Business Highlights

Middle-class squeeze: From day care to health care

WASHINGTON (AP) — Three years ago, Jason Prosser was stunned to discover the cost of child care for his newborn son — so much so that he and his wife postponed having a second child.

The day care center they found near their Seattle home tops $10,000 a year. Next year, their son, now 3, can attend a Catholic preschool less than half as costly.

He and his wife are among legions of middle-class families who are straining under the weight of accelerating costs for a range of essential services from day care to health care. And now a study by the Center for American Progress shows just how heavy the burden has grown: For a typical married couple with two children, the combined cost of child care, housing, health care and savings for college and retirement jumped 32 percent from 2000 to 2012 — and that’s after adjusting for inflation.

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Wal-Mart’s mobile checking account nixes fees

NEW YORK (AP) — Wal-Mart is the latest company to get rid of fees that traditional banks charge customers who don’t have enough money in their accounts to cover purchases.

The world’s largest retailer said Wednesday that it teamed up with Green Dot Corp., a company known for its reloadable prepaid cards, to bring mobile checking accounts to its shoppers. The accounts won’t charge overdraft and bounced-check fees.

It’s the latest attempt to offer banking services that cater to cash-strapped Americans who are still struggling in the economic recovery. Bank of America and Citibank both launched checking accounts this year that don’t charge overdraft fees, which can normally cost up to $35 per transaction.

The moves come as overdraft fees, which occur when a customer doesn’t have enough cash in their account to cover a purchase, have come under increasing scrutiny by regulators in the past few years.

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Anti-addiction groups call for new FDA chief

WASHINGTON (AP) — Anti-addiction activists are calling for the Food and Drug Administration’s top official to step down, saying the agency’s policies have contributed to a national epidemic of prescription painkiller abuse.

In a letter released Wednesday, more than a dozen groups ask the Obama administration’s top health official to replace FDA Commissioner Dr. Margaret Hamburg, who has led the agency since 2009. The FDA has been under fire from public health advocates, politicians and law enforcement officials since last October, when it approved a powerful new painkiller called Zohydro against the recommendation of its own medical advisers.

The new letter is the first formal call for new leadership at the FDA over the issue.

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AP Exclusive: Drones left out of air traffic plans

WASHINGTON (AP) — Designers of the ambitious U.S. air traffic control system of the future neglected to take drones into account, raising questions about whether it can handle the escalating demand for the unmanned aircraft and predicted congestion in the sky.

Congress passed legislation creating NextGen in 2003, and directed the agency to accommodate all types of aircraft, including drones.

The program, which is not expected to be completed for at least another decade, is replacing radar and radio communications, technologies rooted in the early 20th century, with satellite-based navigation and digital communications.

The FAA has spent more than $5 billion on the complex program and is nearly finished installing hardware and software for several key systems. But the further it progresses, the more difficult it becomes to make changes.

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Learning how to survive a plane crash

LONDON (AP) — They raced down the slide, one by one, like children on a playground. At the bottom, smartphone photos were snapped and high fives exchanged.

The frequent fliers were all smiling and laughing — and quietly hoping to never use an evacuation slide again. Doing so would mean their plane had just crashed.

The slide demonstration was part of a half-day safety course that encourages passengers to be aware of their surroundings and familiarize themselves with what happens in an emergency. The two dozen participants learned the best way to brace for a crash, how to open aircraft doors and why to wait until exiting a plane to inflate life vests.

Started as a training exercise for oil company employees who routinely flew to remote locations, the course is now open to frequent fliers willing to pay $265, although most participants are still sent by their companies. There are up to three classes a week.

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Small businesses helping workers buy health plans

NEW YORK (AP) — When Monty Hagler learned his employee insurance premiums could rise as much as 38 percent, the small business owner decided he couldn’t afford coverage that complies with the health care overhaul.

He considered a variety of plans from different carriers, but they were too expensive or bare-bones.

So Hagler told his 12 staffers he would give them money starting in May to buy their own insurance, coverage likely to be better than what he could offer. He joined a growing number of small business owners who are forgoing coverage and paying staffers more to compensate for the lost benefits. Health insurer Wellpoint said last month its roster of small businesses has shrunk by 12 percent so far this year. Nearly 3 percent of 1,600 small businesses surveyed by the Society for Human Resource Management plan to give employees subsidies next year so they can buy their own coverage on private insurance exchanges.

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Sales of US new homes soar in August

WASHINGTON (AP) — U.S. sales of new homes surged in August, led by a wave of buying in the West and Northeast.

The Commerce Department said Wednesday that new-home sales climbed 18 percent last month to a seasonally adjusted annual rate of 504,000. The report also revised up the July sales rate to 427,000 from 412,000.

Newly constructed homes sold at the fastest clip since May 2008. It’s a clear sign of improvement for a real estate market that has been muddled in recent months, as the rebound in sales following the housing bust began to slow.

Sales of new homes are up 33 percent over the past 12 months. Median prices for new homes have risen nearly 8 percent during the same period to $275,600.

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Report: Treasury OKs big pay raises for GM, Ally

WASHINGTON (AP) — The U.S. Treasury Department continued to approve “excessive” pay raises for top executives at General Motors and its former consumer finance arm, both of which received taxpayer-funded bailouts during the financial crisis, a new government report says.

The government watchdog that oversees the $475 billion bailout said Treasury approved cash salaries exceeding $500,000 last year for 16 of the 47 top executives at General Motors Corp. and Ally Financial Inc. Treasury allowed total pay packages, including company stock, of at least $1 million for every top executive at the two companies, according to the report released Wednesday by the special inspector general for the Troubled Asset Relief Program.

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Businesses won’t have to return BP spill payouts

NEW ORLEANS (AP) — BP wants its money back — hundreds of millions of dollars of it — but a federal judge said Wednesday that the oil giant must keep its promises to the companies it compensated for losses they blamed on the 2010 Gulf oil spill.

BP argued that a flawed funding formula enabled many businesses to overestimate spill-related claims, and some “weren’t warranted at all.”

U.S. District Judge Carl Barbier agreed several weeks ago to change the compensation formula for any future payments, but he ruled Wednesday that a deal is a deal when it comes to money BP has already paid out.

Under that deal, claimants agreed to drop their lawsuits, and BP agreed that no future court action could change their payments.

The ruling thwarts BP’s latest attempt to control its soaring liability from the spill, which may be nearing $50 billion.

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By The Associated Press=

The Dow Jones Industrial average rose 154.19 points, or 0.9 percent, to 17,210.06. The Standard & Poor’s 500 index added 15.53 points, or 0.8 percent, to 1,998.30. The Nasdaq composite rose 46.53 points, or 1 percent, to 4,555.22.

Benchmark U.S. crude rose $1.24 to close at $92.80 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, rose 10 cents to close at $96.95 on the ICE Futures exchange in London. Wholesale gasoline rose 3.5 cents to close at $2.664 a gallon. Heating oil rose 0.6 cent to close at $2.689 a gallon. Natural gas rose 9.5 cents to close at $3.911 per 1,000 cubic feet.