Some of the major economic stories of 2014 were surprises. Today, we tell you about a few of them. But, we also want to know which economic stories were important to you this year.
First on our list, is the unexpected drop in the price of oil that began in June.
Oil Prices Decrease
Often, low oil prices fuel growth, but this year the price drop has helped some countries while hurting others.
Increased American oil production is one reason for the drop in world oil prices. The drilling method called hydraulic fracturing developed in the U.S. has helped make the increase possible. Recovering fossil fuels from rock shale has also increased supplies in the U.S.
Experts say slowing economies in China and in Europe have reduced demand for oil. Increasing supply and decreasing demand usually result in falling prices.
In the past, the Organization of Petroleum Exporting Countries, OPEC, has reacted to price drops by decreasing production. But this year that did not happen. At OPEC’s meeting in November, members chose to leave production levels unchanged.
Russian Economy Slows from Oil Prices, Sanctions
The huge drop in the price of oil this year helped create another major story: Russia’s slowing economy. Russian officials said they expect the country’s economy to shrink in 2015, or go into recession. Two reasons for this are reduced income from oil sales and the effects of restrictions placed on Russia because of its actions in Ukraine.
The exchange rate for Russia’s currency, the ruble, has dropped sharply against the dollar. In mid-December, the European Union agreed to increase sanctions against Russia. They include restrictions on finance and tourism in Crimea.
US Economy Shows Signs of Improvement
The U.S. economy showed signs of strengthening this year. The Department of Commerce updated the most recent measure of the economy. It said the U.S. economy grew at a rate of 5 percent from July to September.
The Dow Jones Industrial Index extended above 18,000 in 2014. That is the highest level ever for the widely reported measure of stock market value.
In other financial news, the U.S. central bank ended its last round of the program known as quantitative easing in October. The program by the U.S. Federal Reserve System bought trillions of dollars of securities. Experts says the program helped support the U.S. economy and kept interest rates low.
Also, the face of America’s central bank, the U.S. Federal Reserve System, changed in 2014. The Senate confirmed Janet Yellen to lead the Board of Governors of the Federal Reserve System in January. She is the first woman to lead the nation’s central bank in its 100-year history.
Other Economic Events…
Hilton Worldwide announced it was selling the famous Waldorf Astoria hotel in New York City to a Chinese company for $1.95 billion. The buyer -- Anbang Insurance Group – offered one of highest prices ever for a U.S. hotel. Hilton Worldwide says it will use the money from the sale to buy other hotels in the United States. The Chinese buyer has said it will invest in remodeling the property on Park Avenue to bring it back to its “historical grandeur.”
The ride-sharing company Uber faced legal actions in several countries. The Indian government called for all unregistered taxi services to halt operations in December. The order came after an Uber driver reportedly raped a woman in New Delhi, the capital. Uber uses a mobile app to link drivers and people seeking a ride.
Uber has faced or is facing bans in Germany, Spain, India, and Thailand. France recently said it plans to block Uber services that use non-professional drivers. Uber competes with established taxi services in many cities around the world.
Most recently, reports say government lawyers in South Korea have brought charges against the American founder of Uber. The Seoul prosecutor's office brought charges against Uber’s chief Travis Kalanick for violating a law banning unlicensed taxi services.
Those are only a few of the major economic stories this year. Tell us what you think were the most important stories in the U.S and around the world. Send an e-mail to firstname.lastname@example.org.
I’m Mario Ritter.
Words in This Story
securities – n. plural, evidence of ownership that has financial value, such as a stock or bond; a financial contract
sanctions – n. an action taken to persuade a country to obey international law
unregistered- adj. officially placed on a list of people or groups permitted to carry out some kind of activity
app – n. (short for application) a computer program often used in connection with mobile technology