WEST CHESTER, PA (TheStreet) -- In general, 2014 was a good year for the U.S. economy, and 2015 should be even better.
• Growth should accelerate in 2015 as higher wages spur more spending, construction and investment.
• The sharp fall in oil prices will slow energy production but still be a net gain for the economy.
• How fast the Federal Reserve raises interest rates, and how markets respond when they do, will be key to the coming year's economic story.
• As more millennials begin forming households, housing demand and construction will take off.
• The aging population and a slower pace of technological change could weigh on the economy's long-term potential.
• Problems in Europe and China have the potential to hinder the U.S. expansion in 2015.
The most encouraging development of the past year was the rapid decline in joblessness. At the current pace of job growth, the economy is fast approaching full employment. The next critical step in the economy's return to full health is a meaningful acceleration in wage growth, which appears imminent.
Most surprising has been the recent slide in oil prices, which, if sustained, will provide a significant boost to growth. The U.S. produces a lot more oil than it used to because of the shale revolution, and falling prices will take a toll on future energy development, but the country is still a significant net consumer of oil. As consumers put less of what they earn into their gasoline tanks, therefore, the holiday shopping will receive a lift.
Arguably the biggest disappointment in 2014 was the sideways housing market. The surge in mortgage rates in late 2013 and tight mortgage credit hurt home sales and construction. But mortgage rates have receded and the credit spigot has begun to open. Many millennials who have delayed forming households will begin to do so soon as the job market improves, moreover, making housing a more significant source of growth.
Click through for a complete economic outlook for 2015. Read Mark on Moody's Analytics Dismal Scientist.