Consumer products that are expected to last a few years are called consumer durables. These include appliances, automobiles, TVs, etc. Consumer durables act as a bellwether of economic cycles.

Consumer products that are expected to last a few years are called consumer durables. These include appliances, automobiles, TVs, etc. Consumer durables act as a bellwether of economic cycles. During recessions, people reduce their purchase of consumer durables due to two basic reasons; one is the fact that these are usually higher priced products. Recessions leave most people with less cash and higher uncertainty. Thus the purchase of these higher priced goods will decline. Second; by their nature, consumer durables last a few years, so during periods of uncertainty, people tend to use these products a while longer without significant loss of utility. By the same token, during recoveries, demand for consumer durables rises, reflecting higher income and confidence levels.

New orders for consumer durables were running between $34b to $36b per month during the economic boom of 2003-2007. The Great Recession crushed this category down to around $20b per month by June 2009. This was 35% below June 2008 and 47% below the March 2003 highs for this index. New orders for consumer durables has been rising at a healthy pace since June 2009. In March 2012, this indicator rose by 38% above its June 2009 lows, however, it is still 27% below its March 2003 highs. Economic recovery along with low interest rates are slowly persuading consumers to get back in the consumer durables market.