By Nate Raymond

(Reuters) – The former chief executive of Blue Bell Creameries will plead guilty to a misdemeanor charge under a deal in which prosecutors have agreed to drop fraud charges against him related to a 2015 listeria outbreak traced back to the company’s contaminated ice cream.

Paul Kruse, the company’s former president and CEO, agreed to plead guilty to having caused adulterated ice cream products to be distributed and pay a $100,000 fine under an agreement filed on Wednesday in federal court in Austin, Texas.

The deal came nearly three years after the U.S. Department of Justice first brought felony fraud charges against Kruse arising out of the deadly outbreak. His trial in August ended with a hung jury, and a retrial had been set for April.

Under the deal, which is subject to a judge’s approval, Kruse would serve no time in prison, and the Justice Department agreed to dismiss five fraud charges against him.

“The settlement confirms what Mr. Kruse has been saying from the very beginning, no one at Blue Bell ever intended to defraud its customers, and we are happy that the government has reached the same conclusion,” Chris Flood, his attorney, said in a statement.

The Justice Department had no immediate comment.

The Texas-based ice cream manufacturer in 2020 agreed to pay $19.35 million and plead guilty to charges that it shipped contaminated products linked to the outbreak.

The company ultimately recalled its ice cream in 2015 after 10 reported cases of listeria in four states were linked to its products. Three people died.

Prosecutors had accused Kruse of concealing what the company knew about the contamination of its products.

He will now plead guilty to a misdemeanor under the Food, Drug and Cosmetic Act, a law that can impose liability without regard to intent or knowledge of the tainted products.

(Reporting by Nate Raymond in Boston, Editing by Alexia Garamfalvi and Lincoln Feast.)

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WASHINGTON (Reuters) – The U.S. Federal Trade Commission is expected to vote next week on whether to send demands for information about deceptive advertising to eight social media and video streaming companies, the agency said on Thursday.

The agency did not say which social media companies would receive the demands but said that the information would be used to determine what steps they have taken to detect and remove deceptive advertising from their platforms.

Some of the biggest social media companies are Facebook and its subsidiaries Instagram and WhatsApp. Top video streaming platforms include Alphabet’s YouTube and TikTok.

The commissioners will also vote on issuing demands for information to five business credit reporting agencies, which were not named, regarding how they collect data and market their products.

The inquiries could lead to enforcement actions, depending on what it turned up, but are designed to lead to studies that could underpin future legislation or rules.

The votes are set for an open meeting on March 16.

(Reporting by Diane Bartz)

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By Sarah N. Lynch and Rachael Levy

WASHINGTON (Reuters) – Top animal welfare officials at the U.S. Department of Agriculture (USDA) were subpoenaed last year by a federal grand jury seeking to establish why they took no action against animal research breeder Envigo, despite repeatedly documenting the mistreatment of thousands of beagles, according to several people familiar with the matter.

A deputy administrator of the USDA’s Animal and Plant Health Inspection Service (APHIS), Dr. Elizabeth Goldentyer, and its animal welfare operations director, Dr. Robert Gibbens, were ordered to appear before a grand jury in the Western District of Virginia as part of a criminal investigation by the Department of Justice (DOJ) into Envigo, the sources said.

Envigo, a major U.S. animal research breeder, shuttered its Cumberland, Virginia facility last year after the Justice Department searched it and seized more than 4,000 beagles in May 2022. The company later settled civil charges alleging it had shown a “disregard” for the dogs’ welfare, and agreed to forfeit the beagles.

The Justice Department’s decision to subpoena government witnesses who would normally testify voluntarily to help build the government’s criminal case was highly unusual, according to a half-dozen legal and animal welfare experts.

The decision to exclude APHIS – the federal regulatory agency responsible for conducting compliance inspections at animal facilities across America – from the May 2022 search of the Envigo facility was also extraordinary, the experts said.

“That is not only unheard of, that is orders of magnitude out of normal,” said V. Wensley Koch, a retired 30-year veteran of APHIS.

Prosecutors asked Goldentyer and Gibbens, who appeared in November and August, respectively, about their management of the Envigo inspections and why they did not take any action against the company, despite the extensive documented evidence of violations, several of the sources said.  

Reuters was not able to determine how they responded to the questions.

Spokespeople for the USDA and APHIS declined to comment, citing the ongoing investigation.

Goldentyer and Gibbens declined to comment through an APHIS spokesperson, but in a previously unreported October letter to U.S. senators Mark Warner and Tim Kaine of Virginia, the agency said it had “worked diligently to improve animal welfare at Envigo.”

Spokespeople for the Justice Department and the U.S. Attorney’s office for the Western District of Virginia declined to comment, as did the USDA inspector general’s office.

To piece together a picture of how APHIS operates, Reuters relied on more than 800 pages of internal documents obtained through a public records request by the animal rights group, People for the Ethical Treatment of Animals (PETA), public government watchdog reports, inspection records, and interviews with animal welfare experts.

The documents, which have not been previously published, show a sharp divide between top officials and inspectors over how to handle the litany of problems that successive inspections found at the Envigo facility over a period of months.

The inspectors wanted APHIS to take a tougher stance against the company for the mistreatment of the beagles.

It is too early to determine where the subpoenas will lead since the grand jury’s primary goal is to determine whether to bring criminal charges against Envigo or its executives for animal welfare violations, obstruction of the USDA, making false statements and defrauding the United States, according to a court filing.

The subpoenas and the nature of the questions show that prosecutors are also investigating possible wrongdoing by APHIS leaders, including Goldentyer and Gibbens, several of the sources said.

The APHIS inspectors who documented dozens of violations at Envigo in 2021 and 2022 were also compelled last year to appear before the grand jury, where they were asked about possible flaws with the inspection process and were ordered to provide all records related to Envigo, according to sources who spoke anonymously because the matter is not public.

The actions by those inspectors are not under scrutiny, one of the sources added.

INTERNAL STRIFE

Between July 2021 and March 2022, inspectors documented more than 60 violations during four visits to Envigo’s Cumberland facility, public records show. More than half were deemed “direct” or “critical” violations. Direct violations indicate an animal is facing immediate harm.

Problems included dangerous flooring, failing to provide veterinary care, unsanitary conditions, euthanizing dogs without anesthesia, under-feeding mothers nursing puppies and failing to document the cause of death for hundreds of puppies.

APHIS policy states that inspectors who find a “direct” violation must return for a follow-up inspection within 14 days.

Yet, this did not happen with any of the agency’s inspections of Envigo, public records show.

APHIS leaders and inspectors sometimes disagreed about what details should be included in their reports and how resources should be deployed, emails show.

Lead inspector Rachel Perez-Baum asked APHIS leaders in September 2021 to increase staffing and send four or five inspectors for a planned October inspection due to problems such as “uncooperative facility management” and “poorly managed and incomplete records.” 

But Gibbens and other APHIS leaders declined, saying in an email that due to “optics” and the risks of COVID-19, the team needed “to be limited to three.”

Her supervisor, Dana Miller, agreed with Perez-Baum, and made a final plea to send inspectors in pairs, after Envigo’s staff “attempted to recant” their statements by claiming inspectors misunderstood them.

The three inspectors found more “direct” violations in the October inspection, public records show.

    Perez-Baum and Miller declined to comment.

Daphna Nachminovitch, a senior vice president at PETA, warned APHIS that month about problems at Envigo following an undercover investigation by the animal rights group. She now says she believes the agency failed to do its job.

APHIS “must be held accountable for its failure to enforce the law,” she said.

A spokesperson for biopharmaceutical company Inotiv, which acquired Envigo in November 2021, said the company is “fully cooperating” with the Justice Department and no longer sells or breeds dogs.

Envigo “places the highest priority on the welfare of the animals in our care and looks forward to an appropriate resolution of DOJ’s ongoing investigation,” the spokesperson said, declining to discuss the probe or prior USDA inspections.

TENSIONS RISE

Tensions between Gibbens and Miller escalated shortly after Envigo appealed some of the findings from the October inspection, emails show.

