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    Silicon Valley Bank’s Collapse Causes Strain for Young Companies

    Young companies raced to get their money out of the bank, which was central to the start-up industry. Some said they could not make payroll.Ashley Tyrner opened an account with Silicon Valley Bank for her company, FarmboxRx, two years ago. She was setting out to raise venture capital and knew the bank was a go-to for the start-up industry.On Thursday, after reading about financial instability at the bank, she rushed to move FarmboxRx’s money into two other bank accounts. Her wire transfers didn’t go through. And on Friday, Silicon Valley Bank collapsed, tying up cash totaling eight figures for her company, which delivers food to Medicare and Medicaid participants.“None of my reps will call me back,” Ms. Tyrner said. “It’s the worst 24 hours of my life.”Her despair was part of the fallout across the start-up ecosystem from the failure of Silicon Valley Bank. Entrepreneurs raced to get loans to make payroll because their money was frozen at the bank. Investors doled out and asked for advice in memos and on emergency conference calls. Lines formed outside the bank’s branches. And many in the tech industry were glued to Twitter, where the collapse of a linchpin financial partner played out in real time.The implosion rattled a start-up industry already on edge. Hurt by rising interest rates and an economic slowdown over the past year, start-up funding — which had been supercharged by low interest rates for years — has shriveled, resulting in mass layoffs at many young companies, cost-cutting and slashed valuations. Investments in U.S. start-ups dropped 31 percent last year to $238 billion, according to PitchBook.On top of that, the fall of Silicon Valley Bank was especially troubling because it was the self-described “financial partner of the innovation economy.” The bank, founded in 1983 and based in Santa Clara, Calif., was deeply entangled in the tech ecosystem, providing banking services to nearly half of all venture-backed technology and life-science companies in the United States, according to its website.Silicon Valley Bank was also a bank to more than 2,500 venture capital firms, including Lightspeed, Bain Capital and Insight Partners. It managed the personal wealth of many tech executives and was a stalwart sponsor of Silicon Valley tech conferences, parties, dinners and media outlets.The bank was a “systemically important financial institution” whose services were “immensely enabling for start-ups,” said Matt Ocko, an investor at the venture capital firm DCVC.On Friday, the Federal Deposit Insurance Corporation took control of Silicon Valley Bank’s $175 billion in customer deposits. Deposits of up to $250,000 were insured by the regulator. Beyond that, customers have received no information on when they will regain access to their money.That left many of the bank’s clients in a bind. On Friday, Roku, the TV streaming company, said in a filing that roughly $487 million of its $1.9 billion in cash was tied up with Silicon Valley Bank. The deposits were largely uninsured, Roku said, and it did not know “to what extent” it would be able to recover them.Josh Butler, the chief executive of CompScience, a workplace safety analytics start-up, said he was unable to get his company’s money out of the bank on Thursday or before the bank’s collapse on Friday. The last day, he said, had been nerve-racking.“Everyone from my investors to employees to my own mother are reaching out to ask what’s going on,” Mr. Butler said. “The big question is how soon will we be able to get access to the rest of the funds, how much if at all? That’s absolutely scary.”CompScience was pausing spending on marketing, sales and hiring until it solved more pressing concerns, like making payroll. Mr. Butler said he had been prepared for a big crunch, given the doom and gloom swirling around the industry.But “did I expect it to be Silicon Valley Bank?” he said. “Never.”Camp, a start-up selling gifts and experiences for children, added a banner to its website on Friday that read: “OUR BANK JUST CLOSED — SO EVERYTHING IS ON SALE!”The site offered 40 percent off with the promo code “bankrun” alongside a meme that included the words “i never liked the bay area” and “how could this happen.” A Camp representative said the sale was related to Silicon Valley Bank’s collapse and declined to comment further.Sheel Mohnot, an investor at Better Tomorrow Ventures, said his venture firm advised its start-ups on Thursday to move money into Treasuries and open other bank accounts out of prudence.“Once a bank run has started, it’s hard to stop,” he said.Some of the start-ups that Mr. Mohnot’s firm has invested in chose not to move their money, while others were unable to act in time before the bank failed, he said. Now their biggest concern was making payroll, followed by figuring out how to pay their bills, he said.Haseeb Qureshi, an investor at Dragonfly, a cryptocurrency-focused venture capital firm, said his firm was counseling several of its start-ups that had funds tied up in Silicon Valley Bank.“The first thing you think about is survival,” he said. “It’s a harrowing moment for a lot of people.”Other start-ups were benefiting from the bank’s collapse. On Friday afternoon, Brex, a provider of financial services to start-ups, unveiled an “emergency bridge line of credit” for new customers migrating from Silicon Valley Bank. The service was aimed at helping those start-ups shore up expenses like payroll.For part of Thursday, Brex received billions of dollars in deposits from several thousand companies, a person with knowledge of the situation said. The company rushed to open accounts as fast as possible to meet demand, with its chief executive reviewing applications, the person said.But by Thursday afternoon, the incoming deposits to Brex slowed to a halt, as founders began reporting that Silicon Valley Bank’s online portal had frozen and customers were no longer able to access their money, the person said.A man trying to enter a Silicon Valley Bank branch in Manhattan on Friday. David Dee Delgado/ReutersMany venture capital firms had also used lines of credit with Silicon Valley Bank to make investments quickly and smoothly, Mr. Ocko of DCVC said. Those lines of credit are now frozen, he said.Mr. Ocko added that he did not foresee systemic collapse among start-ups and tech, but predicted “pain and friction and uncertainty and complexity in the middle of what’s already a painful macro environment for start-ups.”To stave off any taint from Silicon Valley Bank, some venture funds blasted updates to their backers. Sydecar, a service that facilitates venture capital deals, shared a list of the banks it uses that were not affected. Origin Ventures promised to help companies “create contingency plans around working capital.”Another venture firm outlined its exposure to Silicon Valley Bank and apologized in a memo, saying, “This is the worst email I’ve ever had to write to you.” The memo was seen by The New York Times.Entrepreneurs also weighed into group chats with the dollar amounts that they could no longer tap at Silicon Valley Bank or what they had managed to pull out, ranging from hundreds of thousands to tens of millions, according to communications viewed by The Times.A trickle of customers walked up to Silicon Valley Bank’s branch in Menlo Park, Calif., on Friday afternoon and discovered that its doors were locked. Some read an F.D.I.C. notice, taped by the entrance, that said the regulator was in control.One person who tried the doors was carrying a Chick-fil-A bag. A woman in the office cracked a door open, asked who the person was and then took the bag with a smile. Then she pulled the door shut.Reporting was contributed by More

