Despite Everything, The U.S. Economy And Job Market Will Boom By Midyear

We can all use some good news and, today, we have some for you. The Congressional Budget Office (CBO) said it expects the U.S. gross domestic product (GDP) to hit its pre-pandemic highs this year. On the not-so-great side, it could take a number of years for employment to get back to where we were a year ago.

A combination of vaccines and relief spending—including financial help for households and businesses—will help the economy recover “rapidly” and the labor market return to “full strength quicker than expected.” The CBO anticipates things could kick in by midyear 2021.

The CBO wrote in its forecast, “Over the course of the coming year, vaccination is expected to greatly reduce the number of new cases of Covid-19, the disease caused by the coronavirus. As a result, the extent of social distancing is expected to decline. In its new economic forecast, which covers the period from 2021 to 203, the Congressional Budget Office therefore projects that the economic expansion that began in mid-2020 will continue.”

If you’re a numbers person, you’ll love this. It’s anticipated that we’ll see the following:

• Real GDP to grow 3.7% in 2021

• GDP growth to average 2.6% over the next five years

• The unemployment rate to fall to 5.3% in 2021, and further to 4% between 2024 and 2025

• Inflation to rise to 2% after 2023

• The Federal Reserve to start hiking the federal funds rate in mid-2024

• Upgraded economic outlook through 2025

The bottom line is that once we beat back the disease, vaccinate a good percentage of the population and reap the benefits of large trillion-dollar stimulus packages, we should return to a strong economy and robust job market.