U.S. Payrolls Fall for the First Time in a Long Time
All good things must come to an end. The U.S. economy had been adding new jobs every month since 2010 as the country emerged from the Great Recession, then came the coronavirus pandemic. The latest monthly jobs numbers showed payrolls declined for the first time in ten years, plunging by 701,000 and marking the worst fall since March 2009. The historically low unemployment rate jumped from 3.5% to 4.4%. The hardest hit sector by a long shot was leisure and hospitality which lost some 459,000 jobs. Healthcare and social assistance trailed behind with a loss of 61,200 jobs. Manufacturing’s 18,000 lost jobs seem relatively tame in comparison.
KPMG Forecasts Long Recovery Ahead
L is for long. While at the start of the coronavirus outbreak many economic analysts suggested that the economy would make a V-shape recovery, a sharp decline followed by an equally sharp rebound. Now, the best case scenario is a U-shape, although many are acknowledging that an L-shape is increasingly likely as a result of 20 million forecasted U.S. job losses in Q2. The government stimulus package has billions earmarked for small and large business, but KPMG concludes that many firms will shutter before fiscal assistance arrives. Analysts also see GDP declining by 4.9-5.5% in 2020, and a recovery happening in Q4 of this year assuming that the U.S. economy re-opens in mid-June.
OneWeb Calls It Quits
Starlink’s erstwhile rival OneWeb is filing for bankruptcy. The telecommunications company which has 74 orbital satellites flying around the globe, laid off 85% of its 531 employees and filed for Chapter 11 protection. OneWeb had already raised $3.4 billion from investors including Softbank, but failed to secure more needed funding on account of the pandemic. The company has $1.7 billion in debt on its balance sheets with $238 million owed to its launch provider Arianespace. The fate of its internet-beaming constellation suspended in low-Earth orbit is unclear at this time.
SpaceX’s Starship Suffers Substantial Setback
SpaceX’s rapidly-reusable rocket Starship SN3 prototype suffered a substantial setback yesterday when it imploded during cryogenic proof testing. The test simulates pressures the spacecraft would encounter during a flight, and is similar to the one that destroyed the first Mk1 prototype in late February. CEO Elon Musk tweeted that SN3's failure “may have been a test configuration mistake,” but more research into the data is necessary. The company’s upcoming SN4 model was to be a high-altitude flight prototype, but that's likely to change as engineers try to figure out this whole pressure situation.
Tesla Sets Company First Quarter Record
Now, a bit of upbeat news that’s sure to have Tesla fanboys cheering. The electric vehicle automaker posted its best Q1 in history even while grappling with shutdowns and slowdowns as a result of the pandemic. Tesla delivered over 88,000 vehicles, beating expectations of 77,000. The company also managed to produce 102,672 vehicles over the last 3 months owning largely to its Gigafactory Shanghai in China. Tesla's 2019 Q4 still holds the company record for total deliveries with 112,000 vehicles, but the first quarter of the year is notoriously slow for the auto industry.
Stick around and check out the topical stories from last week's Weekly Roundup.