Miller expressed concerns after learning that Gibbens and other appeal review team members planned to side with Envigo by striking two of four contested citations from the final report.

One removed citation faulted Envigo for interfering with the inspection by providing “false information” and ordered the company not to “interfere with, threaten, abuse … or harass any APHIS official.”

Gibbens told Envigo APHIS would strike the citation because the company ultimately provided the requested information.

Less than a year later, however, federal investigators told a judge they had probable cause to believe the company made false statements and obstructed the USDA in their search warrant application.

Reuters could not determine why APHIS never took action against Envigo, nor referred it to the Justice Department. APHIS has authority to confiscate animals, revoke or suspend licenses, and pursue fines through negotiated settlements or administrative proceedings.

Internal records show APHIS initiated a probe into Envigo in 2021. In early 2022, APHIS leaders discussed entering a civil settlement with Envigo, emails show, but no action was ever taken.

TEAM LEADER REMOVED

Tensions peaked between APHIS leaders and inspectors after a 107-page report from a third inspection in November 2021 was rescinded by APHIS managers, who ordered the inspection team to edit it down to 22 pages.

The move caused consternation among some inspectors and led several employees to file complaints to the USDA’s inspector general, sources familiar with the matter said.

One of the complaints, seen by Reuters, alleged the report was cut after lawyers for Envigo contacted Deputy Administrator Goldentyer. Reuters was unable to determine why the report was trimmed.

While the final public report contains the same citations as the 107-page draft, it is missing many of the details to back them up, a comparison of the two documents show.

Among the cuts: graphic details about faulty euthanasia practices and detailed accounts of dog-fighting behavior deemed “extremely abnormal for the breed.”

As inspectors prepared for another inspection last March, Miller emailed staff to tell them Goldentyer was removing her from supervising Envigo inspections. Miller said she was disappointed but offered no explanation.

“O.M.G,” inspector Kelly Maxwell responded in an email, adding that removing Miller was “pretty extreme.”

Maxwell declined to comment.

The March 2022 inspection uncovered five violations, two of which were “direct.”

APHIS did not follow up until May 3, when inspectors cited Envigo for one violation: Failing to fix the dangerous flooring.

Two weeks later, federal agents executed the search warrant where they found 446 dogs in “acute distress” and in need of immediate veterinary treatment.

(Reporting by Sarah N. Lynch and Rachael Levy in Washington, editing by Ross Colvin)

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WASHINGTON (Reuters) – The U.S. Chamber of Commerce on Thursday called for regulation of artificial intelligence technology to ensure it does not hurt growth or become a national security risk, a departure from the business lobbying group’s typical anti-regulatory stance.

While there is little in terms of proposed legislation for AI, the fast-growing artificial intelligence program ChatGPT that has drawn praise for its ability to write answers quickly to a wide range of queries has raised U.S. lawmakers’ concerns about its impact on national security and education.

The Chamber report argues policymakers and business leaders must quickly ramp up their efforts to establish a “risk-based regulatory framework” that will ensure AI is deployed responsibly.

It added that AI is projected to add $13 trillion to global economic growth by 2030 and that it has made important contributions such as easing hospital nursing shortages and mapping wildfires to speed emergency management officials’ response. The report emphasized the need to be ready for the technology’s looming ubiquity and potential dangers.

The report asserts that within 20 years, “virtually every” business and government agency will use AI.

A product of a commission on artificial intelligence that the Chamber established last year, the report is in part a recognition of the critical role the business community will play in the deployment and management of AI, the Chamber said.

Even as it calls for more regulation, the Chamber is careful to caveat that there may be broad exceptions to how regulation is applied.

“Rather than trying to develop a one size-fits-all regulatory framework, this approach to AI regulation allows for the development of flexible, industry-specific guidance and best practices,” the report says.

(Reporting by Suzanne Smalley; Editing by Aurora Ellis)

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WASHINGTON (Reuters) -The U.S. Federal Trade Commission on Thursday said it would take action aimed at stopping New York Stock Exchange parent Intercontinental Exchange from acquiring mortgage data vendor Black Knight in a $13.1 billion deal.

The agency said the proposed deal would mean higher fees, less innovation and fewer choices in the process of financing the purchase of a home.

“This deal would reduce competition in key areas of the mortgage process, ultimately raising costs for lenders and homebuyers,” said Patty Brink, acting deputy director of the FTC’s Bureau of Competition.

The FTC voted 4-0 to bring an administrative complaint.

ICE said in a statement that it would “vigorously oppose” the FTC action.

“The proposed acquisition can bring to life a true end-to-end solution for the mortgage industry, benefiting aspiring and current homeowners across the United States,” said Tim Bowler, president of ICE Mortgage Technology.

Under President Joe Biden, who has promised tougher antitrust enforcement, the FTC has sued to stop an unusually large number of deals, and many companies terminated their transactions without a fight. One exception was Facebook parent Meta, which battled the FTC over its plan to buy virtual reality company Within Unlimited. The court ruled for Meta and the FTC dropped its opposition.

The ICE deal for Black Knight, which was announced in May, prompted worries from the beginning that it could raise costs for consumers by giving ICE too much pricing power in the mortgage data market that lenders rely on.

Black Knight, which provides software, data and analytics to the real estate and housing finance markets, is the latest in a string of deals undertaken by ICE since 2016 to support its mortgage-servicing business as it bets on a windfall from automation of the home financing process.

In 2020 ICE, in an $11-billion deal, purchased Ellie Mae, a cloud-based platform that supports all aspects of mortgage origination. That followed a $335-million deal for Simplifile in 2019, and the acquisition of MERS, in which ICE took a majority stake in 2016 and bought outright in 2018.

In February, Reuters reported that Black Knight had decided to put its Empower loan origination software business up for sale in a response to U.S. antitrust concerns.

The FTC said in a statement that the proposed asset sale was inadequate to address the harm that the transaction would do.

The Community Home Lenders Association, which opposed the deal, has argued that Empower and ICE’s Encompass unit are the top two vendors for loan origination software, jointly controlling upwards of 60% of the market.

(Reporting by Diane Bartz; Editing by Mark Porter and Leslie Adler)

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WASHINGTON (Reuters) – A U.S. citizen imprisoned by Iran on spying charges the United States rejects as baseless gave a rare interview from Tehran’s Evin prison on Thursday beseeching U.S. President Joe Biden to secure his release and that of two other American nationals.

“I implore you, sir, to put the lives and liberty of innocent Americans above all the politics involved and to just do what is necessary to end this nightmare and bring us home,” Siamak Namazi told CNN’s Christiane Amanpour in a telephone interview.

Namazi, 51, was speaking on behalf of himself, Emad Shargi, 58, a businessman and U.S. citizen, and environmentalist Morad Tahbaz, 67, who has both U.S. and British nationality.

Namazi made a similar plea in a letter to Biden on Jan. 16, seven years after Iran released five U.S. citizens in a prisoner exchange that coincided with the implementation of the 2015 Iran nuclear deal negotiated under U.S. President Barrack Obama.

“I remain deeply worried that the White House just doesn’t appreciate how dire our situation has become,” he said, saying he, Tahbaz and Shargi were all now held in the same place. Early in his detention, Namazi said he spent months caged in a cell, sleeping on the floor.

Namazi also called it “hurtful and upsetting” that Biden had not met his family “just to give them some words of assurance.”

A White House spokesperson said on condition of anonymity that “Iran’s unjust imprisonment and exploitation of U.S. citizens for use as political leverage is outrageous, inhumane, and contrary to international norms.

“Senior officials from both the White House and the State Department meet and consult regularly with the Namazi family, and we will continue to do so until this unacceptable detention ends,” the spokesperson added.

Iran’s mission to the United Nations did not immediately respond to a request for comment.