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    Jobs Report Gives Fed a Mixed Signal Ahead of Its March Decision

    The Federal Reserve is anxiously parsing incoming data as it decides between a small or a large rate move this month.Federal Reserve officials received a complicated signal from February’s employment report, which showed that job growth retained substantial momentum nearly a year into the central bank’s campaign to slow the economy and cool rapid inflation. But it also included details hinting that the softening the Fed has been trying to achieve may be coming.Policymakers have raised interest rates from near zero to above 4.5 percent over the past year, and Jerome H. Powell, the Fed chair, signaled this week that the size of the central bank’s March 22 rate move would hinge on the strength of incoming data — making Friday’s employment report a critical focal point for investors.But the figures painted a complicated picture. Employers added 311,000 workers last month, which were more than the 225,000 expected and a sign that the pace of hiring has cooled little, if at all, over the past year. At the same time, wage growth moderated to its slowest monthly pace since February 2022, and the unemployment rate ticked up slightly.“It’s exactly what I wasn’t hoping for, which is a mixed report,” said Michael Feroli, chief U.S. economist at J.P. Morgan.That makes determining the Fed’s next steps more challenging.Officials raised rates in large three-quarter-point increments four times in 2022, making borrowing sharply more expensive in hopes of restraining a hot economy. But they had been slowing the pace of adjustment for months, stepping down to half a point in December and a quarter point in February. Policymakers thought they had reached the point where interest rates were high enough to significantly cool the economy, so they expected to soon stop raising rates and simply hold them at a high level for a while.But data from early 2023 have surprised the central bank. The labor market, inflation and consumer spending all showed unexpected signs of strength, which made policymakers question whether they might need to raise rates by more — or even return to a faster pace of adjustment. That’s why central bankers have been looking to incoming data from February for a sense of whether the robust January figures were a one-off or a genuine sign of strength.Employers added 311,000 workers last month, which were more than expected and a sign that the pace of hiring has cooled little.Hiroko Masuike/The New York Times“If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” Mr. Powell told lawmakers this week, emphasizing that “no decision has been made on this.”Friday’s figures suggested that hiring is genuinely resilient: Employers added more than half a million workers in the first month of the year, even after revisions.But the slowdown in wage growth could be good news for the central bank. Officials have been nervously eyeing rapid wage gains, fretting that it will be difficult for inflation to cool when employers are paying more and trying to make up for those climbing labor bills by passing the costs along to consumers.That said, a closely watched measure of wages for production workers who are not managers — rank-and-file employees, basically — held up. Wage data bounce around, and economists often watch that measure for a clearer reading of underlying momentum in pay gains.Priya Misra, head of global rates strategy at TD Securities, said she thought the report made the size of the Fed’s next rate move a “tossup.” The pace of hiring is likely to suggest to officials that the labor market is still hot, but the other details could give them some room to watch and wait.“It’s not an obvious slam dunk for 50,” Ms. Misra said, referring to a half-point move.The upshot, she said, is that investors will need to closely watch the Consumer Price Index report that is scheduled for release on Tuesday. The fresh figures will show how hot inflation was running in February, giving central bankers a final critical reading on where the American economy stands heading into their decision.“It makes this the most important C.P.I. report — again,” Ms. Misra said.Economists in a Bloomberg survey expect monthly inflation readings — which give a clearer sense of iterative progress on cooling price increases — to slow on an overall basis, but to hold steady at 0.4 percent after volatile food and fuel prices are stripped out.The State of Jobs in the United StatesThe labor market continues to display strength, as the Federal Reserve tries to engineer a slowdown and tame inflation.Mislabeling Managers: New evidence shows that many employers are mislabeling rank-and-file workers as managers to avoid paying them overtime.Energy Sector: Solar, wind, geothermal, battery and other alternative-energy businesses are snapping up workers from fossil fuel companies, where employment has fallen.Elite Hedge Funds: As workers around the country negotiate severance packages, employees in a tiny and influential corner of Wall Street are being promised some of their biggest paydays ever.Immigration: The flow of immigrants and refugees into the United States has ramped up, helping to replenish the American labor force. But visa backlogs are still posing challenges.One challenge is that the numbers will come out during the Fed’s pre-meeting quiet period, which is in place all of next week, so central bankers will not be able to tell the world how they are interpreting the new data.Further complicating the picture: Glimmers of stress are surfacing in the banking system, ones that are tied to the Fed’s rapid rate moves over the past 12 months. Silicon Valley Bank, which lent to tech start-ups and failed on Friday, was squeezed partly by the jump in interest rates.That development — and the possibility that it might herald trouble at other regional banks — could also matter to how the Fed understands the rate outlook.“It shows us: No, we haven’t really digested all of the effects of what the Fed has done so far,” said Aneta Markowska, chief financial economist at Jefferies. “There’s still a lot of policy pain in the pipeline that hasn’t hit the economy yet.”William Dudley, a former president of the Federal Reserve Bank of New York, said there are probably other banks that loaded up on longer-term assets when rates were low and are now suffering from that as short-term borrowing costs rise. That makes those older assets less attractive — and less valuable — if a bank has to sell them to raise cash.But he said that Silicon Valley Bank was probably an extreme example, and that it’s possible the whole situation will have blown over by the time the Fed meets next.“By a week and a half from now, this whole thing could be over,” he said. He added, though, that he didn’t have much clarity on how big the Fed’s next rate move would be, in any case.“I am totally confused about the Fed at this point,” he said. More

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    Just like that: Market pricing swings back to quarter-point Fed rate hike

    Market pricing Friday morning shifted back toward the probability of a quarter-point interest rate hike this month from the Federal Reserve.
    A smaller-than-expected wage increase and the implosion of Silicon Valley Bank appear to have changed traders’ minds.

    A trader works on the floor during morning trading at the New York Stock Exchange (NYSE) on March 10, 2023 in New York City. 
    Spencer Platt | Getty Images

    It seemed like only yesterday that markets were sure that a tougher Federal Reserve was going to raise its benchmark interest rate a half percentage point at its meeting in less than two weeks.
    That’s because it, in fact, was yesterday. On Thursday, traders in the futures market were almost certain the Fed would take a more hawkish monetary policy stance and double up on the quarter-point hike it approved last month.

