In 2014, US economy began shaky, finished strong

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In 2014, US economy began shaky, finished strong

In 2014, US economy began shaky, finished strong - Yahoo News


More than five years removed from the Great Recession, worries had taken hold at the start of the year that perhaps the world's largest economy had slid into a semi-permanent funk.

But consumers, businesses and investors, after enduring a brutal winter, showed renewed vigor as the year wore on and set the United States apart from much of the world.

Stocks repeatedly set record highs — and did so again Friday, with the Dow Jones industrial average rising modestly to a new peak. Employers were on pace to add nearly 3 million jobs, the most in 15 years. Sinking oil prices cut gasoline costs to their lowest levels since May 2009. Auto sales accelerated. Inflation was a historically low sub-2 percent.

The U.S. economy proved it could thrive even as the Federal Reserve ended its bond buying program, which had been intended to aid growth by holding down long-term loan rates.

All told, the United States remained insulated from the financial struggles surfacing everywhere from Europe and Latin America to China, Japan and Russia.


FILE - In this Monday, Oct. 6, 2014 file photo, Derrick Roberts, right, Chef De Cuisine at Gotham St …
So what explained the U.S. economy's resilience this year?

Economists say it largely reflected the delayed benefits of finally mending the damage from the worst downturn in nearly 80 years. Unlike past recoveries that enjoyed comparatively swift rebounds, this one proved agonizingly slow. It took 6½ years to regain all the jobs lost to the recession — 8.7 million — far longer than during previous recoveries.

"It was a healing process from a severe recession and the financial crisis," said Richard Moody, chief economist at Regions Financial, a bank based in Alabama.

The healing isn't complete. Wage growth remains lackluster and has barely outpaced extremely low inflation. Home building has been tepid.

But worries earlier this year that the economy might be trapped indefinitely by sluggish growth have largely faded. Here are the economic highlights of 2014:


FILE - In this Dec. 18, 2014 file photo, a car passes the price of gas at the Eastcoast filling stat …
— HIRING BOOM

Employers added 2.65 million jobs over the first 11 months of the year, and the unemployment rate sank to 5.8 percent from 6.7 percent. When the government announces the December job data next month, the 2014 job total is expected to be just shy of 3 million — the most since the dot-com era in 1999. Compared with recent years, those gains have been less concentrated in lower-paying industries such as retail, food service and temp agencies.

"We're finally entering that virtuous cycle phase of the expansion" when more jobs lead to higher incomes, which generates more consumer spending and growth, said Brett Ryan, an economist at Deutsche Bank.

Though average wage growth has been modest, the number of people with paychecks — and the ability to spend — has soared. If you exclude the economy's winter-induced 2.1 percent annual contraction in the first quarter of the year, annualized growth has averaged 4.4 percent in four of the past five quarters. That's far above the historic average of roughly 3.2 percent in the decades after World War II.

— STOCKS SURGE


FILE - In this Nov. 11, 2014 file photo, 2015 Ford F-150s move along the production line at the Dear …
Stocks extended their bullish stampede of nearly six years. The Standard & Poor's 500 index climbed about 13 percent this year, hitting record highs more than 50 times. If you bought the index at a market bottom in March 2009, you've basically tripled your money. Corporate mergers helped drive this year's gains, along with major companies buying up $400 billion-plus of their own stock.

—OIL PRICES PLUNGE

In a gift for U.S. consumers, energy got significantly cheaper. Crude oil prices were essentially cut in half from this year's high. The slowing economies in Europe and Asia curbed demand, while production remained steady. The price decline trickled down to gasoline pumps. Average prices nationwide dropped to $2.32 a gallon, down roughly a dollar from a year ago, according to AAA. Some of that price slowdown has hurt U.S. oil producers, which must weigh layoffs. But overall, cheaper oil is a positive. Federal Reserve Chair Janet Yellen noted that the falling prices resemble a tax cut, generating savings for consumers that can be spent elsewhere to drive economic growth.

— AUTOS SALES UP

Far more Americans splurged on a new car after having held onto aging vehicles during the recession and slow early stages of the recovery. Sales were on track to increase 6 percent this year, with 16.5 million new vehicles on the road, according to Cars.com. That would be the best sales pace since 2006.

—INTEREST RATES DROP

Even as the economy has strengthened — usually a sign that interest rates will rise — it's become easier to borrow. More loans mean more spending and faster growth. Rates have declined even though the Fed ended its program to stimulate growth by buying billions in Treasury and mortgage bonds each month.