(Reporting By Arshad Mohammed; Additional reporting by Trevor Hunnicutt in Washington and Michelle Nichols in New York; Editing by Daniel Wallis)

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By Brendan O’Brien

(Reuters) – A Florida prosecutor on Thursday lashed out at Ron DeSantis for “political fear mongering” after the Republican governor criticized her office for failing to keep a teen accused of killing a 9-year-old girl in jail for previous crimes.

DeSantis’ office last month sent a letter to State Attorney Monique Worrell in Orlando demanding she hand over the criminal and judicial record of the suspect, Keith Moses. He allegedly killed the 9-year-old, a woman in her 20s and a television journalist a week earlier, while wounding the girl’s mother and another reporter.

Moses, 19, pleaded not guilty on Wednesday to three counts of first-degree murder and two counts of attempted first-degree murder. He remains in jail on those charges.

A letter from Worrell’s office made public on Thursday said claims that the state’s attorney in the past may have “failed to administer justice” in regard to Moses amounted to “political fear-mongering.”

The letter said Worrell had reviewed every case involving Moses and stood behind all decisions regarding his juvenile and adult dispositions.

“While it is convenient to assess blame on our office, the reality is that there is nothing in Mr. Moses’ history that would have predicted that he would commit a mass murder,” the office wrote. It said responsible gun laws would reduce the likelihood of future mass shootings.

The governor’s office did not immediately respond to a request for comment on the letter from Worrell’s office.

DeSantis, widely thought to be weighing a 2024 presidential campaign, traveled to New York, Chicago and Philadelphia in February to speak to law enforcement groups on criminal justice.

“We must determine if Mr. Moses was enabled by gaps in our sentencing laws that must be corrected, or, to be frank, your office’s failure to properly administer justice,” Ryan Newman, the governor’s general counsel, said in last week’s letter to Worrell.

Newman also wrote that Moses was a “known gang member” and was allowed to remain on the streets after being convicted as a juvenile of several crimes, including aggravated battery, assault and robbery with a firearm.

The letter noted that Moses was arrested in 2021 for possession of cannabis, but Worrell’s office decided against pursuing drug and gun charges against him. Moses was on felony juvenile probation at the time for previous crimes.

Worrell’s office said charges were not brought because prosecutors could not prove Moses and two others were in possession of 4.6 grams of marijuana and who was in possession of a gun found at the scene.

Worrell is not the first Florida prosecutor whom DeSantis has confronted. In August, DeSantis suspended a state’s attorney in Hillsborough County who had pledged that he would not bring criminal cases against people seeking or providing abortions despite legal restrictions that Florida has placed on the procedure.

(Reporting by Brendan O’Brien in Chicago; Editing by Matthew Lewis)

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By Felix Light

TBILISI (Reuters) -Georgia’s ruling party said on Thursday it was withdrawing a bill on “foreign agents” after two nights of violent protests against what opponents called a Russian-inspired authoritarian shift that imperilled hopes Georgia joining the European Union.

The Georgian Dream party said in a statement it would “unconditionally withdraw the bill we supported, without any reservations”. It cited the need to reduce “confrontation” in society, while denouncing “lies” about the bill spread by the “radical opposition”.

News reports late on Thursday said parliament scheduled an extraordinary session for Friday to deal with the bill. Large crowds remained outside the parliament building well after midnight and rallies were expected during Friday’s session.

Giga Lemonjava, a representative of the Droa party, said protesters wanted the government to formally denounce the bill and ensure the release all those detained in the demonstrations.

The Black Sea country of 3.7 million people has seen frequent political upheaval since winning independence from the Soviet Union in 1991, including a peaceful “Rose Revolution” in 2003 and a calamitous war against Russia five years later.

The bill would have required Georgian organisations receiving more than 20% of their funding from abroad to register as “foreign agents” or face fines.

Government officials said the proposals sought to root out “foreign influence” and “spies”.

‘RUSSIAN’ LAW, OPPONENTS SAY

Opponents described the bill as a local version of a law that Russian President Vladimir Putin has used to crush dissent for more than a decade.

“It was a Russian law that had to be recalled and should not have gone through parliament under any conditions”, said Nika Oboladze, 32.

“Because 90% of Georgians support European integration and nothing should stop that.”

The United States welcomed the decision to withdraw the draft law, but called on the ruling party to officially retract it and not further such legislation.

“We encourage Georgia’s political leaders to work together in earnest on the reforms urgently needed to obtain the EU candidate status that Georgia’s citizens overwhelmingly desire,” State Department spokesperson Ned Price told reporters.

Kremlin spokesman Dmitry Peskov said Moscow was “concerned” by events in Tbilisi, and said that the Georgian bill bore no relation to Russian laws.

“The Kremlin didn’t inspire anything there, the Kremlin has absolutely nothing to do with it,” Peskov said.

The Georgia ruling party has said the bill was modelled on the U.S. 1938 “Foreign Agents Registration Act”, which primarily covers lobbyists and organisations directly working for or under the control of foreign governments.

The European Union’s delegation to Georgia also welcomed the proposed withdrawal of the bill. “We encourage all political leaders in Georgia to resume pro-EU reforms, in an inclusive & constructive way,” it said on Twitter.

Parliament gave the draft law initial approval on Tuesday. Tens of thousands of protesters then gathered outside the parliament, some throwing petrol bombs, stones and plastic bottles at police. The authorities said dozens were detained.

Police used tear gas, water cannon and stun grenades to break up a second night of protests on Wednesday.

The interior ministry said all the protesters detained for non-criminal offences had been freed. It said some detainees appeared in court.

The bill has deepened a rift between Georgian Dream, which has a parliamentary majority, and President Salome Zourabichvili, a pro-European who has moved away from the party since being elected with its support in 2018.

Zourabichvili had said she would veto the bill, though parliament can override her.

“I want to congratulate the whole of society on this first victory of its kind. I welcome these correct steps taken by the government – the fact that they announced the withdrawal of this draft law,” Zourabichvili said on her Facebook page.

Georgia’s opposition has long accused Georgian Dream of being too close to Moscow. Anti-Russian feeling runs high in Georgia over Moscow’s backing for separatists in two breakaway regions, which led to the brief 2008 war.

All major parties, including Georgian Dream, support the idea of joining the EU and NATO. Last year, Brussels declined to grant Georgia EU candidate status alongside Moldova and Ukraine, citing stalled political and judicial reforms.

(Additional reporting by David Chkhikvishvili, Jake Cordell, Ben Tavener and Simon Lewis; writing by Felix Light and Mark Trevelyan; Editing by Angus MacSwan and Grant McCool)

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By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits increased by the most in five months last week, but the underlying trend remained consistent with a tight labor market.

Part of the larger-than-expected rise in claims reported by the Labor Department on Thursday reflected a surge in applications in New York state, which some economists attributed to a mid-winter school recess from Feb. 20-24. There was also a sharp rise in filings in California.

“Even after factoring in the latest increase, jobless claims are exceptionally low by historical standards, underscoring just how tight labor market conditions still are,” said Michael Pearce, lead U.S. economist at Oxford Economics in New York.

“It’s possible this is an early sign that the spike in announced layoffs is beginning to filter through to some job losses, but not all announced layoffs translate into job cuts.”

Initial claims for state unemployment benefits rose 21,000 to a seasonally adjusted 211,000 for the week ended March 4. That was the largest increase since October and lifted claims to a two-month high. Still, claims remained well below the 300,000 level, which is associated with a recession.

Economists polled by Reuters had forecast 195,000 claims for the latest week. The four-week moving average for new claims, a better measure of labor market trends as it irons out weekly fluctuations, climbed 4,000 to 197,000 last week.

Claims had stayed below 200,000 for seven straight weeks, indicating that high-profile job cuts in the technology sector had not had a material impact on the labor market.

Economists previously argued that seasonal adjustment factors, the model the government uses to strip out seasonal fluctuations from the data, could be holding down claims.

The seasonal adjustment factors for 2023 will be updated at the end of March. Goldman Sachs believed residual seasonality accounted for about half of last week’s rise in claims.

