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US recession odds rise to 40 percent: Deutsche Bank economist

A worker TIG welds aluminum on the production line at the Littman Brands Troy-CSL Lighting Inc. manufacturing facility in Los Angeles.
Kevork Djansezia | Bloomberg | Getty Images

The odds of a U.S. recession this year have risen to 40 percent, according to Deutsche Bank's chief U.S. economist, Joseph LaVorgna.

ISM nonmanufacturing data Wednesday was surprisingly weak, with the index at 53.5, down from 55.8 in December. Economists had expected 55.1, which would have showed just a slight slowing in the service side of the economy.

Markets had been watching the number for any signs of cracks in the service sector, which had been going strong while manufacturing dipped into recession. The index shows contraction when it is under 50, but the January level was the lowest since December 2013.

Read MoreServices sector slowed in January