FILE Economists often look at retail sales data to gauge the state of the economy. This is especially so in a recession year, when consumer spending has decreased.

Consider the follow ing table, which shows U.S. m onthly nom inal retail sales for 2009. Sales are measured in m illions of dollars and have been seasonally adjusted. Also included in the table is the corresponding producer price index (PPI) for 2009. The data set can also be found on the text website, labeled Sales 2009.

Month Sales PPI Month Sales PPI January 340,439 171.2 July 342,489 171.6 February 342,356 170.9 August 350,800 174.1 March 339,228 169.6 September 343,687 173.3 April 338,344 170.6 October 347,641 174.0 May 339,873 170.6 November 354,467 176.6 June 342,912 173.7 December 353,817 177.3 Source: Federal Reserve Bank o f Dallas.

a. How many times were nominal sales below that o f the previous month?

b. Use the PPI to compute the sales in real terms. How many times were real sales below that of the previous month?

c. Compute the total percentage increase in nominal as well as real retail sales in 2009.

d. Can economists feel optim istic about the economy based on the retail sales data?