“Seasonal adjustment issues have exerted an increasing amount of downward pressure on initial claims over the last few months, and that pressure will begin to reverse in a few weeks, though annual revisions to the seasonal factors at the beginning of April could potentially eliminate the seasonal distortions,” Goldman Sachs said in note.

Unadjusted claims shot up 35,357 to 237,513 last week. They were boosted by a jump of 16,363 in filings in New York and a surge of 10,489 in California. There were also notable rises in applications in Kentucky, Oregon and Ohio. But claims in Rhode Island and Massachusetts fell significantly.

According to Lou Crandall, chief economist at Wrightson ICAP, the increase in the New York state claims was “a predictable response to the previous week’s mid-winter school break and will probably be reversed in next week’s report.” Crandall viewed the rise in California filings as “likely to be more persistent,” and expected overall claims to retreat to the 195,000-200,000 range when this week’s data is published next Thursday.

Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. U.S. Treasury prices were mixed.

Graphic: Jobless claims and planned layoffs https://www.reuters.com/graphics/USA-STOCKS/zdpxdxbqnpx/joblesschal.png

SKILLED WORKERS SCARCE

Data on Wednesday showed there were 1.9 job openings for every unemployed person in January. The Fed’s “Beige Book” report, also released on Wednesday, described the jobs market as remaining “solid” in February, and noted “scattered reports of layoffs” and that “finding workers with desired skills or experience remained challenging.”

With the labor market persistently tight, inflation readings strong and consumer spending robust in January, Fed Chair Jerome Powell told lawmakers this week that the U.S. central bank would likely need to raise interest rates more than expected.

Financial markets have priced in a 50-basis-point rate hike at the Fed’s March 21-22 policy meeting, according to CME Group’s FedWatch tool.

The Fed has increased its policy rate by 450 basis points since last March from the near-zero level to the current 4.50%-4.75% range.

The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 69,000 to 1.718 million during the week ending Feb. 25, the claims report also showed. The so-called continuing claims remain low, suggesting some laid-off workers could be easily finding new work.

The claims data has no bearing on February’s employment report, which is scheduled to be published on Friday, as it falls outside the survey period.

According to a Reuters survey of economists, nonfarm payrolls likely increased by 205,000 jobs in February after surging by 517,000 in January. The unemployment rate is forecast to be unchanged at more than a 53-1/2-year low of 3.4%.

The labor market is, however, cooling on the margins. A report from global outplacement firm Challenger, Gray & Christmas on Thursday showed job cuts announced by U.S.-based employers fell 24% to 77,770 in February. Planned layoffs were, however, 410% higher compared to the same period last year. It was also the highest February total since 2009.

Job cuts were concentrated in the technology industry, which accounted for 28% of layoffs announced last month. Retailers and finance firms are also reducing headcount.

“With 1.9 vacancies per job seeker, severed workers appear to be swiftly finding reemployment, which could make the unemployment dynamics quite different from historical experience in the event that layoffs continue to rise,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.

Graphic: Challenger layoffs: select sectors https://www.reuters.com/graphics/USA-STOCKS/byprlqwmnpe/challenger.png

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama, Andrea Ricci and Paul Simao)

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By Lucia Mutikani

WASHINGTON (Reuters) – U.S. job openings fell less than expected in January and data for the prior month was revised higher, pointing to persistently tight labor market conditions that likely will keep the Federal Reserve on track to raise interest rates for longer.

But the Labor Department’s monthly Job Openings and Labor Turnover Survey, or JOLTS report, on Wednesday also hinted at some cracks in the labor market. Layoffs rose to a two-year high in January and job cuts were higher than initially thought in 2022. Fewer people voluntarily quit their jobs.

Nevertheless, the labor market remains strong, with 1.9 job openings per every unemployed person, down from 2.0 in December. Fed Chair Jerome Powell on Wednesday reaffirmed his message of higher and potentially faster interest rate hikes.

“The decline in job openings does not indicate any meaningful improvement in the balance between labor demand and labor supply from the perspective of the Fed,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York. “If one wanted to clutch at straws, one could point to the second consecutive decline in the quits rate.”

Job openings, a measure of labor demand, decreased by 410,000 to 10.8 million on the last day of January. Data for December was revised higher to show 11.2 million job openings instead of the previously reported 11.0 million. Economists polled by Reuters had forecast 10.5 million job openings.

The report also showed job openings were higher than initially estimated in 2022, averaging 11.2 million, an increase of 1.2 million from 2021. The monthly decrease in openings was across all four regions, with big declines in the Midwest and the West, the epicenter of technology job cuts.

Labor market tightness was reinforced by the Fed’s Beige Book, which described conditions as remaining “solid” in February and also noted “scattered reports of layoffs” and that “finding workers with desired skills or experience remained challenging.”

Construction, the biggest casualty of the Fed’s aggressive monetary policy tightening campaign, saw job openings plunging by a record 240,000. There were 204,000 fewer vacancies in accommodation and food services, while job openings fell by 100,000 in the finance and insurance industry.

Employment in the leisure and hospitality industry, which encompasses accommodation and foods services, remains below its pre-pandemic level. This sector has been the biggest driver of job growth. Vacancies also decreased in durable goods manufacturing, retail trade and state and local government.

But job openings increased in transportation, warehousing and utilities as well as nondurable goods manufacturing.

The job openings rate fell to a still-high 6.5% from 6.8% in December. It averaged 6.8% in 2022, up from 6.4% in 2021.

Hiring rose 121,000 to 6.4 million, lifting the hires rate to 4.1% from December’s 4.0%. There were 77.2 million hires in 2022, a gain of 1.2 million from 2021. The hires rate averaged 4.2% in 2022, down from 4.3% in 2021.

Layoffs jumped 241,000 to 1.7 million, the highest level since December 2020, concentrated in the professional and business services industries. Layoffs, however, decreased in federal government. They increased sharply in the South, which has been experiencing an employment boom.

Layoffs rose 461,000 in 2022 to 17.6 million. The layoff rate rose to a still-low 1.1% from 1.0% in December. While the rate remains below its pre-pandemic high of 1.3%, the level of layoffs is now closer to the average of 1.9 million before the onset of the COVID-19 public health crisis.

“That suggests that the period of unprecedented job security for American workers is coming to a close,” said Julia Pollak, chief economist at ZipRecruiter.

About 3.9 million people quit their jobs. That was the fewest since May 2021 and was down 207,000 from December. The decline was mostly in professional and business services, educational services and the federal government. A record 50.6 million people quit in 2022.

FEWER WORKERS QUITTING

Stocks on Wall Street were mixed. The dollar was steady against a basket of currencies. U.S. Treasury prices were mixed.

The quits rates, which is viewed as a measure of labor market confidence, fell to 2.5% from 2.6% in December, still above its pre-pandemic standards around 2.3%.

“The recent evolution of this measure, despite showing a decline this month, suggests that underlying wage pressure should remain elevated, even though pressures are easing somewhat,” said Marc Giannoni, chief U.S. economist at Barclays in New York. “We continue to forecast that the pace of increase in payroll employment will show a resilient labor market.”

Labor market strength was reinforced by the ADP National Employment report, which showed private employment increased by 242,000 jobs in February after rising 119,000 in January.

According to a Reuters survey of economists, the Labor Department’s closely watched employment report on Friday is likely to show nonfarm payrolls increasing by 205,000 jobs in February after surging 517,000 in January. The unemployment rate is forecast unchanged at a more than 53-1/2-year low of 3.4%.

Data from Indeed showed job postings on the platform fell throughout February, which it said suggested there were 10.3 million openings at the end of last month.

“That would be another drop of about 500,000 openings,” said Nick Bunker, head of economic research at Indeed Hiring Lab. “Yet openings would still be 47% higher than they were before the pandemic. The labor market is cooling, but it’s still warm.”

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)

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By Ross Kerber

(Reuters) -Top payment networks including American Express Co, Mastercard Inc and Visa Inc said on Thursday they have paused work on implementing a new sales code for gun merchants, citing Republican pushback in various U.S. states on concerns about improper tracking of consumer behavior.

