Annual U.S. inflation, 2004–2024, with 2014 highlighted. Bars below the line
are deflation. Source: BLS CPI-U.
2014 ended with the sharpest oil price drop in years. Consumer prices rose
1.6% for the year, close to 2013’s pace, but the annual figure hid a shift at
the pump: crude oil fell from above $100 a barrel in June to below $60 in
December, and gasoline finished the year near $2.25 a gallon after averaging
$3.37 across 2014. The drop reflected record U.S. shale output, softer
global demand, and OPEC’s decision in November to keep producing.
For households, cheaper fuel arrived just as the labor market strengthened.
Median household income was $53,657, essentially flat on the prior year, and
the median new home sold for about $288,500. The federal minimum wage stayed
at $7.25 for a fifth year, and a first-class stamp rose to 49 cents.
The Federal Reserve ended its bond purchases in October but left its policy
rate at zero. A stronger dollar helped hold down import prices. Because
energy weighs heavily in the CPI, the late-year slide carried into 2015, which
posted the smallest annual increase of the decade.
What things cost in 2014
In 2014, the median household income was $53,657, and a gallon of gas cost $3.37.
Median household income
$53,657
Gas (per gallon)
$3.37
Median home price
$288,500
First-class stamp
$0.49
Federal minimum wage
$7.25
What $100 from 2014 was worth later
$100 from 2014 had the buying power of $140
by 2026; each milestone links to that conversion.
Consumer prices rise 1.6% as oil prices collapse late in the year.
Consumer prices rise 1.6% as oil prices collapse late in the year Annual inflation was nearly unchanged from 2013, but the second half told a different story. Falling gasoline prices pulled monthly readings down from September onward and set up an unusually low 2015.
Crude oil falls by about half between June and December U.S. crude traded above $100 a barrel in June and finished the year below $60. A U.S. shale production boom, weaker demand growth, and OPEC's November decision not to cut output all contributed. Retail gasoline ended the year near $2.25 a gallon.
The Fed ends its bond-buying program in October After tapering purchases at every meeting since January, the Federal Reserve stopped adding to its holdings of Treasury and mortgage securities. Its policy rate stayed at 0–0.25%.
The dollar strengthens sharply With the U.S. recovering faster than Europe and Japan, and those central banks easing, the dollar rose against most major currencies in the second half, lowering the cost of imported goods.
Sources: U.S. Bureau of Labor Statistics, Consumer Price Index (CPI-U, U.S. city average); U.S. Census Bureau, Current Population Survey (income); U.S. Census Bureau, New Residential Sales (home price); U.S. Energy Information Administration (gasoline, crude oil); U.S. Department of Labor (minimum wage); USPS historical rates; Board of Governors of the Federal Reserve System, press releases.
Inflation figures: U.S. Bureau of Labor Statistics, CPI-U annual averages.
See the methodology.