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 following table, which shows U.S. monthly nominal retail sales for 2009. Sales are measured in millions 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.
a. How many times were nominal sales below that of 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 optimistic about the economy based on the retail sales data?