The Geneva-based International Organization for Standardization (ISO) approved the new merchant category code (MCC) in September to help detect suspicious firearms and ammunition sales to combat gun violence. Bills in several Republican-led states would bar or limit the use of the voluntary code.

A Mastercard representative said on Thursday via email that such bills would cause “inconsistency” in how the code could be applied by merchants, banks and payment networks.

“It’s for that reason that we have decided to pause work on the implementation of the firearms-specific MCC,” said the Mastercard representative, Seth Eisen.

American Express and Visa representatives also cited state bills as driving their decisions.

“There is now significant confusion and legal uncertainty in the payments ecosystem, and the state actions disrupt the intent of global standards. Accordingly, Visa is pausing implementation of the MCC,” Visa said in a statement sent by a spokesperson.

Discover Financial Services said in an emailed statement it was removing the new code from its next network update planned for April “to continue alignment and interoperability with the industry.”

The actions mark a setback for gun-control activists, though the payment networks stopped short of saying they would reject the code outright. The new code adds gun and ammunition shops to a list of hundreds of other types of retailers used to set fees, among other things.

One hope among code supporters is that it could help banks flag cases such as when someone buys a single gun from different stores in order to avoid required forms for multiple purchases.

Gun control activists said the payment card companies were caving in to political pressure, and that critics have misrepresented the surveillance risks of the new code, which cannot track individual items purchased.

“It’s just shameful these companies would buckle to political intimidation,” said Adam Skaggs, chief counsel of the Giffords Law Center, the legal arm of the gun safety organization led by former U.S. Rep. Gabby Giffords, in a telephone interview.

Igor Volsky, executive director of Guns Down America, a group calling for fewer guns and making them harder to get, said it would hold payment companies accountable “for any delays in implementing this common-sense tool” such as by communicating with their shareholders.

Montana Attorney General Austin Knudsen, one of several Republicans who welcomed the news, said in a statement on Thursday that the major credit companies “came to the correct conclusion.”

“However, they shouldn’t just ‘pause’ their implementation of this plan – they should end it definitively,” he added.

While all the top payment networks had said they would adopt the new code only the smallest, Discover, had given a public timetable for doing so, in April, and said it was only following the lead of others.

Bloomberg News earlier reported the implementation pauses by Visa and Mastercard, citing people familiar with the matter. Mastercard’s Eisen noted the code would not allow banks to track specific items purchased by consumers.

“We are committed to working with policymakers and elected officials to contribute to constructive solutions that address the gun violence issue, while respecting important constitutional rights and protections for lawful activities,” he said.

(Reporting by Ross Kerber; Editing by Rosalba O’Brien and Richard Chang)

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WASHINGTON (Reuters) – China’s government could use TikTok to control data on millions of American users, FBI Director Christopher Wray told a U.S. Senate hearing on Wednesday, saying the Chinese-owned video app “screams” of security concerns.

Wray told a Senate Intelligence Committee hearing on worldwide threats to U.S. security that the Chinese government could also use TikTok to control software on millions of devices and drive narratives to divide Americans over Taiwan or other issues.

“Yes, and I would make the point on that last one, in particular, that we’re not sure that we would see many of the outward signs of it happening if it was happening,” Wray said of concerns China could feed misinformation to users.

“This is a tool that is ultimately within the control of the Chinese government – and it, to me, it screams out with national security concerns,” Wray said.

The White House backed legislation introduced on Tuesday by a dozen senators to give President Joe Biden’s administration new powers to ban TikTok and other foreign-based technologies if they pose national security threats. The endorsement boosted efforts by a number of lawmakers to ban the popular app, which is owned by Chinese company ByteDance and used by more than 100 million Americans.

Other top U.S. intelligence officials including Director of National Intelligence Avril Haines, CIA Director William Burns and National Security Agency Director Paul Nakasone agreed at the hearing that TikTok posed a threat to U.S. national security. 

Nakasone on Tuesday expressed concern during Senate testimony about TikTok’s data collection and potential to facilitate broad influence operations.

(Reporting by Michael Martina and Patricia Zengerle; Editing by Will Dunham)

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KABUL (Reuters) – Afghan broadcaster Tolo News on Wednesday aired an all-female panel in its studio with an audience of women to mark International Women’s Day, a rare broadcast since the Taliban took over and many female journalists left the profession or started working off-air.

A survey by Reporters Without Borders last year found that more than 75% of female journalists had lost their jobs since the Taliban took over as foreign forces withdrew in August 2021.

With surgical masks covering their faces, the panel of three women and one female moderator on Wednesday evening discussed the topic of the position of women in Islam.

“A woman has rights from an Islamic point of view … it is her right to be able to work, to be educated,” said journalist Asma Khogyani during the panel.

The Taliban last year restricted most girls from high school, women from university and stopped most Afghan female NGO workers.

Another panellist, former university professor Zakira Nabil said women would continue to find ways to learn and work.

“Whether you want it or not, women exist in this society … if it’s not possible to get an education at school, she will learn knowledge at home,” she told the panel.

Due to growing restrictions as well as the country’s severe economic crisis, the International Labour Organisation said female employment had fallen 25% last year since mid-2021. It added that more women were turning to self-employed work such as tailoring at home.

The United Nation’s Mission to Afghanistan (UNAMA) on Wednesday called on the Taliban to reverse restrictions on the rights of girls and women, calling them “distressing.”

The Taliban have said they respect women’s rights in accordance with their interpretation of Islamic law and Afghan culture and that authorities have set up a committee to examine perceived issues in order to work towards re-opening girls’ schools.

(Reporting by Kabul Newsroom; Editing by Alexandra Hudson)

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By Stephen Culp

NEW YORK (Reuters) – Wall Street slid sharply on Thursday, pulled lower by bank stocks and jitters ahead of Friday’s employment report, while Treasury yields dropped on signs that the Federal Reserve’s restrictive policy is beginning to work as intended.

All three major U.S. stock indexes slid between 1.7% and 2.1% after lender SVB Financial Group announced a $1.75 billion share sale to shore up its balance sheet. This sparked a broad sell-off as investors prepared for the Labor Department’s hotly anticipated February jobs data, expected before the bell on Friday.

“Investors are positioning cautiously ahead of tomorrow’s payrolls report,” said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis, calling it a “challenging situation.” “A strong jobs report could be perceived by investors that the economy is still strong and the Fed needs to be more aggressive.”

The dollar backed off a near three-month high, gold advanced and benchmark U.S. Treasury yields eased as economic data took some of the sting out of Fed Chairman Jerome Powell’s hawkish, two-day congressional testimony.

Data released on Thursday showed U.S. jobless claims rose 11% last week – the largest increase in five months – while planned layoffs for February jumped four-fold, year-on-year.

Any signs of cracks in the tight labor market is good news as far as the Fed is concerned.

A clearer picture on whether the job market is softening is expected on Friday in the Labor Department’s February employment report. Analysts expect the U.S. economy to have added 205,000 jobs last month – a sharp deceleration from January – and see the unemployment rate holding firm at 3.4%.

At last glance, financial markets have priced in a 63% likelihood of a larger, 50 basis point increase to the Fed funds target rate this month, according to CME’s FedWatch tool.

The Dow Jones Industrial Average fell 543.54 points, or 1.66%, to 32,254.86, the S&P 500 lost 73.69 points, or 1.85%, at 3,918.32 and the Nasdaq Composite dropped 237.65 points, or 2.05%, to 11,338.36.

European stocks ended modestly lower, dragged down by higher-for-longer interest rate worries.

The pan-European STOXX 600 index lost 0.22% and MSCI’s gauge of stocks across the globe shed 1.23%.

Emerging market stocks lost 1.10%. MSCI’s broadest index of Asia-Pacific shares outside Japan, closed 0.91% lower, while Japan’s Nikkei rose 0.63%.

Treasury yields eased in the wake of the jobless claims data.