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    But one bank implosion and a cooperative jobs report later, and the market has changed its mind.
    The probability of a 0.25 percentage point increase rose above 70% at one point in morning trading, according to the CME Group, indicating that a momentary bout of Fed-induced panic had passed.
    “In all, the data do not argue for a 50 [basis point] rate hike by the Fed on March 22 despite the strong payroll advance,” said Kathy Bostjancic, chief economist at Nationwide.
    Nonfarm payrolls increased by 311,000 in February, well ahead of the Wall Street estimate for 225,000 but still a step down from January’s 504,000.
    Perhaps more important, average hourly earnings rose just 0.24% for the month, a 4.6% year-over-year gain that was below the 4.8% estimate. That’s a critical metric for the inflation-fighting Fed that no doubt eyed Friday’s Labor Department report as closely as it will be watching next week for consumer and producer prices in February.

    “The Fed can take comfort in the rise in the supply of labor and the easing of upward pressure on wages to maintain a 25 [basis point] rate increase,” Bostjancic added. A basis point is 0.01 percentage point.
    Economists at both Bank of America and Goldman Sachs concurred, saying Friday morning that they are standing behind their forecasts for a quarter-point hike at the March 21-22 meeting of the Federal Open Market Committee. Both banks used the phrase “close call” on their outlooks, noting that the upcoming week of data will play a big role in the final Fed decision.
    “The February report was overall on the softer side,” Michael Gapen, chief U.S. economist at Bank of America, said in a client note. “While payrolls topped our expectations, the rise in the unemployment rate and relatively weak average hourly earnings data point to a little better balance between labor supply and demand.”
    What made the shift to 25 basis points notable was that at one point Thursday the outlook for a 50 basis point move was above 70%, as gauged by the CME’s FedWatch gauge of trading in federal funds futures contracts. That came following remarks from Fed Chairman Jerome Powell, who told Congress this week that if inflation data didn’t ease, the central bank likely would push rates faster and higher than previously expected.
    However, that pricing began to come in during a sharp slide in the stock market and fears that the collapse of Silicon Valley Bank could be indicative of contagion in the financial sector. The shift towards the quarter-point probability became more pronounced Friday morning, though trading was volatile and the half-point move was gaining more momentum.
    “The move down on 50 basis point odds was hard to separate from the collapse of SVB,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “That has to be in the thinking of Fed: Is this the thing that’s breaking?”

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    Unemployment for Black and Hispanic women rose in February, but more workers join the labor force

    The unemployment rate for Black and Hispanic women rose in February, but so did the number of eligible adults looking for jobs.
    Black women saw their unemployment rate jump to 5.1% from 4.7%. Among Hispanic women, it jumped to 4.8% from 4.4%.
    Both groups saw their labor force participation rates rise.

    Women walk past by a “Now Hiring” sign outside a store on August 16, 2021 in Arlington, Virginia.
    Olivier Douliery | AFP | Getty Images

    The unemployment rate for Black and Hispanic women rose in February, but so did the number of people looking for jobs.
    The U.S. unemployment rate ticked up to 3.6% in February from 3.4% the prior month, according to the U.S. Bureau of Labor Statistics on Friday. Women aged 20 and over in the labor force tracked that move, with the unemployment rate rising slightly to 3.2% from 3.1%.

    The difference is more stark among Black and Hispanic women. Black women saw their unemployment rate jump to 5.1% from 4.7%. Among Hispanic women, it jumped to 4.8% from 4.4%.

    Both groups saw their labor force participation rates — a metric that shows how many workers are employed or in search of work — rise.
    For Black women, it jumped to 63% from 62.6%, while the employment-population ratio that shows the proportion of people employed ticked slightly higher to 59.8% from 59.7%. For Hispanic women, the labor force participation rate rose slightly to 61.3% from 61.1%, while the employment-population ratio stayed unchanged at 58.4%.
    That could suggest broader weakness in the labor market even amid a stronger-than-expected jobs report, according to AFL-CIO chief economist William Spriggs. In February, the U.S. economy added 311,000 payrolls, though the unemployment rate ticked up and wages rose slightly.
    “The Federal Reserve has characterized the labor market as, ‘Oh, the labor market is so tight, employers can’t find anybody,’ but women went out, they looked, and some of them did get jobs, but a lot of them didn’t,” Spriggs said.

    “So obviously, there’s a lot more workers than available jobs. And there’s a lot of room left in the labor market to recover,” he added.

