The economy will bounce back over the next several months, even without more stimulus aid from Congress, but employment levels are unlikely to fully recover until 2024, the Congressional Budget Office forecast Monday.
Much of the economic recovery hinges on the pace of vaccinations, the effectiveness of fiscal and monetary policies to curb the pandemic, and the evolution of the coronavirus as new strains turn up across the U.S., the independent budget office said in its latest economic projections.
The economy is expected to grow “rapidly” at 4.6 percent this year, continuing to expand over the next decade. The unemployment rate will drop from 6.8 percent in 2020 to 5.3 percent this year, with the number of employed people returning to pre-pandemic levels by 2024, CBO predicted.
The latest projections are rosier than CBO’s estimates from July because “the downturn was not as severe as expected and because the first stage of the recovery took place sooner and was stronger than expected,” the agency said.
The estimates assume that Congress does not provide any “significant additional emergency funding or aid,“ even though Democrats and President Joe Biden are working to pass more assistance with or without Republican help.
The $900 billion coronavirus relief package Congress passed in December is expected to boost GDP by an average of 1.5 percent this year and next year, while adding $774 billion to the deficit in fiscal 2021 and $98 billion in fiscal 2022.
This is not a CAPTIS article. Originally, it was published here.