Benchmark 10-year notes last rose 15/32 in price to yield 3.9169%, from 3.976% late on Wednesday.

The 30-year bond last rose 3/32 to yield 3.8712%, from 3.877% late on Wednesday.

The greenback, which rose to a near three-month high during Powell’s testimony, pulled back against a basket of currencies after the jobless claims data.

The dollar index fell 0.38%, with the euro up 0.32% to $1.0578.

The Japanese yen strengthened 0.89% versus the greenback at 136.14 per dollar, while sterling was last trading at $1.1921, up 0.67% on the day.

Oil prices erased earlier gains to head lower over looming worries of softening demand in the face of a possible recession.

U.S. crude fell 1.23% to settle at $75.72 per barrel, and Brent settled at $81.59 per barrel, down 1.29% on the day.

Gold jumped on hopes that the Fed would dial down its aggressive inflation battle.

Spot gold added 1.0% to $1,831.50 an ounce.

(Reporting by Stephen Culp; Additional reporting by Marc Jones in London; Editing by Alexander Smith, Richard Chang and Deepa Babington)

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By Johann M Cherian and Fergal Smith

(Reuters) -Canada’s benchmark stock index fell on Thursday to its lowest closing level in nearly two months, tracking declines on Wall Street as investors grew nervous ahead of the release of U.S. and Canadian employment reports on Friday.

The Toronto Stock Exchange’s S&P/TSX composite index ended down 259.81 points, or 1.3%, at 20,086.72, its lowest close since Jan. 11.

Wall Street’s major indexes also posted steep declines as investors worried that the U.S. jobs report for February could spur aggressive interest rate hikes by the Federal Reserve.

Markets have been on edge after Fed Chair Jerome Powell delivered a message this week of higher and potentially faster rate hikes.

The Bank of Canada needs more evidence to gauge if interest rates are high enough to tame inflation, in part because the economies of major trading partners are doing better than forecast, Senior Deputy Governor Carolyn Rogers said.

On Wednesday, the BoC left its policy rate on hold at 4.50%.

Financials, the most heavily weighted sector on the TSX, fell 1.8%, while both consumer discretionary and materials, which includes precious and base metals miners and fertilizer companies, ended 1.7% lower.

Linamar Corp slumped 13.7% after the auto parts manufacturer missed quarterly profit estimates.

Nuvei Corp was a bright spot. It rose 6.6% after Credit Suisse upgraded the stock to “outperform” from “neutral”.

(Reporting by Johann M Cherian in Bengaluru; Editing by Shilpi Majumdar and Lisa Shumaker)

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By Allison Lampert

(Reuters) -The union representing American Airlines pilots will take a strike authorization vote in April, underscoring a broader push by North American pilots to make gains on salary and working conditions as air traffic increases sharply.

The vote announced by the union on Thursday will conclude on April 30 and follows Delta Air Lines pilots ratifying a new contract earlier this month that includes $7 billion in cumulative increases in pay and benefits over four years.

The deal is widely seen to be a benchmark for contract negotiations at rival U.S. carriers.

“Management must understand that they need to demonstrate the same level of commitment to bargaining that other airline management teams have shown in recent months,” the Allied Pilots Association said in a bulletin to members.

In an emailed statement on Thursday, the Texas-based carrier said it looks “forward to reaching an agreement with APA quickly so that American’s pilots can benefit from meaningful enhancements to their pay and quality of life.”

Even if the union gets a mandate, it would be very hard for pilots to walk off the job because of a complex labor process in the United States that makes it difficult for airline workers to strike.

The union, which represents more than 14,500 pilots at American Airlines, said it is “cautiously optimistic of management’s commitments and presence at the table,” but called the next few weeks critical.

Earlier this week American’s chief executive said the carrier is prepared to match the pay rates and profit-sharing formula that rival Delta provided in its new contract.

Some airline executives are concerned that hefty pilot pay raises will inflate fixed costs and make it tougher to repair debt-laden balance sheets.

(Reporting By Allison Lampert in MontrealEditing by Grant McCool)

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BERLIN (Reuters) -Germany’s finance minister has delayed presenting his budget for next year, a state secretary in his ministry said on Thursday, as differences within the three-way ruling coalition show no sign of abating.

Christian Lindner, head of the pro-business Free Democrats (FDP), had been due to unveil his plans for Europe’s biggest economy on Wednesday. He was also due to outline financial planning through to 2027.

“The additional risks, for example due to rising interest rates and the current collective bargaining round (on wages), are increasing,” said State Secretary Florian Toncar.

“At the same time, the spending wishes of many ministries are still clearly too high or there is a lack of savings elsewhere to be able to set new priorities,” he added.

Germany’s DPA news agency and the Sueddeutsche Zeitung daily first reported the delay, saying that Lindner had told Social Democrat Chancellor Olaf Scholz that he would not be ready on Wednesday.

“We will have to talk in cabinet about financial realities again,” Lindner told DPA, giving no new date.

The three-way coalition, which also includes the environmentalist Greens, has been at odds over several issues. Last month, Lindner said he considered the budget demands made by his coalition partners to be excessive.

(Reporting by Holger Hansen, Madeline Chambers; Editing by Lisa Shumaker)

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By Steve Scherer and David Ljunggren

OTTAWA (Reuters) – The Bank of Canada needs more evidence to gauge if interest rates are high enough to tame inflation, in part because the economies of major trading partners are doing better than forecast, Senior Deputy Governor Carolyn Rogers said on Thursday.

On Wednesday, the bank left its key overnight interest rate on hold at 4.50%, becoming the first major central bank to suspend a tightening campaign as inflation eases. Inflation slowed to 5.9% in January, still far above the BoC’s 2% target.

The BoC has said it will hold rates as long as inflation drops as it forecast in January, hitting 3% at about mid-year. Data since then have painted a “mixed picture,” Rogers said.

“We’ll still need more evidence to fully assess whether monetary policy is restrictive enough to return inflation to 2%,” Rogers said in a speech in Winnipeg to the Manitoba Chambers of Commerce. “If evidence accumulates suggesting inflation may not decline in line with our forecast, we’re prepared to do more.”

Money markets are almost fully pricing in another rate hike by September.

Rogers later told reporters the bank still believed the economy was dealing with excess demand, adding it would take some time before balance was restored.

Part of the challenge is an “incredibly tight” labor market at a time when productivity is slipping.

“(This) is a recipe for pressure on wages, which is what we’re worried about, because that will make it difficult to get back to our 2% inflation target,” she said.

The January jobs report was much stronger than forecast, but gross domestic product stalled in the fourth quarter – coming in far weaker than the 1.3% annualized growth forecast by the BoC.

“It looks like the central bank’s pause is on shaky ground and it wouldn’t take all that much additional evidence to spur them back into action,” said Royce Mendes, head of macro strategy at Desjardins.

In her speech, Rogers noted economic growth and inflation outlooks for both the United States and Europe were higher than the BoC had expected in January.

“Since these are our main trading partners, this could point to some further inflationary pressure in Canada,” Rogers said.

Over the past year, the central bank raised rates eight times in a row by a total of 425 basis points to tame inflation, which peaked at an annualized rate of 8.1% last year.

The BoC expects near-zero growth for the first three quarters of 2023.

The Canadian dollar was trading nearly unchanged at 1.38 to the greenback, or 72.46 U.S. cents, holding near its weakest in nearly five months.

Money markets expect the BoC’s policy rate to peak at about 4.75% this year, or roughly 90 basis points below the expected end point of the U.S. Federal Reserve.

(Reporting by Steve Scherer and David Ljunggren; additional reporting by Fergal Smith in Toronto; Editing by Leslie Adler and Deepa Babington)

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By Richard Cowan and Susan Heavey

WASHINGTON (Reuters) -U.S. Senate Republican leader Mitch McConnell, one of the most powerful figures in Washington, is being treated for a concussion and will remain hospitalized for a few days after tripping and falling, his spokesperson said on Thursday.

