Gross Domestic Product (GDP) is the final value of all goods and services produced domestically in a year, minus any trade deficit. It can also be interpreted as the sum of the total spending of its component parts. There are several components of GDP, and those include Consumer Spending (C), commercial and residential Investment Spending, Government Spending, and Net Exports (value of all exports minus the value of all imports). The largest component of GDP is Consumer Spending, totaling about 6.255 trillion dollars in 1999, or sixty seven percent (67%) of GDP. Like GDP, Consumer Spending (here after C) is also determined by several component parts. C is the sum of consumer spending on Durable Goods (DG: goods that can be stores and have an average service life of three years), Non-Durable Goods (NDG: storable goods with service life of less than three years.), and Services Spending (S: commodities that cannot be stored and must be consumed at the time of purchase). This paper will deal exclusively with the C component of GDP, and more specifically with the components of C and their changes from 1959 until 1999. I choose to use Nominal GDP for my analysis because the actual dollar values are less important than the changes in the proportions of the components relative to GDP. All of the data used in this paper came from, or was derived from the Economic Report of the President (February 2000), Appendix B, prepared by the Counsel of Economic Advisors (available online at *http://w3.access.gpo.gov/usbudget/fy2001/erp.html#erp4*).In the period from 1959 until 1999, Consumption (C) increased from approximately 63% of GDP to about 68%, with an overall increase of about 7.88%. However, the proportions of the components of C, namely Durable goods spending (DG), Non-Durable goods spending (NDG), and Services spending (S), do not seem to move in a corresponding way. Of the three components, NDG suffered a dramatic loss as a share ...