    Still, Valerie Wilson, director at the Economic Policy Institute’s program on race, ethnicity and the economy, urged against putting too much stock into one month’s report, noting that the rising labor force participation rate shows more confidence in the labor market.
    She attributed lower employment among Black women to a slower recovery in the public sector, which employs a more significant share of Black workers in education. Meanwhile, leisure and hospitality continues to recover from losses during the pandemic, which boosts employment among Hispanic women.
    Wilson pointed out an upbeat finding in this latest payrolls report.
    “One of the bright spots or positive things in this report in terms of women’s employment is that, again, looking at industries that employ a significant number of women, we saw increased employment in those,” said Wilson, citing rises in health care, government, retail, leisure and hospitality sectors.
    “So the fact that those industries are still adding jobs suggests to me that there are continuing to be additional employment opportunities for women at least as far as the demographics of those industries are concerned,” she said.
    -CNBC’s Gabriel Cortes contributed to this report.

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    Here’s where the jobs are for February 2023 — in one chart

    Leisure and hospitality has been consistently one of the strongest sectors as the U.S. economy has recovered from the peak of the Covid-19 pandemic.
    Restaurants and bars accounted for 70,000 job gains last month.
    However, the sector is still 2.4% below its pre-pandemic employment level, according to the Labor Department.

    The U.S. labor market surprised to the upside yet again in February, powered by continued strength in the service sectors of the economy.
    The leisure and hospitality sector added 105,000 jobs last month, according to the Labor Department, accounting for roughly a third of the total 311,000 jobs gain.

    The health care and social assistance segment was another large contributor, adding nearly 63,000 jobs.
    Leisure and hospitality has been consistently one of the strongest sectors as the U.S. economy has recovered from the peak of the Covid-19 pandemic, which saw bars and restaurants close in large numbers across the country. Food and drink businesses accounted for 70,000 job gains last month.
    However, the sector is still 2.4% below its pre-pandemic employment level, according to the Labor Department.
    “We’re still short,” said Steve Rick, chief economist for CUNA Mutual Group. “We still don’t have the same amount of people working at hotels and restaurants as we did in 2019. So that’s why we’re still adding jobs at a pretty feverish pace in those areas.”
    However, there are some weaknesses in other parts of the economy. The 25,000-job decline in information technology shows the impact of layoffs at tech companies, while transportation and manufacturing jobs also retreated.

    Transportation and warehousing jobs are now down 42,000 since October, according to the Labor Department.
    “We’re seeing a bifurcation of the economy between the goods and services sector,” Rick said.

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    Payrolls rose 311,000 in February, more than expected, showing solid growth

    Nonfarm payrolls rose by 311,000 in February, above the 225,000 Dow Jones estimate.
    The unemployment rate increased to 3.6%, above expectations.
    Average hourly earnings climbed 4.6% from a year ago, less than expected, in a positive sign for inflation.
    Leisure and hospitality, retail, and government led job creation by sector.

    Job creation decelerated in February but was still stronger than expected despite the Federal Reserve’s efforts to slow the economy and bring down inflation.
    Nonfarm payrolls rose by 311,000 for the month, the Labor Department reported Friday. That was above the 225,000 Dow Jones estimate and a sign that the employment market is still hot.

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    The unemployment rate rose to 3.6%, above the expectation for 3.4%, amid a tick higher in the labor force participation rate to 62.5%, its highest level since March 2020.
    The survey of households, which the Bureau of Labor Statistics uses to compute the unemployment rate, showed a smaller 177,000 increase. A more encompassing unemployment measure that includes discouraged workers and those holding part-time jobs for economic reasons rose to 6.8%, an increase of 0.2 percentage point.
    There also was some good news on the inflation side, as average hourly earnings climbed 4.6% from a year ago, below the estimate for 4.8%. The monthly increase of 0.2% also was below the 0.4% estimate.

    Though the jobs number was stronger than expectations, February’s growth represented a deceleration from an unusually strong January. The year opened with a nonfarm payrolls gain of 504,000, a total that was revised down only slightly from the initially reported 517,000. December’s total also was taken down slightly, to 239,000, a decrease of 21,000 from the previous estimate.
    Stocks were mixed after the release, while Treasury yields were mostly lower.

    “Mixed is an apt descriptor. There’s something for everybody in there,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “We’re still in a recession for certain parts of the economy.”
    The jobs report likely keeps the Fed on track on raise interest rates when it meets again March 21-22. But traders priced in less of a chance that the central bank will accelerate to a 0.5 percentage point increase, dropping the likelihood to 48.4%, or about a coin flip, according to a CME Group estimate.
    “Perhaps the best news from this report was the easing of wage pressures,” said John Lynch, chief investment officer at Comerica Wealth Management. “A drop in the largest costs for businesses is a welcome development. Nonetheless, 50 basis points is still on the table for the March policy meeting, given recent economic strength and dependent on next week’s [consumer price index] report.”
    Leisure and hospitality led employment gains, with an increase of 105,000, about in line with the six-month average of 91,000. Retail saw a gain of 50,000. Government added 46,000, and professional and business services saw an increase of 45,000.

