Transcripts

Eternal Economic Optimism

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: This is Erika Miller. Gas may be topping $3 a gallon in parts of the country. The housing market may be cooling off and the war in Iraq may be continuing. But none of that seems to be hurting consumer confidence.

ALAN SKRAINKA, CHIEF MARKET STRATEGIST, EDWARD JONES: People feel good about their job, their income, and the prospects for the economy. When they feel good, they spend and invest, and that`s good news for the market and the economy.

MILLER: The Conference Board`s index of consumer confidence rose to 109.6 in April. That`s the highest level in four years. Nearly everyone on Wall Street was expecting a decline. For now, consumers seem to be shrugging off high energy prices. But experts say that could change if gasoline prices keep rising.

LYNN FRANCO, DIRECTOR, CONSUMER RESEARCH CENTER, CONFERENCE BOARD: I think if prices at the pump continue to tick up, we`re going to see it take a little bite out of confidence. It`s still at a strong enough level that it`s not going to have a severely negative impact, but we could see a cooling in confidence and a cooling in spending.

MILLER: There was more good economic news today in the form of the existing home sales report. The National Association of Realtors says sales rose three-tenths of a percent to a 6.92-million-unit annual rate in March. Most experts had expected sales to slow as a result of rising mortgage rates. But there was one troubling sign: inventory of unsold homes hit a record. Experts say, taken together, today`s data suggests the economy is on solid footing.

SKRAINKA: It paints a picture of a relatively strong economy, one that has not shown any signs at all of slowing. And it also tells me that high energy prices are not going to kill this economy.

MILLER: Today`s reports are encouraging, but analysts say the news could be even better on Friday. The first look at gross domestic product in the first quarter is expected to show the economy grew at its fastest pace in two and a half years. Erika Miller, NIGHTLY BUSINESS REPORT, New York.