The Daily Money: Could lower inflation trigger a recession?

The Daily Money: Lower inflation could set off an economic downturn by narrowing profit margins.

Advertisement Read in browser The Daily Money ALL THE MONEY NEWS YOU NEED TO KNOW Mon Jan 22 2024 Daniel de Visé | Personal Finance Reporter Good morning! Did you make it through the Deep Freeze? We survived, although some aging water pipes in our neighborhood did not. It's Daniel de Visé with your Daily Money. Could the big inflation slowdown trigger a recession this year? On its face, Paul Davidson writes, the idea may sound laughable. Easing inflation has brought relief to consumers. And it has spurred Federal Reserve officials to signal they're probably done hiking  interest rates and tentatively expect to cut them three times in 2024. That has propelled the stock market to new highs. But some economists reckon the drop-off in price increases, combined with softening consumer demand, will narrow corporate profit margins. And that could prompt more companies to  lay off workers and spark a mild downturn. People walk by the New York Stock Exchange (NYSE) on January 19, 2024 in New York City. Stocks closed up over 350 points while the S&P 500 closed at an all-time high on Friday. Spencer Platt, Getty Images The stock market is up: It's a good moment to check your 401(k) balance The S&P 500 ended last week at a record high, Bailey Schulz writes, welcome news for Americans' retirement accounts. The benchmark index closed up 1.2% Friday to beat its previous record from January 2022. The Dow Jones Industrial Average, which surpassed its 2022 peak last month, also closed at a new record Friday, and the Nasdaq Composite climbed 1.7%. The milestones follow major stock market declines in 2022, Wall Street's worst year since the Great Recession. At the time, investors were concerned about high inflation, high interest rates and a potential recession, and the S&P 500 dipped about 20%. "It took more than two years, but the S&P 500 finally made it back to new all-time highs," said Ryan Detrick , chief market strategist at financial services firm Carson Group. "This is a great reminder to investors that although we've seen many worries and concerns over the past two years, investors are usually rewarded over time."  📰 More stories you shouldn't miss 📰 That's my bonus?! Year-end checks were smaller in 2023. Here's what to do if you got one. Pharmacy prices: Looking for a deal on that expensive prescription drug? We've got you covered. Fun with the Census: Who spends the most on groceries each week (and who pays the least)? Census data has answers Consumer news: FTC tied up in legal battle, postpones new rule protecting consumers from dealership scams 🍔 Today's Menu 🍔 Attention, cocktail-party patrons: The Centers for Disease Control announced last week that a recall of charcuterie meats for Salmonella contamination has been widened, including a new brand sold at  Costco. The recall has been expanded to include all lots of the "Busseto Foods Charcuterie Sampler" sold at Sam's Club and all lots of "Fratelli Beretta brand Antipasto Gran Beretta" sold at Costco, James Powel writes. The outbreak has sparked 23 new illnesses and five new hospitalizations, bringing the totals up to 47 and 10 respectively across 22 states. The Center warned that these numbers are likely undercounts. The CDC recommends that all packages of the affected products should be thrown away and that any surfaces that have come into contact with the packages be washed with hot water and soap. About The Daily Money Each weekday, The Daily Money delivers the best consumer news from USA TODAY. We break down financial news and provide the TLDR version: how decisions by the Federal Reserve, government and companies impact you. Daniel de Visé covers personal finance for USA Today Downside to the inflation drop? Falling profits could mean layoffs, some experts say Falling inflation, along with lower consumer demand, could squeeze corporate profit margins and spark layoffs and recession, some economists say READ MORE Advertisement Still waiting for that bonus? Year-end checks were lighter in 2023 Bonus checks are smaller because the job market is relatively stable, which means employers don't have to do as much to attract and retain workers. READ MORE Prescription drugs are expensive. Where to look for better deals. Experts say patients can lower their prescription drug costs by shopping around, especially if they are taking generic drugs. READ MORE It's a good time to check your 401(k). Stocks hit another record. The fresh highs for the stock market are welcome news for retirement accounts. The milestones follow major stock market declines in 2022. READ MORE Costco $150 floor mirror, dupe of luxury mirror, is latest viral craze Shoppers are hunting a $149.99 Costco mirror that many consider a "dupe" of a $1,198 mirror sold at Anthropologie. Oh, Sam's Club has one, too. READ MORE New illnesses reported, products added in charcuterie meat recall The CDC announced Thursday that it expanded a charcuterie meat recall to include a brand sold at Costco. Reported illnesses nearly doubled. READ MORE These states spend the most on groceries, Census data shows The average American spends $270 on groceries each week, Census data shows, but in some states you'll pay 20% more. READ MORE S&P 500 climbs to record high on rate cut hopes as inflation eases Stocks rallied on Friday with the broad market S&P 500 index climbing to a record high as investors bet on Fed rate cuts this year as inflation cools. READ MORE Want to visit Cancun without the crowds? Consider this nearby island. Isla Mujeres gets only 20% of Cancun's tourists, making it perfect for a quieter Mexican escape. Here's what it's like to visit. READ MORE Young girls are flooding Sephora in what some call an 'epidemic.' So we talked to their moms. Have you noticed anything strange at Sephora lately? 10-year-olds are taking over. Experts say the viral phenomenon says a lot about preteens today. READ MORE Advertisement Sign up for the news you want Exclusive newsletters are part of your subscription, don't miss out! We're always working to add benefits for subscribers like you. SEE ALL NEWSLETTERS ➔ Newsletters   |    eNewspaper   |   Crosswords Follow Us Problem viewing email? 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