Wednesday Chatter

Good news for the bond market, but bad news for the economy as the Institute for Supply Management Services Index dropped to 52.9 in September from 57 in August. This reflects the service industries in the U.S. are losing momentum as the fourth quarter begins. Remember, services account for approximately 2/3 of U.S. GDP. In addition to this, ADP reported its monthly data shows only 78,000 jobs were added in September, which is lower than the 125,000 median forecast by most economists that were surveyed for Friday?s report. As you know, Friday, the Labor Department will release the official government statistics on job growth. This weak data has interest rates dropping, with the yield on the 10 year note down to 4.57%. Later today we will get to hear Fed Chairman Bernanke discuss the economy, so stay tuned.