    But information-related jobs declined 25,000, while transportation and warehousing lost 22,000 jobs for the month.
    “It’s no longer accurate to say without reservation that the labor market is a bright spot in the economy. From 35,000 feet, the picture still looks sterling, but digging an inch beneath the surface, there are clear pockets of softening,” said Aaron Terrazas, chief economist at jobs review site Glassdoor.
    Terrazas noted that hiring has slowed in “risk-sensitive” sectors. He added that, “The challenge for policymakers is that these weak points are a small part of the overall economy, but potentially have linkages lurking that have yet to emerge.”
    The jobs report comes at a critical time for the U.S. economy, and consequently for Fed policymakers.
    Over the past year, the central bank has raised its benchmark interest rate eight times, taking the federal funds rate to a range of 4.5%-4.75%.
    As inflation data appeared to cool toward the end of 2022, markets expected the Fed in turn to slow the pace of its rate hikes. That happened in February, when the Federal Open Market Committee approved a 0.25 percentage point increase and indicated that smaller hikes would be the case going forward.
    However, Fed Chairman Jerome Powell this week told Congress that recent metrics show inflation is back on the rise, and if that continues to be the case, he expects rates to increase to a higher level than previously expected. Powell specifically noted the “extremely tight” labor market as a reason why rates are likely to continue rising and stay elevated.
    He also indicated that the increases could be higher than the February hike.
    Though Powell emphasized that no decision has been made for the March FOMC meeting, markets recoiled at his comments. Stocks sold off sharply, and a gulf between 2- and 10-year Treasury yields widened, a phenomenon known as an inverted yield curve that has preceded all post-World War II recessions.
    Correction: The unemployment rate rose to 3.6%, above the expectation for 3.4%. An earlier version misstated the direction in relation to the estimate.

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    Why Russia Has Such a Strong Grip on Europe’s Nuclear Power

