For those who don’t know, consumer goods are products that are sold to consumers. These products can be anything from cars to computers to clothes and everything in between. The term “consumer goods” can be used interchangeably with “durable goods”. Durable goods are items that last for at least three years. Consumer goods drive the modern economy and have been around for a very long time. In fact, we even have records of how much people spent on consumer good since the year 1000 BC! Below is a graph depicting how much people spent on durable and non-durable items:
In this graph you can see that as society became more affluent, durable good spending increased while non-durable good spending decreased. This illustrates how as society progresses there is more money available for purchasing better quality goods as opposed to inexpensive, disposable items such as paper plates or plastic silverware. In the past few years we’ve seen a huge spike in electronics sales due to their low cost and high functionality compared other durable consumer products such as cars or refrigerators. As technology advances each year there is less need for buying a computer every 3-4 years when one will do just fine until it dies! Technology has made it so that many electronics have extremely long life spans compared with previous generations of computers or televisions/radios/stereos etc. I use a hydro jug, but it’s not perfect.
As you can see on the graph, spending on durable goods has increased over time. However, it has decreased at a steady rate since 2008. Consumers are holding on to their durable goods longer rather than buying new ones all the time. This was due to how expensive consumer goods became in recent years as well as a bad economy during this time period. The recession made it so that people were less likely to buy items they didn’t need just because they wanted them. The recession also made the cost of new consumer goods skyrocket. People were more apt to save up and buy one high quality item instead of buying several cheaper items. Consumers became more aware of what they were actually spending their money on, and the price was not worth it for many people.
Types of Consumer Goods
Consumer goods come in many different shapes and sizes; however, there are four main categories: durables, nondurables, services and investment goods. Durable consumer products last longer than three years while nondurable consumer products last less than three years. Services include health care, childcare or any other service that is performed rather than a product being sold or shipped to consumers. Investment goods include intangible assets such as stocks or bonds which generate income over time through interest payments on investments such as loans granted by banks to businesses who need capital for business expansions etc…
Durable Goods – These are items that consumed over a long period of time without getting worn out easily compared with non-durable goods which can be used up in shorter periods of time because they are easily consumed or worn out due to frequent use or lack of maintenance/care/storage etc… Examples include cars, refrigerators etc… Non-durable Goods – These are items that get used up faster because they get worn out easily when frequently used due to improper storage/maintenance/use etc. Examples include a can of soda, a watermelon etc… Services – These are things that provide people with a service rather than a physical product. Examples include medical services, financial services or any other service that is not sold as an object to consumers Investment Goods – These are items which create income for investors over time through interest payments on loans granted by banks to businesses who need capital for business expansions etc… Examples include stocks and bonds.
How Consumer Goods Affect the Economy
Consumer goods drive the modern economy. You might be wondering how something like “cars” generates money in the world economy? It’s actually quite simple! Since cars are consumer goods, it means that people own them! They must pay money every month for car insurance, gas and maintenance (to name just some of the expenses). People also purchase new cars every few years or use their income to buy newer used cars each year depending on their budget. Cars bring in more money because they provide jobs at car factories as well as retailers where people go to make purchases such as buying tires or getting their oil changed (to name just some examples). The reason why consumer spending drives the modern economy is because most companies sell products that consumers want. When you look at your bank account statement you will see all sorts of charges from companies like Verizon Wireless, Comcast Cable Television and Apple Inc., among others.
Consumer spending drives the economy because people buy the things they want and need. In order for companies to succeed, they must provide products that consumers want or else they will not be able to sell their product. I love writing about subjects that I’m interested in, and consumer goods are something I really enjoy learning about!