report" with tyler mathisen and susie gharib. >> good evening, and welcome to a special edition of "nightly business report." i'm susie gharib. >> and i'm tyler mathisen. spring is a time of renewal, a time of hope, a time when the weather warms and we put winter in the rear view mirror. the overarching question for the first several months has been did the severe weather during the winter really hamper economic growth or are things worse than we think? >> spring is here finally and signs are starting to take route. we're seeing a rebound in some of the economic data and retailers are seeing improvement but are betting on a strong

spring to erase the chill winter put on sales. tonight we'll look at whether the winter is gone and the economy can start to kbrgrow. >> will it fire on all cylinders? and a key engine is the labor market. this week janet yellen said the recovery in the labor market has been exceptionally slow. despite that many are encouraged that the trend is headed in the right direction. hampton pearson starts with a look at why there's hope for an economic spring thaw. >> reporter: springtime hiring is in full bloom. just last week first time unemployment claims hit a seven-year low, dropping by 32,000 to 300,000 on seasonally adjusted basis. a jobs report showed employers adding 192,000 jobs to the economy, enough for a complete recovery of all 8.8 million jobs lost during the recession that began in 2008.

that's according to the bureau of labor statistics. leading economists say people who had given up looking for work are coming back into the job market. >> we're beginning to pull those people back into the labor force and we're not causing a big increase in the unemployment rate. . they are not only able to look for work but find work. >> auto sales rose 6% last month topping 1.5 million vehicles. the biggest monthly gain since last fall. as well as construction, hiring up 20,000 in march, the best move in the last three months. treasury secretary jack lew says there's a potential for a bigger construction boom in the housing sector. >> we have seen housing values return in a fairly decent way. we haven't seen as much progress in new starts and in construction. that's a potential for another boost to the economy. >> as the rebound in springtime construction moves into high

gear, the hope is more jobs leads to more wages and a rebound in consumer spending. for "nightly business report," i'm hampton pearson in washington. let's turn to diane for his outlook for the u.s. economy. she's chief economist. hi, diane. i'd like to start talking to you about the job market. we got a survey from the federal reserve this week saying that a lot of people feel their chances of getting a job are a lot better. are we going to see spring hiring? >> we are going to see spring hiring. we are also going to see a catch-up to winter slowdowns that we saw. many parts of the country that suffered the worse is we saw people hibernate. we also saw people migrate. vacations have surged and in the federal reserve report this last week we saw that there's a lot of ski resorts seeing a lot of strong bookings, some of the

best winters they have seen. people are scrambling to do anything they can to shake off the winter dull drums. that's going to increase hiring at amusement parks. we want to see the shift to higher quality jobs in the manufacturing and construction and i think we're going to see that as well. we're seeing construction come back, not as rapidly as we would like. and i think construction will do better than overall home sales do because we really have a lack of inventories out there and we're finally starting to see some activity there as well. >> i was one of those hibernato hibernators. i just woke up and am a little cranky. if you had to put a grade on the economy as you look forward into the summer months, what would that grade be right now? >> that's a great question. i was one of the kids that strived for a's. so anything less than an a was considered horrible in my household. that said, we were sort of in a c to c minus economy.

we're moving to a b, b minus economy. it's not as good as it should be and janet yellen said we've made progress, but it's not enough. of the jobs we e created, most were low-wage jobs when the bulk of the jobs we lost were in higher wage. and it's not the number of jobs we create, but the quality of the jobs we create as well. >> so we know that when people have jobs, they feel much better about taking those vacations, as you were talking about, or spending money. will we see consumers spending given what's going on in the job market? >> we're going to see uneven consumer spending. it's reflecting income inequalities and also where the pent up demand is. we had vehicles that are old and being scrapped at a record pace, they also were hit hard by the winter and being replaced at a record rate. you see vehicle sales pickup

quite substantially. you also have an ability to use home equity line where is you couldn't to add on to your house. not as many people are willing to trade up or qualify for a new mortgage, but it's easier to qualify for a home equity line of credit and people are going to be doing that remodelling. big ticket spending in that area where you haven't seen it for some time. it's not as much as we want, but you are going to see some real big ticket spending. on the other side, you have a lot of consumers still moving out of the middle of the market, down the retail u food stream and into discounters and you don't have a lot of apparel sales. apparel has been a difficult area because you have d demographi demographics, the birth rate has fallen, not as many kids entering into school, but also older workers just don't need as much of a new wardrobe.

