Gauge of economy falls, recession looms: ECRI

NEW YORK (Reuters) - A weekly gauge of future U.S. economic growth fell hard and its annualized growth rate plunged to a six-year low, a research group said on Friday, indicating the risk of recession is very high.

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 131.1 in the week to January 25 from 135.7 in the prior week, revised down from 135.8.

The WLI fell due to higher jobless claims, weaker housing activity and lower stock prices, said Lakshman Achuthan, managing director at ECRI.

The index’s annualized growth rate plunged to minus 7.1 percent from minus 6.0 percent.

“WLI growth has dropped back to the six-year low seen in early January,” Achuthan said.

“While the economy and employment did continue to grow through the end of 2007, the window of opportunity to avert a U.S. recession is about to slam shut.”

Reporting by Rodrigo Campos; Editing by James Dalgleish