Economics In The U.S.A. -- Essay

Length: 4 pages Sources: 3 Subject: Economics Type: Essay Paper: #36632725 Related Topics: Economics, Finance Economics, Economics And Finance, Unemployment Rate
Excerpt from Essay :



Source: The Financial Forecast Center, 2009

Increases in unemployment rate mean that the gambling industry will be faced with fewer customers. This in turn will materialize in reduced sales and profits. If the situation continues to aggravate in the years to come, several players in the gambling industry might have to close their casinos. One must also notice the exceptional situations in which out of job individuals will gamble in the hope of winning some money. However, these instances are reduced and not able to modify the indirect relationship between the evolution of unemployment rate and demand for gambling services. Vice versa, when the unemployment rate decreases and the population enjoys more sources of revenues, the demand for the services of casino clubs increases.

2.3 Inflation rate (consumer price index)

The inflation rate represents the "percentage increase in the price of goods and services, usually annually" (Investor Words, 2009). Within the United States, the economic indicator has maintained a relatively stable trend, with insignificant fluctuations from one year to the next. 2008 has however commenced with a dramatic fall in the inflation rate and 2009 continues in the same path. For the future months however, it is expected that the interest rate increase.

Source: The Financial Forecast Center, 2009

When the inflation rate increases, the population is less able to satisfy its purchasing needs. This then means that a growth in inflation will negatively impact the financial results of the gambling institutions. Additionally, the players in the industry themselves will be faced with reduced purchasing power, meaning that their operating costs will increase and their ability to invest in the development of their organizations will also decrease. On the other hand, a decrease in inflation rates generates the opposite effects by increasing the purchasing power of both customers as well as economic agents.

2.4 Personal income

The personal income encompasses the totality of revenues registered by on individual throughout the course of one year and it is composed of all sources of income, including wages, pensions or revenues from investments. Throughout the recent decade, the trend has been an ascendant one, but...

...

Despite these reductions however, the economy is likely to pick up and generate increases in personal income starting with the end of 2009.

Source: iCharts, 2009

Increases in personal income will materialize in increases in customer demand and gambling revenues; a reduced personal income will have the opposite effect.

2.5 Interest rate

In the most simplistic formulation, the interest rate represents "a rate which is charged or paid for the use of money" (Investor Words, 2009). The distinguished trend throughout the past years has been that of a massive relaxation in crediting conditions and an increase in interest rates with the purpose of increasing the levels of consumption and stimulating economic progress. The effects were however more damaging than initially estimated and the current trend is that of decreasing the interest rates on borrowed money.

Source: The Financial Forecast Center, 2009

Given that the interest rate remain constant in the next year and a half, the gambling industry will benefit from a stabilization of the financial sector, which will in turn translate into its won stability and its customers' stability. It could probably mean an increased demand for gambling services.

2.6 Producer price index

The producer price index can be defined as "an inflationary indicator published by the U.S. Bureau of Labor Statistics to evaluate wholesale price levels in the economy" (Investor Words, 2009). The recent trend in the evolution of PPI has been an ascendant one with a peak in July 2008; after that, the indicator's value significantly decreased and despite some fluctuations, its future is expected to reveal sustained decreases through 2009, with the first signs of growth being revealed in 2010.

Source: The Financial Forecast Center, 2009

Increases in the value of the producer price index means that the gambling industry registered increased values of money for selling the same products. However, to reveal if the price increase is translated into real profits, the findings have to be adjusted to the inflationist trends.

References:

Ameristar Casinos Inc., Hoovers, 2009, http://hoovers.com/ameristar-casinos/--ID__16260,FRIC__ -- /free-co-competition.xhtml last accessed on May 8, 2009

Personal Income and Savings, iCharts, 2009, http://www.icharts.net/portal/app?service=external&sp=Y37ayiM=&page=Chartdetail last accessed on May 8, 2009

Investor Words,…

Sources Used in Documents:

References:

Ameristar Casinos Inc., Hoovers, 2009, http://hoovers.com/ameristar-casinos/--ID__16260,FRIC__ -- /free-co-competition.xhtml last accessed on May 8, 2009

Personal Income and Savings, iCharts, 2009, http://www.icharts.net/portal/app?service=external&sp=Y37ayiM=&page=Chartdetail last accessed on May 8, 2009

Investor Words, 2009, http://investorwords.com last accessed on May 8, 2009

The Financial Forecast Center, 2009, http://forecasts.org last accessed on May 8, 2009


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