Publication 06/ 02/2018 - Consumption of durable goods in the ongoing economic expansion - By Maarten Dossche and Lorena Saiz
Household spending on durable goods is the part of private consumption that is most sensitive to the business cycle. Private consumption encompasses services, non-durable goods, semi-durable goods and durable goods. Durable goods typically have an expected lifetime of more than three years, whereas semi-durables and non-durables have a shorter lifetime.1 Households do not derive utility directly from spending on durable goods in the current period, but rather from the flow of services they provide over their lifetime.