Services in U.S. Grow at Slowest Pace in Three Years

Oct. 4 (Bloomberg) -- Service industries in the U.S. expanded at the slowest pace in more than three years in September as the housing slump deepened.

The Institute for Supply Management's index of non- manufacturing businesses fell to 52.9, the lowest since April 2003, from 57 in August. Readings above 50 indicate expansion in industries including construction, banking and retailing that account for almost 90 percent of gross domestic product.

The report suggests the economy is losing momentum as the fourth quarter begins. A weakening housing market that has left Americans feeling less wealthy is limiting consumer spending at retailers such as Wal-Mart Stores Inc. and dragging on growth, making it likely the Federal Reserve will keep interest rates unchanged.

``The economy is slowing, but not at a great pace,'' Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania, said before the report. ``The slowdown in housing has implications not just for construction, but also for finance, real estate -- lots of ancillary places.''

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