Joe Smith holds a sign adverting a going out of business sale at the Hillsdale Shopping Center in San Mateo, California (File)

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.