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US Budget Deficit to Hit $1.2 Trillion

The economic experts who work for the U.S. Congress say the U.S. budget deficit will balloon this year, while the economy shrinks, and unemployment soars.

The non-partisan Congressional Budget Office says Wednesday that the deficit will hit a record-high $1.2 trillion this year, while the economy shrinks more than two percent.

The CBO experts say the recession will probably end in mid-2009, but not before the unemployment rate soars above nine percent.

Other economists predict that a report Friday will show U.S. unemployment already hit seven percent in December, with a net loss of half a million jobs for the month.

Two reports from private companies Wednesday reinforced the downbeat expectations. A nation-wide employment firm, Challenger, Gray and Christmas, says planned layoffs in December were nearly triple the same period a year earlier. And a company that processes payrolls (ADP) says private firms cut almost 700,000 jobs in December.

Some information for this report was provided by AFP, AP and Reuters.