WASHINGTON, Dec 10 (Reuters) - The recession-mired U.S. economy is likely to shrink 1.1 percent next year as job losses mount, according to a survey released on Wednesday that showed forecasters chopping their estimates of U.S. output. A month ago the consensus of economists polled by the Blue Chip Economic Indicators newsletter was for a contraction in U.S. gross domestic production of just 0.4 percent in 2009. Since then, however, a slew of data has shown U.S. exports falling at the fastest pace in seven years, declines in both consumer spending and business investment and a continued drag from the slumping housing sector. While the results of the latest poll taken on Dec. 3 and 4 were gloomy, they might have been even more pessimistic if economists were able to take into account a report on Friday that showed the economy shed 533,000 jobs in November, the steepest since December 1974. That brought job losses for the year to almost 2 million. The newsletter said this hefty job loss has "no doubt prompted many of our panelists to make even further reductions in the their forecasts of GDP ... over the next few quarters." The jobless rate, which hit a 15-year high of 6.7 percent last month, will likely continue to rise to average 7.8 percent for 2009, Blue Chip said. About 60 percent of the panelists said the jobless rate, a lagging indicator of the economy, will not peak until the first half of 2010 or later, even though the consensus is that next year's economic contraction will be limited to the first and second quarters. The panel saw some risk the United States could slip into a deflationary state in which prices economy-wide would fall. The economists put that risk at 3.3 on a scale of 1 to 10. To combat the economy's weakness and ward off the risk of deflation, the Federal Reserve is expected to cut benchmark overnight interest rates by one-half of a percentage point to just 0.5 percent at a meeting next Monday and Tuesday. (Reporting by Nancy Waitz; Editing by Diane Craft)

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