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What Are Durable Goods, Anyway?

Spot the durable good. Larry Crowe/AP hide caption

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Larry Crowe/AP

Orders for durable goods rose 2.2 percent in February, according to figures released this morning (PDF). Th AP has the details.

We have a simpler question. What's a durable good? Also: Why does it matter?

Durable goods, as the name suggests, are things that don't break easily. More specifically, they're products that are used for more than three years.

Planes, trains and cars: durable goods. The chair you're sitting on: durable good.

The carpet beneath your feet: not a durable good, despite the fact that most people keep carpet for more than three years. Carpet, clothing, and other fabrics aren't durable goods.

Some of the distinctions are pretty arbitrary. A wine glass is a durable good, unless it's made of plastic.

In general, though, durable goods tend to be more expensive items, and they tend to be the kind of purchases people and companies can postpone in a pinch.

If I buy a steak (not durable) it may just mean I'm hungry. But if I drop $500 on a fancy new gas grill (durable) to cook my steak, it suggests I feel pretty good about my economic prospects.

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Durable goods orders have risen for four out of the last five months. That's a sign that people and businesses are feeling less pinched, and more optimistic about the economy.