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U.S. NEWS A7
UnitedHealth’s CEO
says ACA exchange
move ‘bad decision’ Factory activity drops in November, first decline in 3 years
TOM MURPHY
AP Business Writer
UnitedHealth CEO Stephen
Hemsley offered a mea
culpa Tuesday for his com-
pany’s decision to dive
deeper into the Affordable
Care Act’s public insur-
ance exchanges, a move
that ultimately forced the
nation’s largest health in-
surer to cut its earnings
forecast.
Hemsley told investors that
the insurer should have
learned more about the
still-new business, and
expanding before it did
that was “for us, a bad
decision.” UnitedHealth
jumped into two dozen
state-based exchanges for
2015 after selling coverage
on just four in 2014.
“It will take more than a
season or two for this mar-
ket to develop,” Hemsley
said during a webcast of
the company’s annual
meeting with investors in
New York.
UnitedHealth lowered its
2015 outlook last month
after detailing steep losses
from the exchange busi-
ness. The insurer also said
its exchange business — a
small slice of its overall port- global growth,” said Jenni-
folio — was weighing on
its 2016 earnings forecast,
and it would decide next
year whether to even par-
ticipate in the exchanges
in 2017.
That announcement shook
health insurance stocks
and raised concern about
the long-term viability of
the state-based insurance
exchanges, a key compo-
nent of the overhaul’s push
to expand coverage to mil-
lions of uninsured people.
Several smaller, nonprofit
insurance cooperatives
also have said that they
would stop selling cover-
age on the exchanges for
2016.q
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US Financial Front:
JOSH BOAK
AP Economics Writer
WASHINGTON (AP) — U.S.
factory activity plummet-
ed last month to the lowest
level in more than six years,
with a stronger dollar and
low oil prices cutting new
orders and hurting produc-
tion.
The Institute for Supply
Management said Tues-
day that its index of fac-
tory activity in November
dropped to 48.6 from 50.1
in October. Any reading
below 50 signals contrac-
tion and the index has
tumbled below that critical
level for the first time since
November 2012.
It now rests at its lowest lev- The manufacturing re-
el since June 2009, a wor-
risome sign as Federal Re-
serve officials will consider
raising short-term interest
rates this month on the un-
derstanding that the econ-
omy has sufficiently healed
from the Great Recession.
“The U.S. manufacturing
sector continues to suffer
the slings and arrows of
outrageous fortune, with
‘fortune’ being that of the
strong U.S. dollar, the oil
and gas industry, and soft
fer Lee, a senior economist
at BMO Capital Markets.
U.S. manufacturers fell into
a rut in 2015. A global eco-
nomic slowdown and a
rising dollar have crimped
exports, while lower oil pric-
es have led energy firms to
slash their orders for steel
pipe and other equipment
for drilling. Those pres-
sures have steadily curbed
growth in factory activ-
ity this year and have now
pushed the manufacturing
sector into contraction.
A measure for new orders
dropped to 48.9 from 52.9,
while production fell to
49.2 from 52.9. Still, the re-
port showed a rebound in
hiring as its employment
Wednesday 2 December
measure improved to 51.3 vey. The cheaper costs cies from a year ago. The
from 47.6 a month earlier. have improved profit mar- increase has left manufac-
Of the 18 industries tracked gins for manufacturers, but turers at a disadvantage.
in the ISM survey, 10 con- continued declines would U.S. goods have become
tracted last month. Among point to less demand and more expensive overseas,
Ron Hudgins welds a 2015 Ford F-150 cab at the Dearborn Truck Plant in Dearborn, Mich. U.S.
factory activity fell last month to the lowest level in more than six years. The Institute for Supply
Management said Tuesday, Dec. 1, 2015 that its index of factory activity in November dropped
to 48.6 from 50.1 in October. (AP Photo/Paul Sancya)
the sectors that shrank fewer sales. while lowering prices for
were apparel, plastics and U.S. manufacturers have imported goods that com-
rubber, machinery, prima- been squeezed this year as pete against American
ry metals, petroleum and a strong dollar and weak products. China has been
coal, electrical equipment economies in China and stuck in a slowdown, as has
and computer and elec- other key foreign markets Brazil. Europe — a major
tronic products. have cut into exports. trade partner — remains
A separate measure re- economically fragile, while
port still suggests that the leased Tuesday found that Japan has sunk into reces-
broader economy is grow- Chinese manufacturing sion and Canada slipped
ing, even if manufacturing has slipped to its worst level into a downturn for part of
has become a drag. Any in more than three years. this year.
reading above 43.1 in the China’s manufacturing Companies trimmed their
index is associated with the index, based on a sur- stockpiles of goods be-
overall economy expand- vey of factory purchasing tween July and Septem-
ing. managers, slipped for the ber, the government said
“We stepped into a pot- fourth straight month de- last week. That cut eco-
hole here,” said Bradley spite stimulus efforts to sup- nomic growth during those
J. Holcomb, chair of the port growth. The index fell three months at an annu-
ISM manufacturing busi- to 49.6 in November from alized rate of 0.6 percent-
ness survey committee. 49.8 the previous month. age points, even though
He said the fundamentals Any reading of the index overall growth advanced
should enable a rebound below 50 signals contrac- 2.1 percent.
in the coming months rath- tion. Despite the dismal outlook
er than a prolonged de- Because of less economic from the ISM report, there
cline. growth worldwide, the dol- is evidence that some
Commodity prices have lar has appreciated near- manufacturers are adjust-
dropped sharply over the ly 14 percent against a ing to these challenging
past 13 months in the sur- grouping of major curren- conditions.q