    New energy sources to replace oil and natural gas have been easier to find than kicking the dependency on Rosatom, the state-owned nuclear superstore.The pinched cylinders of Russian-built nuclear power plants that dot Europe’s landscape are visible reminders of the crucial role that Russia still plays in the continent’s energy supply.Europe moved with startling speed to wean itself off Russian oil and natural gas in the wake of war in Ukraine. But breaking the longstanding dependency on Russia’s vast nuclear industry is a much more complicated undertaking.Russia, through its mammoth state-owned nuclear power company, Rosatom, dominates the global nuclear supply chain. It was Europe’s third-largest supplier of uranium in 2021, accounting for 20 percent of the total. With few ready alternatives, there has been scant support for sanctions against Rosatom — despite urging from the Ukrainian government in Kyiv.For countries with Russian-made reactors, reliance runs deep. In five European Union countries, every reactor — 18 in total — were built by Russia. In addition, two more are scheduled to start operating soon in Slovakia, and two are under construction in Hungary, cementing partnerships with Rosatom far into the future.For years, the operators of these nuclear power plants had little choice. Rosatom, through its subsidiary TVEL, was virtually the only producer of the fabricated fuel assemblies — the last step in the process of turning uranium into the nuclear fuel rods — that power the reactors.Even so, since the invasion of Ukraine in February 2022, some European countries have started to step away from Russia’s nuclear energy superstore.The Czech Republic’s energy company, CEZ, has signed contracts with Pennsylvania-based Westinghouse Electric Company and the French company Framatome to supply fuel assemblies for its plant in Temelin.Finland canceled a troubled project with Rosatom to build a nuclear reactor and hired Westinghouse to design, license and supply a new fuel type for its plant in Loviisa after its current contracts expire.“The purpose is to diversify the supply chain,” said Simon-Erik Ollus, an executive vice president at Fortum, a Finnish energy company.The Leningrad Nuclear Power Plant near St. Petersburg, Russia. Rosatom, a Russian company, dominates the global nuclear supply chain.Sezgin Pancar/Anadolu Agency via Getty ImagesBulgaria signed a new 10-year agreement with Westinghouse to provide fuel for its existing reactors. And last week, it moved ahead with plans for the American company to build new nuclear reactor units. Poland is about to construct its first nuclear power plant, which will feature three Westinghouse reactors.The State of the WarRussian Strikes: Moscow fired an array of weapons, including its newest hypersonic missiles, in its biggest aerial attack on Ukraine in weeks, knocking out power in multiple regions.Bakhmut: Even as Ukrainian and Russian leaders predicted that the fall of the city could open the way for a broader Russian offensive, the U.S. intelligence chief said that the Kremlin’s forces were too depleted to wage such a campaign.Nord Stream Pipelines: The sabotage in September of the pipelines has become one of the central mysteries of the war. A Times investigation offers new insight into who might have been behind it.Slovakia and even Hungary, Russia’s closest ally in the European Union, have also reached out to alternative fuel suppliers.“We see a lot of genuine movement,” said Tarik Choho, president of nuclear fuel unit at Westinghouse, adding that the Ukraine war accelerated Europe’s search for new suppliers. “Even Hungary wants to diversify.”William Freebairn, senior managing editor for nuclear energy at S&P Commodity Insights, said Russia’s march into Ukraine last year in some ways marked “a sea change.”“Within days of the invasion,” he said, “just about every country that operated a Russian reactor started looking for alternate supply.”In Ukraine, serious efforts to chip away at Russian nuclear dominance began in 2014 after President Vladimir V. Putin of Russia sent troops to occupy territory in Crimea and the eastern Donbas region. Ukraine, whose 15 Soviet-era reactors provided half the country’s electricity, signed a deal with Westinghouse to expand its fuel contract.It took roughly five years between the start of the design process and the final delivery of the first fuel assembly, according to the International Energy Agency.Ukraine “blazed a commercial trail,” Mr. Freebairn said. In June, Ukraine signed another contract with Westinghouse to eventually provide all its nuclear fuel. The