurable category might dip a little but

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the impact won't be a sharp right Well again people

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can put off those big durable goods purchases if they're

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looking to save money and then not so hopeful right

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now But maybe we'll be in the future something like

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that But the smaller nondurable goods are more immediate kind

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of hard to get along without him for any length

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times people just buy him good times and bad Meanwhile

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the economic performance of these stats are tracked in dollars

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The prices of the average nondurable is much less than

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the average price of a durable good right like razors

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cheaper than washing machines So the falloff in the durable

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goods stats will look even more dramatic So that's how

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things roll You might lament the disposable consumerist society You

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might think that the best thing would be to go

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to a mountaintop somewhere and spend your days meditating But

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when push comes to shove and the economy is in

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crisis well people will always choose their more disposable goods

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It's a stuff that gets us through the day Thank 00:02:54.695 --> [endTime] goodness I do

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