FACTBOX: Economic data to watch to gauge recession risks

WASHINGTON (Reuters) - U.S. job growth is weakening, manufacturing activity is slowing and businesses and consumers have tightened up on spending as the economy teeters on the edge of recession.

During the third quarter the economy expanded at a 4.9 percent annual rate, according to the Commerce Department's gross domestic product report, which measures total output of goods and services within U.S. borders. But the outlook for the final three months of 2007 and most of 2008 are not expected to be as bright.

A recession is commonly defined as two consecutive quarters of back-to-back negative readings on GDP. The Commerce Department's initial take on the fourth quarter, which many are now forecasting to show a contraction, will be available at the end of this month.

Below are some key economic reports, many of which are used to compile the GDP data, that economists are watching to gauge if the economy is slipping into recession.

- LABOR DEPARTMENT'S EMPLOYMENT SITUATION REPORT

In December, the economy added just 18,000 jobs, bringing the employment rate up 0.3 percentage point to 5.0 percent, the highest in two years.

Employment is a lagging indicator and the last key piece toward mapping out a recession. Economists generally view this report as recessionary when the unemployment rate rises by 0.5 percent or more from the low point of a business cycle or by 0.3 percent on a three-month rolling basis.

Firms will cut back on hours and hold off on business investments before cutting their workforce, particularly in such a tight labor market, but prospects of an economic downturn will indeed drive businesses to stop hiring and even consider trimming their workforce.

- CONFERENCE BOARD'S INDEX OF LEADING ECONOMIC INDICATORS