UPDATE 2-Obama to name economic recovery panel

(New throughout with more details)

WASHINGTON, Feb 5 (Reuters) - U.S. President Barack Obama on Friday will name a panel of outside advisers who will help shape his response to the recession and the worst financial crisis since the Great Depression.

Obama announced in November that former Federal Reserve Chairman Paul Volcker would lead the Economic Recovery Advisory Board, a group that would include businesspeople, labor experts and academic economists.

The panel is modeled after the Foreign Intelligence Advisory Board, which was created under former President Dwight Eisenhower and gives advice on intelligence matters.

“President Obama and Paul Volcker will announce the members of the President’s Economic Recovery Advisory Board and outline plans for the board moving forward at an event at the White House tomorrow,” White House spokeswoman Jen Psaki said.

The naming of the panel comes amid a raft of data showing the economy is sinking deeper into recession as layoffs surge.

Economists are bracing for more grim news on Friday when the Labor Department issues its January employment report at 8:30 a.m. EST (1330 GMT).

Analysts polled by Reuters predicted the data will show U.S. employers slashed another 525,000 workers from their payrolls after cutting 524,000 jobs in December.

Obama said part of the intent of the economic panel was to make sure he avoided “insular” decision-making.

Volcker is among several high-profile players advising Obama on economic policy. The team also includes Lawrence Summers, the former Treasury secretary who is now head of the National Economic Council, and Timothy Geithner, the former New York Federal Reserve president who is now Treasury secretary.

Volcker, 81, played a big role advising Obama during the campaign and gave the Democratic candidate a boost when he publicly endorsed him a year ago.

As Federal Reserve chairman from 1979 to 1987 under former Presidents Jimmy Carter and Ronald Reagan, Volcker was credited with making the tough decision to ratchet interest rates sharply higher to break the back of a U.S. inflation cycle.

Austan Goolsbee, a longtime Obama adviser, is serving as staff director and chief economist for the 15-member economic advisory panel. Goolsbee is also a member of the White House Council of Economic Advisers. (Reporting by Caren Bohan; editing by Anthony Boadle)