State economist says deeper deficit looms in Minn.

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Minnesota's chief economist says there's no longer any doubt that a recession has arrived and a projected state budget deficit will "almost certainly" worsen.

State Economist Tom Stinson is briefing lawmakers on a report prepared by an economic consulting firm financial officials use to craft Minnesota's budget forecasts.

The memo states that a recession in the U.S. economy is expected for the first half of this year.

A new state budget forecast is due in a few weeks. In November, state finance officials projected a deficit in the two-year budget of $373 million.

Stinson says this recession will hit Minnesota hard because the state doesn't have strong defense and energy exploration industries to buffer other economic difficulties.

The poor housing market helped push the economy to the brink and Stinson says Minnesota will feel that pinch because of a substantial wood products industry.