The yield on the 10-year Treasury note has slipped to about 2.27 percent from 3 percent when the year began. The average 30-year fixed mortgage is 3.83 percent, down from roughly 4.5 percent a year ago.
 

ally79

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It all sounds good, but I don't think that the economy is any where near being out of the woods. The stock market can't sustain it's current numbers, and even though unemployment is "down" according to government figures, there are so many people making minimum wage or holding part-time positions that would rather be employed full-time. I guess only time will tell, but I personally don't think we are "out of the woods" by any stretch of the imagination.
 

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It all sounds good, but I don't think that the economy is any where near being out of the woods. The stock market can't sustain it's current numbers, and even though unemployment is "down" according to government figures, there are so many people making minimum wage or holding part-time positions that would rather be employed full-time. I guess only time will tell, but I personally don't think we are "out of the woods" by any stretch of the imagination.
These slight improvements are indicating that the US economy began to heal. It only needs time and also some effort to get back on feet once again.
 
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These highlights are definitely showing that America is yet again ruling the world as it once did, just a bit more pull and thug before we are finally back, and even better than before. So everyone who was blaming Obama, what do you have to say? We haven't seen this good an economy since 1991.
 
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I am glad that the US economy is stronger, the dollar is already gaining ground on the euro and I hope that this improvement makes Europe pick up as well because I am sick and tired of the crisis and earning less every single year.
 
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It's good to see that things are picking up. We have had a similar economic downturn in the UK, but there doesn't appear to be much recovery yet. Hopefully things will improve.

I am glad that the US economy is stronger, the dollar is already gaining ground on the euro and I hope that this improvement makes Europe pick up as well because I am sick and tired of the crisis and earning less every single year.
Yes, hopefully this will be the case. Things are tough right now, we can only hope the economy continues to improve.
 

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Yes!!! Gas is cheap and I am seeing more job listings than ever! I am so optimistic about my future. I haven't felt this way since 2002 let me tell you. I just hope that things stay this way for a few years. I need it!
 
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Reports say there is growth, what one must remember the economy has been stagnant for so long, so growth is really a catch up and a leveling out. Wages have not gone up but the cost of living has, so what growth is there? There may be less debt, but people have learned and no one wants to buy a home and take that risk again.

Loopholes in minimum wages jobs means people don't get benefits and have to supplement their income with food stamps. Things are better, but it is far from being stable and healthy. All it takes is another recession and those people who have found stability, may well lose it again.
 
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I am glad that the US economy is stronger, the dollar is already gaining ground on the euro and I hope that this improvement makes Europe pick up as well because I am sick and tired of the crisis and earning less every single year.
I completely agree with that.
 
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Glad to see that our 'friends across the pond' are recovering! May the US of A have a great 2015, and a strong economy, haha!
 
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Any reason as to why gas prices are so ridiculously low ? I just filled up my tank and paid $2.57/gallon.
 
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The U.S. economy is growing. As someone who lives near the border of Canada I see this firsthand. For the past few years our shopping centers (malls) have been crowded with Canadian citizens on weekends coming down and buying a great deal of merchandise because the U.S. economy was poor and the Canadian dollar was doing so well.

Over this past holiday season as I visited a local shopping mall I noticed the lot had fewer cars. I thought it was maybe the time of day - as I went in to the store I asked the clerk checking me out how business was and she had said it was slow. Less Canadians coming down because the U.S. dollar was going back up and it wasn't worth them coming down to shop.

So first hand knowledge - the economy is getting better.

I like the question downsouth asked - why are gas prices going down so low? Crude is down to $53 a barrel. It's amazing how the price of oil shifts on a dime. I'll stock up while I can while the price is good!!
 
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We need more production jobs for it to start growing again. The US economy can't sustain itself on a mostly service economy.
 
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According to economists, 2015 is even going to be great for the US. Really looking forward to it. There are also more jobs now more than the past 10 years, so this is something exciting. Cheers to 2015!
 
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I see what you're saying, but due to the damage that the recession left, we must take baby steps. Like the article said, it took us 6.5 years to regain the amount of jobs lost. This is an awfully long amount of time, but we did it with baby steps. If our only worries are the people will part-time who want to work full-time, then we are doing fairly well in comparison to how we were 5 years ago.
 
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