The daily business briefing: October 8, 2021
Musk says Tesla will move HQ from California to Texas, the Senate passes a deal to avert a debt default, and more
Musk says Tesla moving HQ from California to Texas
Tesla CEO Elon Musk announced Thursday that the electric-car company is moving its headquarters from Silicon Valley to Austin, Texas. Musk said Tesla was nearing the limits of its capacity in California, although it plans to keep growing in the state. Musk said Tesla will expand its factory in Fremont, California, where more than 10,000 workers build the Model S, X, Y, and 3 vehicles. "This is not a matter of Tesla leaving California," Musk said at a company shareholder meeting. Musk has been forecasting a move to Texas since May 2020, when he tweeted displeasure at California COVID-19 safety precautions he said were hurting production. On Thursday, Musk said the move was necessary because a shortage of affordable housing limited "how big you can scale in the Bay Area."
Senate passes short-term deal to prevent federal debt default
The Senate on Thursday passed a deal to extend the federal debt ceiling into December and avert a looming catastrophic and historic default. After prodding by GOP leaders, 11 Republicans joined every Democrat in voting to advance the bill, narrowly beating a GOP filibuster. The agreement raises the debt limit by $480 billion, enough to last until Dec. 3. Senate Majority Leader Chuck Schumer (D-N.Y.) hammered out the agreement with Senate Minority Leader Mitch McConnell (R-Ky.), who proposed the short-term fix on Wednesday. McConnell said the reprieve would give Democrats time to work out a long-term debt limit increase on their own using a process called budget reconciliation, which would let them bypass a GOP filibuster. The House is expected to take up the bill on Tuesday.
Biden urges companies to lead on vaccine mandates
President Biden on Thursday urged private companies to require coronavirus vaccinations for workers. Biden last month announced a vaccine mandate affecting 80 million workers at companies with more than 100 employees. A lengthy Occupational Safety and Health Administration rule-making process could prevent it from kicking in for weeks, but Biden said companies could take the initiative and get started now. "Businesses have more power than ever before to change the arc of this pandemic and save lives," Biden said on a trip to Illinois. Data released in September indicated that unvaccinated people are 11 times more likely to die from COVID-19 than vaccinated people. A growing number of big companies have said they would enforce vaccine mandates, but several Republicans have vowed to challenge them.
Weekly jobless claims fall
The number of Americans submitting new applications for jobless benefits fell to a seasonally adjusted 326,000, down from 364,000 the week before, the Labor Department reported Thursday. The figure came in below the 345,000 forecast by Dow Jones, boosting hopes that hiring will strengthen this fall as a coronavirus surge fueled by the highly infectious Delta variant eases. The drop came after three straight weeks of rising jobless claims. Continuing claims for those filing for benefits for two or more weeks also fell by 97,000 to 2.71 million.
The report came ahead of the Labor Department's monthly jobs report, which comes out at 8:30 a.m. ET on Friday. Economists expect it to show that U.S. nonfarm employers added 500,000 jobs last month, nudging the unemployment rate down to 5.1 percent.
Stock futures mixed ahead of September employment report
U.S. stock index futures were mixed early Friday ahead of the September jobs report. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up by less than 0.1 percent several hours before the opening bell. Futures for the tech-heavy Nasdaq were down by less than 0.1 percent. The S&P 500 gained 0.8 percent on Thursday after Senate leaders reached a short-term deal aiming to prevent a catastrophic default. Stocks are headed for what could be their best week since late August. Surging energy prices and Congress' clash over the debt ceiling have contributed to volatile trading recently, with the S&P 500 making swings of at least 1 percent on three out of four days this week.