unfortunately up until recently, many of the jobs we're creating, we're creating uniform jobs. >> i'm going to ask you a long question, but ask you to give you a short answer. >> that's not possible. >> how concern rd you as an economist about income inequality in the united states? >> very concerned. it's actually one of the number one concerns i have today. >> diane, that was a hard question to answer, short, but you just did. thank you very much. >> diane, have a great weekend. >> while u the data will continue to give us clues about the health of the economy, corporate earnings reports will show us the impact of winter, but they could also provide insight into the future. dominic choo takes a look. >> reporter: the winter chill is give i giving way to warmer spring weather. and that means the economy may be starting to heat up. over the last few months, the numbers haven't been great. questions have come up about the housing recovery, consumer spending and even corporate profits just to name a few. after all, if it's too cold and

snowy, home builders aren't breaking ground on new homes. consumers are having a hard time getting to the malls and companies see a drop offoff in business. that means lower profits. but it's not all doom and gloom. >> for the small number of earnings who have gotten year to date, for the first quarter we have seen revenues not doing as well as people might have hoped. i do think some of that is due to the weather and there's no reason to expect that will be sustained as we move forward because the fundamentals are in place for the u.s. economy to do quite well. >> if that's the case and the bad weather effects are a temporary phenomenon, that means this winter could be a speed bump on the way to an economic recovery and a better economy means better profits. >> at the end of the day, there are earnings. we do have an expanding economy and we do have improving macroeconomic numbers here in the united states which tend to support the story that earnings should continue to grow. keep in mind, cash on balance

sheets has never been this high. corporate america has never been in better shape. >> reporter: a key part of the story will lie with the american consumer. the bulk of the u.s. economy is driven by consumer spending. for that reason, some money managers are investing in stocks that capitalize on that spending theme. >> the two stocks i like in that environment and the environment for the next couple of months are macy's and target. >> reporter: so it comes down to this. if consumers spend all that money they didn't spend during the winter, it could bode well for corporate earnings in the coming months. for "nightly business report," i'm dominic choo. >> what do these trends mean for the stock market? our chief market strategist joins us. bob, thanks for joining us. we have been talking a lot about the winter thaw and spring blooming and all of that. what about the stock market? are we going to see spring

fever? >> you're seeing that right now. the market is coming back off its lows and i think there's a potential for this market to even reach about 1960, but i think there is going to be periods of resistance. certainly there's going to be questions about earning season, about what that's going to do for the full earnings year forecast. there's a potential for the earnings forecast to be taken down a little bit. if we don't see that consumer spending or business spending pickup as the year continues to move forward. i'm optimistic. i believe you're going to see a resumption in business spending from corporations. the companies, if you think about it, have taken the easiest path to the return on investments. they have bought back their older bonds, they've bought back shares, they have refinanced, they've increased their dividends, they've moved forward as far as they can. now they have to start planning for the future.

capital expenditures means more spending in the overall economy, a resumption in growth and that's going to happen later this year. >> bob, you raise a very interesting point there. companies have engaged in a lot of financial engineering to get their earnings per share up. they have done a lot of buybacks. it's harder to engineer re knews. earlier this week we saw shy revenues from ibm and google and several others. where's the organic growth going o come from? >> i think it's going to come from new products. the report that we saw earlier this week with google is interesting. people are questioning google's focus. are they moving in the right or wrong direction? but at the same time, people question what apple is doing with their cash. that's the kind of market that has to be created going forward in this country. not focused on what's already been in place, but create that opportunity for themselves.

that's what opportunistic companies do. that's what's going to drive this market going forward. that along with capital expenditures, a return to a more normalized interest rate environment. once we get away from the artificially low interest rate environment that the fed has created, banks are going to be more willing to lend. jamie dimon is not going to be interested in a mortgage loan for 3.25%. i may be more interested in at 4.5%. >> bob, as investors start sorting through companies and going after the ones with good fundamentals and real profits, what does that mean for the overall trend in the markets? are we going to see this volatility, big rallies and a big correction? >> there's a potential for this market to continue to have this volatility, this extreme volatility, when you come off a year and you're going to have an economy that's just barely

moving forward above trend, that brings with it that volatility. there's going to be a question about what happens with interest rates. when janet yellen spoke about it, there was a market panic to some degree. but i think that raising of fed funds rate is quite a ways off in the future, maybe a year off. that's going to be just fine. but when we get to the end of easing, the end of tapering, there's going to be questions about what happens with the interest rates and that's going to be your best opportunity to get into the stock market, to make your plans, to be opportunistic, to get involved with the companies like industrials, technology, financials, that's your best play in this market. >> all right, thank you so much, bob. chief market strategist of danny and partners. if jobs are one of the economic engines, housing and the consumers are the other two. how they are holding up as the weather heats up, that's next.

