The Top 5 Most Important Financial News of 2014


Excellent Economic Growth in the United States

One of the most important pieces of financial news in 2014 was that the United States had the strongest economic growth we’ve seen in years, even decades. Unemployment fell by a full point over the course of the year and is now down to 5.8 percent, the lowest point since 2008 and the lowest point since the recession started.

GDP, a measurement of the size of the economy, grew by 5 percent which is the most the economy’s grown since 2003. The stock market is also reaching new records with the Dow Jones breaking 18,000 for the first time ever in December. Overall, the U.S. economy finally seemed to start growing again at a solid pace in 2014. If this continues, unemployment should continue to fall, wages should start going back up, and the country might finally start feeling like it’s recovered from a brutal recession.


Really Low Mortgage Interest Rates

2014 was supposed to be the year that low mortgage interest rates disappeared. The economy was on track for recovery, which was supposed to mean more home buyers would eventually push up mortgage rates. At the same time, the Federal Reserve started ending its QE program, a program where it was pushing rates down. By ending this program, the Fed stopped blocking rates from going up.

Instead, mortgage rates didn’t go up at all and are finishing the year below what they were a year ago. The 30-year mortgage interest finished the year around 3.83 percent. A year ago, it was closer to 4 percent. Americans still aren’t buying enough homes, even with the stronger economy, so mortgage rates are still at historic lows.


Gas Is Cheap Again!

For years, Americans have struggled at the pump with high gas prices. This all changed at the end of 2014, seemingly overnight. In July, the price of a regular gallon of gas in the United States averaged about $3.52. Now, gas prices have fallen to about $2 a gallon with some areas paying well below $2 a gallon. This was definitely a pleasant bit of financial news in 2014.

There are a few reasons why gas prices are so low. America has ramped up domestic production along with new supplies of energy, like fracking. This extra competition is keeping prices low. Also, while the American economy is strong, other major economies like Europe and China have run into problems and are using less energy. Less global demand means lower prices. Finally, we’ve been pretty lucky this year with no major natural disasters. There haven’t been many hurricanes in oil producing regions and we definitely haven’t run into any major disasters, which can completely derail oil production.


Finally, Minimum Wage Goes Up

2014 was an election year to vote on new politicians and new laws. One of these biggest changes was a minimum wage hike across a large part of the country. Twenty-one states and the District of Columbia all voted to increase their minimum wage rates.

The federal minimum wage rate is only $7.25 but because of these new state votes, the average minimum wage across the United States will now be $8. Seattle and San Francisco have led this movement by increasing their city minimum wages to $15 an hour. This trend seems set to continue in 2015, as people fight for higher wages from corporations and the government.


A Stronger U.S. Dollar

Overall, 2014 was a pretty great year for the United States. The rest of the world wasn’t so lucky. Europe is still struggling with a deep recession, Japan and China have been lowering the value of their currencies to boost their economies, and Russia has been crushed by lower oil prices.

As a result, the U.S. dollar is stronger than it’s been in years. This is a good time to travel abroad because everything will be more affordable and your money will go a lot farther. It’s also a good time to buy products from other countries.

The downside of a stronger American dollar is that foreign countries will be less likely to buy American goods because they are more expensive. This could hurt American exporters. Overall though, most Americans will benefit from the increased buying power of a stronger dollar.