Dressed for Recess(ion)

In my previous post, I decomposed consumer expenditures to figure out which service sectors experienced the largest supply-side disruptions due to Covid-19. I illustrated that transportation & recreation services were the only consumer service to experience substantial and persistent supply shocks. Health, food, and accommodation services also experienced supply shocks, but quickly rebounded. Housing, utility, and financial services experienced no supply disruptions whatsoever.

What about non-durables?

Total consumption spending is the largest category of spending in our economy and is composed of services, durable goods, and non-durables. Services are the largest portion and durable goods compose the smallest portion. So, while there were plenty of stories during the Covid-19 pandemic about months-long delivery times for durables, they did not constitute the typical experience for most consumption.

Even though it’s not the largest category, many people think of non-durables when they think of consumption. Below is the break-down of non-durable spending in 2019. The largest singular category of non-durable spending was for food and beverages, followed by pharmaceuticals & medical products, clothing & shoes, and gasoline and other energy goods. Clearly, the larger the proportion that each of these items composes of an individual household budget, the more significant the welfare implications of price changes.

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Retailer Support for Consumer to Consumer

I was not going to post about consumer-to-consumer markets again, but one of my favorite brands has just set up a re-sale site.

M.M. LaFleur is what would happen if I moved to New York City and started a fashion company along with clones of myself, knowing that my consumers are me as a corporate lawyer. I have bought a few pieces from them that I like and wear to work. Even though I don’t plan to buy from them again soon, I enjoy getting their promotional emails.

I’m not a cynic, not when it comes to M.M. LaFleur or re-using consumer goods. I like that they are giving people a chance to reduce waste by getting unwanted clothes to new users. What they are doing is also good business. M.M. LaFleur is making it easier to clear out your closet and offering to pay you in credits to buy new stuff from them.

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