lingering winter weather means that the market hasn't gotten off to a running start. first it was the weather. now though increasingly the blame is going to a tight mortgage market. so tight that it's keeping many potential buyers locked out of homeownership. our real estate reporter has the story u. >> reporter: the signs of spring are finally here including more of these signs. but so far word on the street is

this spring housing market is underwheming. >> the market divides into the haves and have notes. you have the people who have good credit, good jobs, that's the move-up buyers. they are buying. >> but the rest of the market is not. first-time buyers and those with lower credit scores, that's more than half of potential buyers. you see it in the mortgage numbers, lending volume down to the lowest level in 14 years according to a new report from black knight financial services. only about 30% of 2013 loans went to borrowers with a credit score below 720 and nearly half of all home sales are now in cash. >> the credit center is not happening. it's not on the table. and it's really still that threat of what happens to mortgage if a mortgage goes bad. >> reporter: lenders are still spooked by the housing crash, which cost them billions of dollars in payments back to fannie mae, freddie mac and the

fha. >> a lot of bankers are saying i never want to service a defaulted loan again. which means i won't originate it. >> reporter: mortgage analyst paul miller has been revising his numbers down for mortgage volume every month. he's at $1.1 trillion worth. compare that to $1.9 trillion many 2013. >> the bigger guys are not going to do it. that's where you get the marginal borrowers. that's how you give them credit. >> wells fargo said it would start offering loans to those with lower scores, but only through the fha and only through their own retail channels. it's a very small share and a far cry from the days of sub prime lending. >> after a long season of cold, snowy weather in most parts of

the country, retailers were feeling the brunt of old man winter. many of those companies are now betting on an extreme case of spring fever. >> reporter: this year has been harsh for retailers with severe weather winter keeping shoppers at home, cranking up the heat, subs subsequently cutting into budgets. with spring weather slow to sprout and easter landing three weeks later, wall street had low expectations for retailers march sales. however, costco managed to surprise to the upside with sales gaining 5%, shopper traffic also up 5% for the month. though analysts say recently costco is a rare, steady standout. >> shoppers went and bought groceries to stay at home. we have the easter effect, which benefitted one more day in the month of march and helped sales for costco. >> reporter: the retailer that owned victoria's secret saw march sales fall 1%, better than

expected but certainly not inspiring. analysts think they are going to have to increase those promotions to clear some of the inventory that didn't sell. that's helpful for consumers looking to fill easter baskets and spring wardrobes. >> the month of april consumers will see a boost from tax returns and also usually find that historically the month that easter false in tends to perform very well as consumers go back and buy new spring merchandise at full price. shoppers have stayed at home for the past few months. >> reporter: leaving retailers and investors hanging hope on the easter bunny. patrick joins us with his outlook for retail sales and consumer spending. good to have you with us. who is spending this spring and where are they spending? >> well, as you just talked

about, the numbers were not so great in march. we have this easter shift, easter is three weeks later this year than it was last year. so it's not easy to get a read on the consumer. we're coming out of a tough winter and there was some hibernation going on there. it was a terrible fourth quarterback for most retailers, one of the worst i have seen in my -- i don't know, 15 years or so of covering retail stock. it's not easy to get a read on the consumer. there aren't a lot of bright spots out there. we have seen some weakness in some of the stalwart areas like the dollar stores. family dollar reported last week they had a 4% decrease in their same store sales in the most recent quarter. it's not a great environment. i think we'll see a bounce, but we haven't gotten it yet. >> you mentioned about dollar stores and courtney in her piece was talking about good business at costco. when you look at the retail sector, which are the kinds of companies that are doing well and which ones are struggling?