company will also build nine power plants and establish an engineering center in the country.Technicians in a nuclear plant in Mochovce, Slovakia, last year. Slovakia is among the European countries seeking nuclear fuel suppliers other than Russia.Radovan Stoklasa/ReutersStill, a worldwide turn away from Russia’s nuclear industry would be a slog: The nuclear supply chain is exceptionally complex. Establishing a new one would be expensive and take years.At the same time, Rosatom has proved uniquely successful as both a business enterprise and a vehicle for Russian political influence. Much of its ascendancy is due to what experts have labeled a “one-stop nuclear shop” that can provide countries with an all-inclusive package: materials, training, support, maintenance, disposal of nuclear waste, decommissioning and, perhaps most important, financing on favorable terms.And with a life span of 20 to 40 years, deals to build nuclear reactors compel a long-term marriage.Russia’s tightest grip is on the market for nuclear fuel. It controls 38 percent of the world’s uranium conversion and 46 percent of the uranium enrichment capacity — essential steps in producing usable fuel.“That’s equal to all of OPEC put together in terms of market share and power,” said Paul Dabbar, a visiting fellow at the Center on Global Energy Policy at Columbia University, referring to the oil dominance of the Organization of the Petroleum Exporting Countries.As with oil and natural gas, the cost of nuclear fuel supplies has risen over the past year, putting more than $1 billion from exports into Russia’s treasury, according to a report from the Royal United Services Institute, a security research organization in London.The American nuclear power industry gets up to 20 percent of its enriched uranium from Russia, the maximum allowed by a recent nonproliferation treaty, according to the International Energy Association. France imports 15 percent. Framatome, which is owned by state-backed nuclear power operator, Électricité de France, or EDF, signed a cooperation agreement with Rosatom in December 2021, two months before Russia’s invasion, that is still in effect. Framatome declined to comment.The control room of a nuclear power plant in Paks, Hungary, in 2019. Two Rosatom nuclear plants are under construction in Hungary.Tamas Soki/EPA, via ShutterstockAnd even with the slate of new fuel agreements in Europe with non-Russian sources, deliveries won’t begin for at least a year, and in some cases several years.Around a quarter of the European Union’s electricity supply comes from nuclear power. With pending climate disaster prompting a worldwide push to decrease the overall use of fossil fuels, nuclear energy’s role in the future fuel mix is expected to increase.Still, analysts argue that even without formal sanctions, Russia’s position as a nuclear supplier has been permanently compromised.At the height of the debate in Germany last year over whether to keep its two remaining nuclear power plants online because of the war, their reliance on uranium enriched by Russia for the fuel rods emerged as one of the arguments against extending their lives. The last two reactors are to be shut down next month.And when Poland’s Council of Ministers approved the agreement in November for Westinghouse to build the country’s first nuclear power plant, the resolution cited “the need for permanent independence from energy supplies and energy carriers from Russia.”Mr. Choho at Westinghouse was confident about the company’s ability to compete with Rosatom in Europe, estimating that it eventually could capture 50 to 75 percent of that nuclear market. Westinghouse has also signed an agreement with the Spanish energy company Enusa to cooperate on fabricating fuel for Russian-made reactors.A nuclear power plant in Wattenbacherau, Germany, last year. The country’s last two reactors are to be shut down next month.Laetitia Vancon for The New York TimesBut outside the European Union and United States, in countries where support for Russia’s government has held up, Rosatom’s one-stop shopping and financing remain enticing. Russian-built reactors can be found in China, India and Iran as well as Armenia and Belarus. Construction has begun on Turkey’s first nuclear power plant, and Rosatom has a memorandum of understanding with 13 countries, according to the International Energy Association.As a new report in the journal Nature Energy concluded, while the war “will undermine Rosatom’s position in Europe and damage its reputation as a reliable supplier,” its global standing “may remain strong.”Melissa Eddy More

