NEW YORK, Oct 3 (Reuters) - The pace of growth in the vast U.S. services sector picked up in September as new orders accelerated, though employment cooled, an industry report showed on Wednesday.
STORY: TABLE: COMMENTS:
PAUL EDELSTEIN, ECONOMIST, IHS GLOBAL INSIGHT, LEXINGTON, MASSACHUSETTS
"We knew the non-manufacturing industries were expanding, but they were not growing at a satisfactory pace. It looks like new orders were up and at their highest levels since March when things were looking better. But exports orders fell again given what's happening in Europe and China and employment also slowed from August. In total, these services industries will continue growing and propel the overall economy. If things don't deteriorate further in Europe and China, we should avoid a recession but the economy will not expand fast enough to create more job growth."
STEVEN WOOD, CHIEF ECONOMIST, INSIGHT ECONOMICS, DANVILLE, CALIFORNIA
"Business activity in the services, construction, and government sectors of the economy accelerated in September but these sectors are growing at only a moderate pace. Growth in Q3 was slightly better than it was in Q2. Continued growth in new orders and export orders provide some optimism for the economic outlook but weak order backlogs and inventories point towards continued moderate growth."
THOMAS DI GALOMA, MANAGING DIRECTOR, NAVIGATE ADVISORS, STAMFORD, CONNECTICUT
"Non-manufacturing ISM is higher three months in a row and seems to counter most of the recent weak economic data. It's having little to no impact on Treasury prices at this point."
WILLIAM LARKIN, FIXED INCOME PORTFOLIO MANAGER, CABOT MONEY MANAGEMENT, SALEM, MASSACHUSETTS
"It indicates a little bit of growth. This is good information ahead of the monthly employment report. It looks more like things are heading in the right direction. It is this new reality -- we don't have robust growth, we just have very moderate growth."
STEPHEN STANLEY, CHIEF ECONOMIST, PIERPONT SECURITIES, STAMFORD, CONNECTICUT
"It's in line with the factory report on Monday. We have seen a few reports now that seem to show things might have picked up in September, although it's not a strong improvement. Perhaps people are feeling better even though businesses are not. We have not broken out of the 1 to 2 percent growth range for this year."
MARKET REACTION: STOCKS: U.S. stocks slipped . BONDS: U.S. Treasury debt prices weakened . FOREX: The dollar hit a two-week high versus the yen .
(Americas Economics and Markets Desk; +1-646 223-6300)
Keywords: USA ECONOMY/ISM