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The Headmaster Ritual

JACKSON HOLE, Wyo. -- Sing.

Sing out loud.

Sing out strong.

For the

durable goods

numbers were

released earlier today.

Slicing and dicing shows that the February figures point to a first-quarter business equipment spending profile about the same as one that prevailed when January numbers were released a month ago. They also keep equipment spending on a path to add much more to growth during the current quarter than it did during the fourth.

Shipments of nondefense capital goods excluding airplanes fell 2.9% last month following a 5.9% increase in January. They will post (assuming no change in March) a first-quarter (annual) increase of 17.6%; compare that to the 17.1% that looked likely a month ago and the 1.3% increase they turned in during the fourth quarter.

Equipment spending added 0.46 percentage point to growth during the final quarter of 1999. The

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gross domestic product

figures to be released toward the end of April are likely to show that it added substantially more than that -- more even than the 1.09 points it's been adding (on average) since 1996 -- during the first.

Four side notes.

(a) Shipments of airplanes are included in the GDP number, though the figures we see in the durables release are not the same ones used in its calculation. The folks at the BEA, who put the GDP report together, prefer to do their own seasonal adjustment on that front.

(b) Business equipment consists of information processing equipment (including computers and peripherals, software and, as always, other), industrial equipment, transportation equipment, and (again) other. (These numbers are laid out in Table 3 of

every GDP release.) The shipments series referenced above tracks it pretty well.

(c) New orders for nondefense capital goods excluding airplanes are on track to rise roughly 13% during the first quarter; unfilled orders for same are on track to rise as much as 19%. This suggests that the robust underlying trend we now see in shipments -- they've accelerated to a 12.3% year-on-year pace from 3.2% over the past eight months -- is likely to remain in place through the second quarter.

(d) A 1-point-plus contribution from business equipment and a 5-point (or thereabouts) contribution from personal spending means that another big GDP print is on the way. The first-quarter number will be released on April 27.

Good weekend.

Side Dish

Well at least the bruins covered the spre... oh. Never mind.

They couldn't even come within 20.