Inflation No Match for Casino Wins: U.S. Gaming Industry Sees Historic Highs in 2023

U.S. commercial casinos hit a jackpot in 2023, raking in $66.5 billion from gamblers, the industry's most lucrative year to date. This figure represents a significant 10% increase over the previous record set in 2022, an impressive feat considering the economic challenges of the time, including persistent inflation affecting everyday costs like groceries and energy. According to the American Gaming Association, this surge reflects an unprecedented demand for gaming, spanning both traditional casino floors and online platforms. Even the holiday season, typically a time when consumers tighten their belts, saw record-breaking casino wins in December and the final quarter of the year, further emphasizing the robust appetite for gambling among American adults.

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Cash's Comeback: Investors and Corporates Bet Big Despite Rate Cut Delays

Despite predictions of its demise earlier this year, cash remains a powerhouse in the financial landscape. As the Federal Reserve postpones interest rate cuts, a robust influx of investment is evident in money-market funds, with investors adding a staggering $128 billion since the year's start. Corporate treasurers are also on a cash accumulation spree, holding a record $4.4 trillion by the end of the third quarter. This trend is further amplified by the market's seamless absorption of over $1 trillion in Treasury bills since mid-2023, signaling not just the resilience but also the potential for further growth in cash holdings.

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Leading Economic Index No Longer Predicts U.S. Recession -Conference Board

For the first time since the summer of 2022, the Conference Board's Leading Economic Index (LEI) no longer forecasts an impending U.S. recession, despite a continuous decline over the past 23 months. In January, the LEI fell 0.4% to 102.7, marking its lowest point since the brief recession in April 2020 triggered by COVID-19 and subsequent lockdowns. This change in outlook is attributed to positive contributions from six of the index's ten components over the last six months, signaling a shift away from recession predictions. However, expectations for economic growth in the second and third quarters remain subdued, with projections close to zero, indicating a stagnating economy rather than a contracting one.

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How Productivity Gains Could Shape the Fed's Inflation Battle

The Federal Reserve's journey towards achieving a 'soft landing' for the economy may be bolstered by a remarkable surge in productivity witnessed in the post-Covid era. Wall Street economists are optimistic that the trend of high productivity growth, which has seen an average increase of 3.9% over the last three quarters — a rate more than triple that of the decade before the pandemic — will persist. This productivity boost allows companies to increase wages without raising prices, potentially easing inflation concerns and allowing for a more lenient monetary policy stance.

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