The Congressional Budget Office expects the U.S. deficit this year will total $1.2 trillion and will be higher if an economic stimulus package is enacted.
That comes from new figures released by the agency on Wednesday morning.
The CBO expects the nation's unemployment rate to exceed nine percent in early 2010. November 2008 unemployment was 6.7% according to the U.S. Labor Department.
The report expects a marked contraction in the U.S. economy in calendar year 2009, with real (inflation-adjusted) gross domestic product (GDP) falling by 2.2 percent.
A slow recovery is expected in 2010, but real GDP grows by only 1.5 percent. The forecast also calls for a continued decline in inflation, both because energy prices have been falling and because inflation excluding energy and food prices-the core rate-tends to ease during and immediately after a recession.
The CBO also expects a drop in the national average price of a home, as measured by the Federal Housing Finance Agency's purchase-only index, of an additional 14 percent between the third quarter of 2008 and the second quarter of 2010.
The imbalance between the supply of and demand for housing persists, as reflected in unusually high vacancy rates and a low volume of housing starts.
The congressional budget Office also says the financial system remains strained, although some credit markets have started to improve. They conclude it is too early to determine whether the government's actions to date have been sufficient to put the system on a path to recovery.
You can read the full report by clicking here
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