McConnell, who is 81 and was first elected to represent Kentucky in the Senate in 1984, “tripped at a dinner event Wednesday evening and has been admitted to the hospital and is being treated for a concussion,” spokesperson David Popp said in a statement.

“He is expected to remain in the hospital for a few days of observation and treatment,” Popp added.

McConnell has been awake and talking to people, according to Republican Senator John Barrasso, a member of his leadership team.

“He’ll be fine. He’s going to be observed,” Barrasso said. “I expect he’s going to make a full recovery and be back here next week.”

McConnell’s legislative skills have torpedoed many Democratic initiatives over the years, both when his party held a majority in the chamber and when Democrats have held the edge, as they currently do.

He has long been criticized by Democrats, particularly for his tactics that allowed Republicans to build a 6-3 conservative majority on the U.S. Supreme Court, including having the Senate refuse to consider a 2016 nomination to the high court by Democratic then-President Barack Obama.

McConnell has also drawn the ire of Donald Trump, including for rejecting the Republican former president’s false claims that his 2020 election loss to Democrat Joe Biden was the result of widespread voting fraud.

He has maintained his support for Ukraine after Russia’s invasion last year even as some far-right Republicans have questioned U.S. aid for the Ukrainians.

With Republicans now holding a narrow 222-213 majority in the House of Representatives, McConnell has so far stayed out of the limelight in the debate over raising the U.S. debt ceiling, leaving talks to Biden and House Speaker Kevin McCarthy.

McConnell has faced other health issues in recent years, including a broken shoulder in 2019 after falling in his Kentucky home.

Falls are the leading cause of deaths by injury among U.S. adults 65 and older and caused more than 36,000 deaths in 2020, according to the U.S. Centers for Disease Control and Prevention.

SEVENTH TERM

Currently serving his seventh six-year term, which runs through 2026, McConnell is the third U.S. senator to be hospitalized in recent weeks. Democrat John Fetterman is being treated for depression, while Democrat Dianne Feinstein was discharged to recuperate at home following a bout with shingles.

McConnell served as Senate majority leader from 2015 to 2021 and as Senate minority leader since then. Democrats, including three independents who vote with them, currently hold a 51-49 majority in the Senate.

A former judge-executive of Kentucky’s Jefferson County, McConnell has helped steer the federal judiciary sharply to the right, having the Senate speedily confirm Republican nominees including Trump’s three Supreme Court appointees.

Senate Republicans this year re-elected McConnell as their leader. Senator Rick Scott of Florida challenged McConnell for the right to lead the Republican caucus with the backing of other Trump allies including Senator Josh Hawley.

Some of McConnell’s colleagues in both parties wished him well.

Senate Majority Leader Chuck Schumer, a Democrat, said, “I join every single one of my colleagues in wishing Leader McConnell a speedy and full recovery now.”

While his efforts to sink liberal initiatives led him to dub himself the “Grim Reaper,” McConnell’s absence in the Senate could further inflame divisions within his party. McConnell has stood as a bulkhead against Trump’s “Make American Great Again” faction even as the former president has attacked him and his wife, Elaine Chao.

McConnell condemned the Jan. 6, 2021, attack on the U.S. Capitol by Trump supporters but ultimately voted to acquit the former president on a House-approved impeachment charge of incitement of insurrection even as he held him “practically and morally responsible.”

Trump has accused McConnell of being a “RINO,” or Republican in Name Only, calling him an “old crow” and lobbing repeated racist attacks against Chao, who served as U.S. transportation secretary under Trump but resigned after the Jan. 6 attack.

McConnell has declined to say whether he would back Trump’s 2024 re-election bid but has said he would support the ultimate Republican nominee.

(Reporting by Richard Cowan and Susan Heavey, additional reporting by David Morgan and Nancy Lapid; Editing by Scott Malone, Will Dunham, Andy Sullivan and Paul Simao)

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Katelynn Richardson on March 9, 2023

West Virginia is asking the Supreme Court to overturn an injunction against its Save Women’s Sports Act, which makes biological men ineligible to compete in women’s sports.

The Save Women’s Sports Act, or H.B. 3293, was challenged by the American Civil Liberties Union (ACLU) on behalf of an 11-year-old male student who identifies as female. A federal judge upheld the law in early January, but the ACLU appealed the decision to the 4th Circuit, which ruled 2-1 to grant an emergency injunction preventing the enforcement of the law while it considers the appeal.

Now, West Virginia and the Alliance Defending Freedom (ADF) are appealing the injunction to the Supreme Court.

ADF Legal Counsel Rachel Csutoros told the Daily Caller News Foundation they are “hopeful” the Supreme Court will uphold the law.

“Women and young girls deserve to compete on a level playing field, and we are hopeful the U.S. Supreme Court will uphold the commonsense West Virginia law, which simply protects equal opportunities for young women and girls in sports,” Csutoros told the DCNF.

In September 2021, ADF intervened in the case on behalf of Lainey Armistead, a West Virginia State University Soccer Player.

BREAKING🚨🚨 For the first time, a women’s sports case will reach the Supreme Court. ADF and @WestVirginiaAG are asking #SCOTUS to reverse an injunction that’s blocking WV’s women’s sports law.

It’s time to #LetGirlsBeHeard and #SaveWomensSports.

— Alliance Defending Freedom (@ADFLegal) March 9, 2023

West Virginia Attorney General Patrick Morrisey said that his state remains “confident in the merits of our defense.”

“We are resolute in protecting opportunities for women and girls in sports because when biological males win in a women’s event—as has happened time and again—female athletes lose their opportunity to shine,” he said in a statement. “That’s why we’re taking this case to the Supreme Court.”

ADF is currently handling multiple cases defending female athletes who have been forced to compete against men. Nationwide, the push to protect women’s sports is growing stronger, with the most recent polling revealing that 60% of American voters believe it’s harmful to allow biological men to compete in women’s sports.

The ACLU did not immediately respond to a request for comment.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].

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WASHINGTON (Reuters) – The CEO of Norfolk Southern Corp will appear before the Senate Commerce Committee on March 22 at a rail safety hearing, according to a spokesperson for the committee.

CEO Alan Shaw appeared before the Senate Environment and Public Works committee on Thursday. National Transportation Safety Board Chair Jennifer Homendy will also appear at the March 22 hearing, the committee said.

(Reporting by David Shepardson; Editing by Leslie Adler)

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By Andrew Chung

(Reuters) -West Virginia Attorney General Patrick Morrisey said on Thursday the state will ask the U.S. Supreme Court to allow enforcement of a law banning transgender athletes from female sports teams, one of numerous Republican-backed measures across the country targeting LGBT rights.

Morrisey, a Republican, told reporters that West Virginia will file a request asking the justices to lift an injunction blocking the law issued on Feb. 22 by the Richmond, Virginia-based 4th U.S. Circuit Court of Appeals while litigation continues over its legality. A legal challenge was brought by a 12-year-old transgender girl, Becky Pepper-Jackson.

The 2021 law, passed in 2021, bars male public high school or post-secondary students from female athletic teams “based solely on the individual’s reproductive biology and genetics at birth.”

In the lawsuit, Pepper-Jackson and her mother Heather argued that the law discriminates based on sex and transgender status in violation of the U.S. Constitution’s 14th Amendment guarantee of equal protection under the law as well as the Title IX civil rights law that bars sex-based discrimination in education.

The state’s request to the Supreme Court, due to be filed later on Thursday, is meant “to defend the integrity of women’s sports here in West Virginia,” Morrisey said.

“This is a matter of basic common sense and basic fairness. We believe we are absolutely correct on the merits,” Morrisey added.

Pepper-Jackson, who attends a middle school in the West Virginia city of Bridgeport, sued after being prohibited from trying out for the girls’ cross-country and track teams.

“We will vigorously defend Becky’s right to participate in team sports, and would urge state legislators countrywide to just let the kids play,” the American Civil Liberties Union and Lambda Legal, an LGBT legal group, said in a statement. The groups are representing Pepper-Jackson along with the Cooley law firm.

