The U.S. economy expanded at a healthy pace during the third
quarter, a sign of sustained growth fueled by government spending
and a narrower trade deficit despite mounting concerns about the
health of overseas economies.
Gross domestic product, the broadest measure of goods and
services produced across the economy, advanced at a seasonally
adjusted annual rate of 3.5% in the third quarter, the Commerce
Department said. Economists surveyed by The Wall Street Journal had
forecast 3.1% growth for the quarter.
The report showed broad-based gains across the economy but also
raised questions over whether the pace could be sustained in the
last three months of the year. Trade boosted growth as imports
fell, while government spending, which has been a drag on growth
over the past three years, turned up amid a boost in military
spending.
The report showed that inflation-adjusted GDP rose 2.3% from a
year earlier. Economic growth during the current expansion has been
modest by the country's historical standards, and yet it may prove
to be the envy of many other advanced economies.Business investment
held steady but consumer spending showed few signs of a big upturn,
and housing continues to underwhelm. Those sectors could be
particularly important if exports slide amid a rising dollar and
slower growth in Europe, Japan or China.
Nick Timiraos And Eric Morath WSJ.com VA Disability Claims
Soar
Requests for disability pay by veterans have ballooned during
the past five years, overloading many doctors who evaluate the
claims and increasing the possibility of fraud, according to
current and former VA staff and government watchdogs.
From fiscal 2009 to 2013, the number of medical disability
claims received by the Veterans Benefits Administration--a branch
of the Department of Veterans Affairs--climbed 44%. The number of
doctors called upon to evaluate the claims rose only 22%, according
to the VA.
"Claims are coming in a lot faster than what the VA is able to
handle," said Daniel Bertoni, a director at the U.S. Government
Accountability Office, which investigates federal spending. A March
2013 GAO report found that claims jumped 29% from 2009 to 2011 but
the agency processed only 6% more.
A VA spokeswoman said its processing of claims is "within
standards" for both time and quality. She said the agency contracts
with additional employees when needed and can call on other VA
clinicians to help process claims "without delay."
Daniel Huang The Wall Street Journal Longevity Dogs Pensions
Good news for Americans: You are living longer.
The bad news: The longer lifespan doesn't bode well for the
corporate pension plans that are supposed to support workers into
old age.
New mortality estimates released last week by the nonprofit
Society of Actuaries show the average 65-year-old U.S. woman is
expected to live 88.8 years, up from 86.4 in 2000. Men age 65 are
expected to live 86.6 years, up from 84.6 in 2000.
Longer lives for retirees may add to a squeeze at many pension
funds already struggling to plug funding gaps and force companies
to contribute more to cover future obligations.
The estimates also are expected to accelerate a shift away from
defined-benefit pension plans that offer guaranteed payouts, said
Rick Jones, a partner at consultant Aon Hewitt.
Companies being hit with rising insurance premiums and
longer-living retirees also are expected to unload the risks of
running a pension plan by offering workers lump-sum pension buyouts
or selling those liabilities to insurance companies.
One such deal came in September, when Motorola Solutions agreed
to transfer about $3.1 billion in pension obligations and their
risk to Prudential Financial, and to purchase a group annuity
contract from the insurer.
That and other related moves are expected to roughly halve
Motorola's retirement obligations.General Motors and Verizon
Communications have struck similar arrangements, which worry some
retirees, because their benefits no longer carry a backstop from
the federal Pension Benefit Guaranty Corp.
Dan Fitzpatrick The Wall Street Journal A Migration to
Obamacare
Small companies are starting to turn away from offering health
plans as they seek to reduce costs and increasingly view the health
law's marketplaces as an inviting and affordable option for
workers.
In the latest sign of a shift, WellPoint said last week that its
small-business-plan membership is shrinking faster than expected
and it has lost about 300,000 people this year, leaving 1.56
million in small-group coverage.
During a call with analysts to discuss third-quarter earnings,
the No. 2 insurer said it had projected a five-year migration to
"significantly reduce" small-employer membership, but it now thinks
the drop-off will be compressed into two years.
Going forward, with the health law's marketplaces running and
functioning well, small employers will likely re-evaluate exchanges
as an option for their employees, said Wayne DeVeydt, WellPoint's
chief financial officer. "We think [that] will become even probably
a more prominent decision that they'll make this quarter," he
said.
Other insurers have flagged a similar trend. Aetna Chief
Financial Officer Shawn M. Guertin said the company is seeing "some
erosion at the bottom of the market" among employers with two to 10
workers. Kaiser Permanente is seeing "some contraction" in the
small-group market, particularly in places where insurers are
offering cheap individual plans, said Joe Smith, the nonprofit's
vice president for small business.
Angus Loten, Anna Wilde Mathews, And Christopher Weaver The Wall
Street Journal High-Density Coach Class
If you think flying economy is miserable now, just wait.
Delta, United, American, Southwest and other airlines have
installed new "slim-line" seating--with trim metal frames and
ultrathin cushions--squeezing rows closer together to pack more
people on each flight. Three-quarters of Delta's domestic fleet and
one-quarter of United's now have the seating.
The lightweight seats--and even some new, narrower
bathrooms--boost profits, reducing fuel burned per passenger and
selling more tickets per flight.
But passengers feel the pinch: Some complain about stiff padding
and knee-knocking issues, and liken flying in the new seat to
squeezing next to strangers on a crowded park bench. A survey by
TripAdvisor of 1,391 travelers who had tried the new seats found
83% said they were less comfortable than traditional seats.
Each row of coach seats used to have 32 or 33 inches of space
between seat backs--a metric the industry calls seat "pitch." Now,
many big airlines are down to 31 inches of pitch. United goes as
tight as 30 inches on some of its Boeing 737s.
And at some airlines, it's going to get worse. In September,
Boeing announced the launch of new, denser seating on 737s called
737 MAX 200, aimed at low-cost airlines. The new MAX 200 version
will be built with additional emergency exits and fitted with 200
seats. The current version typically has 160 seats and is capped at
a maximum 189 for safety reasons. Seat pitch on the new version
will be as tight as 28 inches, the company says.
Regulators deal with seat space in tests of safety, not
comfort.
A Boeing spokeswoman says the new seats give passengers "more
leg room than the previous generation of seat designs" and make
high-density planes possible.United, Delta and others say coach
improvements such as video-on-demand and Wi-Fi help compensate for
tighter seating.
Scott McCartney The Wall Street Journal