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Productivity in the US non-farm-business sector grew at an annual rate of 9.5% in Q-3 Y 2009, the biggest quarterly gain in six years, the US Labor Department reported Thursday. The Q-3 reading for productivity, the amount of output per hour of work, was also better than the 6.4% gain that economists had estimated. Employers’ unit labor costs, or costs of wages and benefits for each unit of output, plunged at an annual rate of 5.2%. The US economy rose at a pace of 3.5% in Q-3 after four consecutive quarters of contraction, a strong signal that the worst recession since the Great Depression is over. Productivity is considered the Key ingredient needed for rising living standards because it allows companies to pay their workers more without having to raise the price of their products, which fuels inflation. Read more

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The ECB stays the course. “On the basis of its regular economic and monetary analysis, the Governing Council decided to leave the key ECB interest rates unchanged, ” Jean-Claude Trichet, president of the ECB, said at a news conference. “The current rates remain appropriate,” Trichet said. “The incoming information and analysis that have become available since our meeting in early October have confirmed our expectations.” The annual inflation rate was -0.1 percent in October, according to Eurostat’s latest estimate, and it was expected to rise above zero again in the coming months, Trichet said. Medium to longer-term inflation expectations remain firmly anchored in line with the Governing Council’s aim of keeping inflation rates below, but close to 2% over the medium term. At the same time, the latest information continues to signal an improvement in economic activity in the second half of this year, Trichet said. The Governing Council expects the Euro area economy in 2010 to recover at a gradual pace, recognizing that the outlook remains subject to high uncertainty. The Governing Council also left interest rates on the marginal lending facility and the deposit facility unchanged at 1.75% and 0.25% respectively. Read more

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Electronics maker Panasonic today launched a tender offer to acquire more than 50% in rival Sanyo, aiming to make the company a subsidiary in a deal worth 400 billion yen (US$4.44B). Panasonic decided to make an offer for Sanyo last year, aiming to gain access to the electronic maker’s Green battery technology. Sanyo develops solar-cell technology and batteries for hybrid cars. If the deal goes through, the new company will be Japan’s second-largest electronics maker, after Sony.

The offer is on the table until December 7, but with Goldman Sachs, Daiwa Securities and the Sumitomo-Mitsui group all signaling they will agree to sell their shares, Panasonic is likely to see the deal go through. Panasonic is willing to pay 131 yen per share, but Sanyo was trading at 216 yen per share on Wednesday. After news of the tender offer broke, the value of single Sanyo shares dropped to 192 yen. Read more

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The US Federal Reserve said Wednesday that the US economic activity has continued to “pick up,” and decided to keep a Key interest rate unchanged at a record low of between Zero to 0.25% to “prop up” the economy. Information received recently suggested that “economic activity has continued to pick up,” the US Fed said, noting that “economic activity is likely to remain weak for a time.” In recent weeks, conditions in financial markets were roughly unchanged, but activity in the housing sector has increased over recent months, said the US Central Bank in a statement following its 2 day policy-making meeting in Washington. Meanwhile, household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales, according to the Federal Reserve. Read more

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GenVec Inc. (Nasdaq: GNVC) today announced that the U.S. Food and Drug Administration (FDA) has granted orphan drug designation to TNFerade, GenVec’s newest and most promising anti-cancer drug for the treatment of pancreatic cancer.

The FDA grants orphan drug designation to drugs that could possibly provide a significant therapeutic advantage over existing treatments, and specifically target conditions affecting 200,000 or fewer U.S. patients per year. Orphan drug designation allows the development company potential financial and regulatory incentives including various favorable grants and credits such as, study design assistance, waiver of FDA user fees, tax credits, and up to seven years of market exclusivity, contingent upon marketing approval. Read more

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Savvy investor Warren Buffett placed his biggest bet in history on Burlington Northern Santa Fe Corp, the 2nd largest US Railroad company on Tuesday. Mr. Buffett’s Berkshire Hathaway Inc. will pay US$100/shr in cash for the 78% of BNSF that it does not already own for a total of US$34B. The price is 31.5% premium on BNSF’s closing price Monday. Including BNSF’s US$10B debt that Berkshire has agreed to take, the value of the deal will top US$44B, the biggest acquisition ever for Berkshire. “It’s an all-in wager on the economic future of the United States. I love these bets,” Buffett said. The deal has already been approved by boards of both companies, and will be completed in Q-1 Y 2010. Read more

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