As the year’s end approaches, economists are looking back and assessing the news stories that shaped 2014.
Though their lists may vary, most analysts are pointing to five developments that had very big impacts on the U.S. economy. These were the biggies for 2014:
Oil Prices Plunge
Oil pump jacks and storage tanks are seen Dec. 17 near Watford City, N.D. Oil prices are half what they were at the start of the year. Eric Gay/AP hide caption
itoggle caption Eric Gay/AP
No one saw this one coming. When 2014 began, a barrel of crude oil was selling for about $110. It hovered there until late spring, when the price ticked up to nearly $115.
And then, down, down, down went oil. Month after month, the price plunge continued until a barrel got below $55 this month.
Seeing oil prices cut in half has left economists stunned and rethinking their predictions for inflation. Most consumers are thrilled to see cheap gasoline, but oil-producing companies and nations are scrambling to cope.
Shantel Walker stands outside a fast food restaurant June 19 in Brooklyn, New York. Walker, who made $8.25 per hour at a Brooklyn pizzeria, was part of a broad campaign by fast food workers to advocate for higher minimum wages. Julie Jacobson/AP hide caption
itoggle caption Julie Jacobson/AP
Despite strong profits for corporations, raises for workers remained meager.
Month after month throughout 2014, the Labor Department’s jobs report showed no meaningful increase in average hourly earnings. Congress did not raise the federal minimum wage of $7.25 an hour, and most employers provided only tiny pay increases for more-skilled workers.
The Bureau of Labor Statistics said average hourly earnings in November were $24.66, up just 51 cents from last year. Adjusted for inflation, that increase amounted to 0.8 percent for the year.
U.S. Economy Soars Above Others
A craft beer fan picks up a six-pack of Goose Island Beer Co.’s limited Black Friday release of Bourbon County Brand Stout on Nov. 26 in Chicago. Barry Brecheisen/Invision/AP hide caption
itoggle caption Barry Brecheisen/Invision/AP
The year started poorly for Americans, thanks to unusually harsh winter weather that derailed plans for building, spending and traveling. But with the spring came an economic warming.
In fact, by summer, growth was running hot. The Bureau of Economic Analysis says it advanced at an annualized 3.9 percent over July, August and September. That growth generated many more job openings, as well as new revenues that helped shrink the federal budget deficit.
Even as the U.S. economy was expanding, other nations were struggling. In Europe, Japan, China, India, Brazil and elsewhere, companies saw profits shrivel and gloom spread. Russia’s economy vaporized. As everyone else fell back, the dollar strengthened and the United States emerged as the world’s only real engine of growth.
Stocks Shoot Up; Interest Rates Don’t
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The stock market continued its long run up, with the S&P 500 stock index gaining roughly another 11 percent for the year. Those gains came as interest rates continued to cling to their historic lows.
Stock prices for existing tech companies were mixed, with investors loving Apple Inc. but moving away from the so-called cloud sector.
One thing was not mixed: Investors’ desire for shares of new companies. One example: LendingClub, an online loan marketplace, chalked up a 56 percent gain on its first day of trading.
Hack Attacks Spread Fear
James Franco (left) and Seth Rogen, stars of The Interview, arrive for the film’s Los Angeles premiere on Dec. 11. The comedy about a CIA plot to assassinate North Korean leader Kim Jong Un was pulled from theaters after a cyberattack on Sony Pictures, the studio behind the film. The FBI said the attack was traced to the North Korean government. Jim Ruymen/UPI/Landov hide caption
itoggle caption Jim Ruymen/UPI/Landov
Whether you were a Sony executive or a Home Depot customer, 2014 was a bad year for cybersecurity. Emails got hacked and personal information was stolen, and economic havoc was heaped upon companies.
Both corporations and consumers are struggling to respond to the growing threats, but what can be done to boost security is not yet clear.
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