>> well, within my space, i cover discount retail so i cover the low end of retail. and the sector that's continued to perform pretty well is off-price apparel, so that's tgx and when i try to gauge traffic the one that jumps out tends to be tj max. there's continued strength in that area. and then we have costco, the drugstores have been doing pretty well, but that's not the front end. that's the pharmaceutical side of the business. and home improvement has been doing pretty well with home depot. those are your bright spots. on the weaker end, as we all know, the name brands have been weak, american eagle. >> my wife just can't get enough of home goods. she's in there at least once a week. heavy something that speaks to

her. can you take me through the two big ones, target and walmart, whether you cover them or not, where do they fit in today's retail environment? >> sure, and i do cover both of those stocks. so walmart had four quarters of negative same store sales in 2013. and i'm looking for flattish comps in the current quarter. so not looking for much of a change there. the big issue for them has been store traffic, which has been down at their core business, which is the walmart supercenter business. target has had a different set of issues. they have had weak traffic trends, but they have also been dealing with canada, which they went into in a major way and it's been a tough endeavor for them. and they are coming out of this -- the data breach over the holidays. that has really hurt their business.

the outlook isn't that great for either company in the near term. >> what is it going to take to change the mood of the consumer? you said it's been a rough winter and all of that. what has to happen over the next couple of months to put consumers in the buying mood, in all of your experience, what are the usual trends? >> certainly it would be nice to have the employment market heat up a little bit more. the jobs numbers have been okay, but not great. that lower income consumer still feels like they are in a recession. they haven't really come out, so some jobs growth would be nice. i know the housing market has slowed a bit more recently. maybe a bounce there would help. the other thing that hurt business last year frankly was washington. and if we get some more stabilization and clarity about policy, that will help the consumer this year. >> patrick, i'll see you in the parking lot at home goods, okay? i won't be inside. patrick, retail analyst, thank

you for being with us. >> coming up next, high school graduations are right around the corner. that means college is next. how students and parents are finding new ways to pay for higher education. we have been talking about the economy and the consumer, but it is mid-april and that means thoughts turn to college. the bad news, a sally may study found families spent $21,000 on college costs last year. that is among families that had those costs. the good news, the bulk of college costs are paid with

scholarships and grants. 27% of the tab paid by student and parent loans with the same percentage coming from parents' incomes and savings. one more bit of good news, sally may says total average savings for college tops $15,000 this year and that is up 30% from just last year. since a college education is an expensive proposition, students and parents are looking beyond loans and scholarships to help pay for that degree. >> reporter: for many students, it's not all-night study sessions or a strange roommate that frightens them most about college, it's paying for it. >> when we're 18 years old, we're a little too young to make the decision to take on a lot of student debt. >> reporter: those fears spawning new approaches to college funding. funding like peer to peer loans pr companies like lend key. though financial aid experts say those loans are hard to come by. >> most of the students who try peer to peer lending do not get

funded and those who do don't get fully funded. >> reporter: open courses touted too as a way to cut costs. students would get credit for taking cheaper online course, a promising idea that's yet to pay off. >> very few students complete and stick with it to the end of the course. of those very few earn credit from the program. >> reporter: this year the cost of tuition and room and board topped $40,000. a public school for an out of state student cost $32,000. it was $18,000 for a student in state. these increases prompting some states to explore new ways for students to pay for college after they graduate. under these proposals, students would pay part of their income back to the state for a set number of years. >> a lot of these proposals need

to have the rough edges smoothed out. >> reporter: in the interim, a few ways are cited to cut the costs. find scholarships and grants before you take out a loan. go to a school in state. and live like a student when you're a student so you won't have to once you graduate. cut backen eating out and trips home and work if you can so you won't be working for years to pay off the debt. for "nightly business report," i'm mary thompson. >> that's it for this special spring edition of "nightly business report." i'm susie gharib, thanks for watching. >> have a great weekend, everyone. happy easter and we'll see you monday.

>> this week's puzzle. sorting out the politics of healthcare and campaign money. and the scourge of domestic terrorism. tonight on "washington week" that all ed today illegal armed groups must be disarmed. that all illegally seized buildings must be returned to their legitimate owners. and that all illegally occupied treets, squares and other public places in the ukrainian cities and towns must be vacated. gwen: diplomats may have agreed but that is not the end of the story. with russian troops still massed t the border and ukrainian government holding ground the standsoff is far from over. n washington the president stakes o