October 2013 – Page 3 – Economic Thinking In Action

Rig count down from last year

The US drilling rig count lost 13 units to 1,743 rigs working during the week ended Oct. 11, Baker Hughes Inc. reported.

http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-rigcountsoverview

Earnings losses, fringe benefits multipliers, and taxable income

In earnings losses analyses which is relevant: total earnings or total taxable earnings?

A: Total earnings. Taxes and tax laws are subject to change. Additionally, fringe benefit values, such as those obtained from US BLS are based on earnings not taxable income.

Bottom line: tax treatments generally need to be backed out of income numbers when analyzing earnings losses.

U.S. T-bill yields down a little; bonds up

Rates for 1 month t-bill down 1 basis point to 0.25% in 10/10/13 trading.

Commercial loan delinquencies down to pre-recession levels

Commercial loan delinquencies (late loans and defaults) are less than half of what they were during the last recession; now lower than pre-recession levels of (1.5%).

Source: St. Louis Fed, FRED, Data series DRBLACBS

Differences between W2 and last paycheck

Generally, W-2 statements reflects taxable earnings while the check stubs and last pay statements reflect total earnings.

To convert from total earnings to taxable earnings, you need to subtract the nontaxable deductions, including parking deductions, FSA deductions (medical and dental deductions, flexible spending account deductions, and dependent care deductions) and retirement deductions (403(b), 457). These deductions are typically itemized in boxes 12, 13, and 14 of the W-2.

U.S. treasury rates drop a little; remain significantly higher than last week.

1 month T-bill still over twice the rate as a week ago.

Date	1 Mo	3 Mo	6 Mo	1 Yr	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
10/01/13	0.10	0.02	0.04	0.10	0.33	0.66	1.42	2.04	2.66	3.43	3.72
10/02/13	0.08	0.02	0.05	0.11	0.31	0.62	1.38	2.01	2.63	3.41	3.70
10/03/13	0.12	0.03	0.05	0.11	0.33	0.61	1.36	1.99	2.62	3.40	3.71
10/04/13	0.11	0.03	0.04	0.11	0.33	0.66	1.41	2.05	2.66	3.43	3.73
10/07/13	0.13	0.03	0.06	0.12	0.37	0.66	1.41	2.03	2.65	3.41	3.70
10/08/13	0.27	0.05	0.09	0.15	0.40	0.70	1.43	2.05	2.66	3.41	3.70
10/09/13	0.26	0.05	0.08	0.15	0.37	0.68	1.43	2.06	2.68	3.43	3.73

Women in Philosophy

Wages and Philosophy Ph.Ds awarded to women:

http://www.apaonlinecsw.org/data-on-women-in-philosophy

U.S. Treasury rates double overnight on 1 month bill: Notes on Treasury rates from Oct.8, 2013

Really short (1 month) term T-bill rates double overnight. Rates increase 14 basis points to 0.27% for a 1 month t-bill. The increase in yield reflects lower demand (Bond prices and interest rates are inversely related.). See the article cite below for more details on the Treasury market movements.