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    UK economy rebounds with stronger-than-expected January GDP print

    Both the Bank of England and the Office for Budget Responsibility have forecast a five-quarter recession beginning in the first quarter of 2023, but the data has so far defied expectations.
    The U.K. remains the only country in the G-7 (Group of Seven) major economies that has yet to fully recover its lost output during the Covid-19 pandemic.

    City workers in Paternoster Square, where the headquarters of the London Stock Exchange is based, in the City of London, UK, on Thursday, March 2, 2023.
    Bloomberg | Bloomberg | Getty Images

    LONDON — The U.K. economy grew by 0.3% in January, official figures showed on Friday, exceeding expectations as it continues to fend off what economists see as an inevitable recession.
    Economists polled by Reuters had projected a 0.1% monthly increase in GDP. GDP was flat over the three months to the end of January, the Office for National Statistics said.

    “The services sector grew by 0.5% in January 2023, after falling by 0.8% in December 2022, with the largest contributions to growth in January 2023 coming from education, transport and storage, human health activities, and arts, entertainment and recreation activities, all of which have rebounded after falls in December 2022,” the ONS found.
    Production output fell by 0.3% in January after growing 0.3% in December, while the construction sector dropped 1.7% in January after flatlining the previous month.
    The U.K. economy showed no growth in the final quarter of 2022 to narrowly avoid a recession — commonly defined as two quarters of negative growth — but shrunk by 0.5% in December.
    The U.K. remains the only country in the G-7 (Group of Seven) major economies that has yet to fully recover its lost output during the Covid-19 pandemic. The ONS said Friday that monthly GDP is now estimated to be 0.2% below its pre-pandemic levels.
    Both the Bank of England and the Office for Budget Responsibility have forecast a five-quarter recession beginning in the first quarter of 2023, but the data has so far exceeded expectations.

    Despite the better-than-expected January print, economists still broadly believe activity is on a downward trajectory, as high inflation eats into household incomes and business activity.
    U.K. inflation slowed to an annual 10.1% in January, continuing to shrink after hitting a 41-year high of 11.1% in October but staying well above the Bank of England’s 2% target.

    Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, said that the “modest” January rebound suggests the economy is still on a “downbeat path.”
    “We’re likely to continue flirting with recession throughout much of 2023, as high inflation, tax rises and the lagged effect of rising interest rates shrinks consumer spending power, despite a boost from easing energy costs,” Thiru said.
    Finance Minister Jeremy Hunt will deliver the government’s budget on Wednesday and is expected to announce further measures to manage the country’s cost of living crisis.
    “The Spring Budget could have a significant impact on the U.K.’s near-term growth prospects. While extending energy support will provide some relief to struggling households, aggressive tax rises would risk eliminating any lingering momentum from the economy,” Thiru said.
    Tom Hopkins, portfolio manager at BRI Wealth Management, noted that monthly figures are difficult to read at the moment, given distortions over the last six months — such as the funeral of Queen Elizabeth II and the World Cup — which partially affected consumer services.
    “The underlying trend in the economy appears to be one of gradual contraction, thanks in part to an ongoing downtrend in retail spending,” he said. “We’re expecting a technical recession in the UK in the first half of this year, albeit one that’s not as bad as first feared.”

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