Republicans in various states have pursued a wave of laws directed at LGBT people – limiting transgender participation in sports, access to gender-affirming medical care, and the teaching of subjects related to gender identity or sexual orientation. Tennessee lawmakers passed legislation last month restricting drag performances in public or in front of children.

The West Virginia case requires the Supreme Court to confront the issue of transgender rights – a major front in the U.S. culture wars – in the wake of its 2020 ruling that protected gay and transgender employees under a longstanding federal law barring workplace discrimination.

U.S. District Judge Joseph Goodwin initially blocked the law, allowing Becky to participate on the teams. But in January he reversed course, finding that the state measure was lawful.

“I recognize that being transgender is natural and is not a choice. But one’s sex is also natural, and it dictates physical characteristics that are relevant to athletics,” wrote Goodwin, an appointee of Democratic former President Bill Clinton.

Goodwin criticized the measure as one that aimed to “politicize” sports participation by transgender students and was “creating a ‘solution’ in search of a problem.”

The 4th Circuit subsequently blocked law while the case proceeds.

A former West Virginia State University female college soccer player, Lainey Armistead, also intervened in the case to defend the state’s law. She is represented by the Alliance Defending Freedom, a conservative religious rights group.

The Supreme Court in 2021 left in place a lower court’s ruling that a Virginia school board had acted unlawfully in preventing Gavin Grimm, a transgender former high school student, from using the boys’ bathroom before he graduated in 2017.

The justices are considering another important case during their current term touching on LGBT rights, with a ruling due by the end of June. The court’s conservative majority, based on arguments in December, appeared ready to rule that a Christian web designer has a right to refuse to provide services for same-sex marriages.

(Reporting by Andrew Chung in New York; Editing by Will Dunham)

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By Daniel Wiessner

(Reuters) – A panel of conservative U.S. appeals court judges on Thursday appeared poised to revive a lawsuit challenging a Maryland school district’s policy of not disclosing students’ transgender identity to their parents.

The 4th U.S. Circuit Court of Appeals panel during a hearing in Richmond, Virginia, appeared to agree with a group of parents in Montgomery County, Maryland, whose lawsuit challenging the 2020 policy was brought before the panel after a judge dismissed it last year. The parents argued it allows school officials to usurp their roles in their children’s upbringing.

“This is a major life decision that should involve the parents,” Circuit Judge Paul Niemeyer said as the panel heard arguments in the case before it makes a decision.

The policy directs school personnel to help transgender students create a plan to transition, including using preferred pronouns, names and bathrooms, and bars staff from informing parents of those plans without a student’s consent.

The federal judge in Maryland who dismissed the case last August said the parents do not have a fundamental right to be promptly informed of their child’s gender identity.

The parents are represented by the National Legal Foundation, a Christian conservative group that has been involved in a series of other cases involving LGBTQ rights, abortion and prayer in schools.

Steven Fitschen, the group’s president, said in an email that he anticipates filing more lawsuits challenging school policies barring the disclosure of students’ gender identity.

At least 168 U.S. school districts with more than 3.2 million students have such policies, according to conservative group Parents Defending Education.

Thursday’s case is the first of its kind to reach a U.S. appeals court. Parents have filed lawsuits challenging similar policies adopted by school districts in Massachusetts, Wisconsin, Virginia and Iowa, among other states. Some of those have been dismissed and others are pending.

The 4th Circuit is not currently considering the merits of Montgomery County’s policy, but whether the parents can sue over it and have identified a constitutional right that was allegedly violated.

Niemeyer, an appointee of Republican former President George H.W. Bush, and Circuit Judge Marvin Quattlebaum both said the policy had injured parents, giving them grounds to sue, by inviting students to secretly transition.

Quattlebaum and Circuit Judge Allison Rushing, who rounded out the panel, are appointees of Republican former President Donald Trump.

The county board of education in adopting the policy said it was necessary “to embrace the vibrant diversity of our community and ensure that all students feel welcomed, safe, and respected.”

Alan Schoenfeld, a lawyer for the board, argued on Thursday that the policy was valid because it created a “student-led” process rather than allowing school officials to impose their will on students.

“There is no allegation that the school is making any decision or directing the process,” he said. “The child is deciding.”

(Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and Deepa Babington)

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By Niket Nishant, Medha Singh and Hannah Lang

(Reuters) – Shares of crypto-focused companies fell on Thursday after Silvergate Capital Corp disclosed plans to wind down operations and voluntarily liquidate, as the aftermath of FTX’s implosion last year reverberates through the industry.

Shares in Silvergate plunged more than 35% to $3.17, a day after hitting a record low and have lost 64% since March 1 when the company flagged a going concern risk.

Analysts said a complete closure of the crypto lender could take one or two years depending on how quickly outstanding loans are repaid and assets are disposed of.

Silvergate’s latest move adds to a list of high-profile collapses among crypto market players since last year.

“We believe this decision was made, at least in part, to help mitigate Silvergate Bank’s legal liability related to FTX’s bankruptcy,” Wedbush analysts wrote in a note.

Silvergate did not immediately respond to a request for comment on the analysts’ view.

GRAPHIC-Silvergate stock performance since FTX crisis (https://www.reuters.com/graphics/FINTECH-CRYPTO/SILVERGATE/egpbyoxkrvq/chart.png)

Meanwhile, shorting in the shares of Silvergate has proved profitable for bearish investors as its shares have lost 95% of their value in the past 12 months and 72% so far this year.

Nearly 85% of the company’s free float is under short position with short sellers making $241 million in year-to-date mark-to-market profit, according to analytics firm S3 Partners.

While Silvergate said its liquidation plan includes a full repayment of all deposits, many within the crypto industry were still left wondering how the bank’s demise would impact other firms.

“As the situation continues to unfold, we’ll have to closely monitor whether exchanges can smoothly transition from Silvergate and whether Silvergate truly is sufficiently capitalized,” said Eric Chen, the chief executive officer and co-founder of Injective Labs, a company focused on decentralized finance.

Shares of peer Signature Bank, which has been pivoting away from crypto since late last year, fell more than 11%. The S&P 500 bank index tumbled nearly 6% on Thursday.

In its second mid-quarter update this month, Signature said digital assets accounted for just 18.5% of its total deposit balance.

Crypto exchange Coinbase Global, which cut ties with Silvergate last week, dipped more than 7%. Miners Riot Blockchain fell more than 11% and Marathon Digital slid 10% .

Bitcoin was last trading at $20,754, near its lowest level since January, with analysts and investors saying the market impact of the news was limited as it was widely expected.

(Reporting by Medha Singh and Niket Nishant in Bengaluru and Hannah Lang in Washington; Editing by Sriraj Kalluvila, Arun Koyyur and Nick Zieminski)

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By Pete Schroeder

WASHINGTON (Reuters) – The top regulatory official for the U.S. Federal Reserve said cryptocurrency technology still could have “potential transformative” effects on the financial system, but needs “guardrails” to realize them.

Fed Vice Chair for Supervision Michael Barr said recent turmoil in crypto markets make clear the sector could still pose a risk to traditional banks, but that the impact has been limited as regulators urge caution.

U.S. bank regulators, including the Fed, have taken several steps in recent months to ensure banks are approaching the crypto sector with caution, including requiring banks to flag any crypto activities to regulators before proceeding, and warning firms that crypto deposits can be particularly volatile.

“These liquidity concerns are particularly acute for banks that have a meaningful portion of their balance sheets funded with such deposits,” said Barr in prepared remarks, which came one day after crypto-focused bank Silvergate Capital Corp (SI.N) announced plans to liquidate after facing dramatic losses.

Barr stopped short of saying banks have no role to play in crypto, but rather said regulators are busy figuring out what firms could do in the space while remaining safe and sound. He noted that technology behind crypto could make financial markets and payments systems more efficient and affordable.

“Our goal is to create guardrails, while making room for innovation that can benefit consumers and the financial system more broadly,” he said.

(Reporting by Pete Schroeder)

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