From the course: Economic Indicators

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GDP: Consumption

GDP: Consumption

From the course: Economic Indicators

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GDP: Consumption

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- Have you ever heard people complain that we are a consumer society? Well, it's true, but if we weren't consumers, our economic growth would be pretty miserable. You see, about 70% of all U.S. economic growth comes from the consumption of goods and services. In fact, consumption is the most important part of U.S. GDP. If we were ever to stop being consumers, it would be an absolute catastrophe for our economic growth. Consumption is broken down into categories for different kinds of goods and services in the U.S. GDP report. This overarching category of growth is technically written in the report as personal consumption expenditures and the two main categories for this, logically enough, are goods and services. For goods, there are two main types that are important: durable goods and non-durable goods. Durable goods are items that should ideally last for three years or more and they're not consumed when you use them. Think about a car, washing machine, or a refrigerator. Those are…

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