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US economy growing at 3.8%

The US economy grew by 3.8 per cent in the final quarter of last year, according to figures released yesterday. The final estimate of gross domestic product was down 0.1 of a percentage point on the earlier estimate, but still represented a sharp acceleration from the 2.1 per cent growth recorded in the third quarter. Separately, the Commerce Department reported that 811,000 new homes had been sold in February. This is the first time in over 10 years that sales have been above 800,000 for two consecutive months. Because of the strength in housing and other sectors of the economy, many analysts have revised their estimates of first-quarter growth upwards to between 3.5 and 4 per cent, well above the Federal Reserve target range of 2 to 2.5 per cent.

Suez and Lyonnaise in merger talks

The French holding company Cie de Suez and the utilities group Lyonnaise des Eaux confirmed they were holding merger talks. The news came after more than a week of speculation that the two companies were working out a merger plan. Analysts believe a tie-up would be good for cash-rich Suez and could provide Lyonnaise with the resources it needs to keep up with its expanding rival Generale des Eaux.

Tokyo down slightly after Wall Street drop

Thursday's 140-point drop Wall Street caused the Tokyo stock market to fall slightly in thin trading. Trading was confined to a narrow range because of the closure of markets in Hong Kong, Singapore and Europe. Turnover was 259 million shares, the first time it had fallen below 300 million since 7 January. On Thursday 493 million changed hands. In previous years, end-of-year window-dressing has inflated turnover to 500 million. The Nikkei Stock Average closed at 18,189.72, down 20.70 points, or 0.11 per cent, on the previous day.

French jobless figure falls

The number of people out of work in France showed a surprise fall in February, though economists said this was not enough to suggest that unemployment had peaked. Labour ministry figures released yesterday showed the seasonally adjusted number of people out of work fell by 7,500 to 3.09 million. Economists had expected a small rise.