Are concerned, those industries producing capital goods and consumer durables are typically

Hit hardest by recession.

Output and employment in nondurable consumer goods industries are usually less sensitive to

The cycle. Industries and workers producing heavy capital goods, farm implements, automobiles,

Refrigerators, gas ranges, and similar products bear the brunt of bad times.

Conversely, these “hard goods” industries seem to be stimulated most by expansion.

All sectors of the economy are affected by the business cycle, but in varying ways and degrees.

The cycle has greater output and employment ramifications in the capital goods and durable consumer

Goods industries than it does in nondurable goods industries. Over the cycle, price fluctuations

Are greater in competitive than in monopolistic industries.

This is all easy to explain.

Within limits, the purchase of “hard goods” is postponable. As the economy slips into bad

Times, producers frequently forestall the acquisition of more modem production facilities and the

Construction of new plants. As a result, investment in capital goods will decline sharply. When

Recession rolls around and the family budget must be trimmed, it is likely that plans for the purchases

Of durables such as major appliances and automobiles will first feel the ax.