* Short-dated debt rises on data pointing to weak growth

* Long-maturity issues slump on curve-steepening trades

* U.S. payrolls falls for sixth straight month

* ISM data show surprise services shrinkage, record prices

* ECB as expected lifts benchmark rates by a quarter point (Updates market action)

By Richard Leong

NEW YORK, July 3 (Reuters) - Short-dated U.S. government debt prices edged up on Thursday, as weak data reinforced a grim view of the economy and pared expectations that the Federal Reserve will raise interest rates any time soon.

Traders also anticipated, however, that a steady Fed monetary policy will be inflationary down the road, as oil and food prices continue advancing into record territory. They dumped long-dated Treasuries in favor of shorter maturities which are less sensitive to inflation.

"It smells like stagflation. That's why you have the yield curve steepening," said Tom Sowanick, chief investment officer at Clearbrook Financial LLC in Princeton, New Jersey.