A Congressional Budget Office (CBO) report on Friday forecasts a rise in U.S. unemployment from the current 3.9 percent to 4.4 percent by the end of 2024, signaling potential job losses for millions amidst a contracting gross domestic product (GDP).

The projected increase in unemployment, affecting an estimated 7.4 million Americans within the workforce, will come amidst economic adjustments and policy shifts, the CBO said in its "Current View of the Economy From 2023 to 2025" report.

The nonpartisan office said it expects weaker consumer spending into next year, as well as a contraction in nonresidential investment, which will cause deceleration in the economy, with real GDP growth slowing down from 2.5 percent this year to 1.5 percent in 2024.

Current jobless claims support the CBO's outlook, with around 202,000 new unemployment benefits filed in early December, and approximately 1.87 million workers continuing to claim unemployment benefits, indicating a tightening labor market.