Using the list of leading indicators in Table 1, write a brief paragraph explaining why each variable changes before real output changes. In other words, provide an economic reason why each indicator is expected to lead the business cycle.

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TABLE 1 Indicators of the Business Cycle Leading Indicators Average workweek Unemployment claims Manufacturers' new orders Stock prices New plant and equipment orders Coincident Indicators Payroll employment Industrial production Personal income Manufacturing and trade sales New building permits Delivery times of goods Interest rate spread Money supply Consumer expectations Lagging Indicators Labor cost per unit of output Inventories to sales ratio Unemployment duration Consumer credit to personal income ratio Outstanding commercial loans Prime interest rate Inflation rate for services