Reference no: EM131564511

Business cycle indicators

Identify whether each of the following is a leading, coincident, or lagging indicator for a business cycle.

Indicators

Leading

Coincident

Lagging

Personal income minus transfer payments =Coincident

Prime rate = leading

Money supply = leading

Consumer expectations = leading

Delayed deliveries= leading

Labor cost per unit of output = lagging

Increases in new consumer goods orders tend to indicate that consumer spending will rise in the near future. This, in turn, means higher real GDP and higher industrial production. Therefore, increases in new consumer goods orders tend to be followed  by a rise in real GDP. In turn, a rise in real GDP tends to be accompanied  by increases in industrial production. As the industrial production increases, businesses will need more workers, and they will increase the number of new hires. Therefore, a rise in real GDP tends to be followed  by a decrease in unemployment