US Economic Productivity to Reach Pre-Pandemic Levels by Mid-2021, CBO Says

U.S. GDP will likely return to pre-pandemic levels in mid-2021 and surpass its potential level in early 2025, according to a Congressional Budget Office report released Monday. The civilian labor force and the employment rate are expected to return to pre-pandemic levels by 2022 and 2024, respectively. Real GDP growth is expected to hit 4.6% in 2021 and then decline, resulting in an average rate of 2.6% annually until 2025. The CBO also said that while recent coronavirus stimulus legislation will boost real GDP by 1.5% in 2021 and 2022, it will also “add $774 billion to the deficit in fiscal year 2021 and $98 billion in 2022.” The CBO report does not account for any new or proposed legislation after Jan. 12. Coverage in outlets on all sides included both growth and deficit numbers. Business-focused outlets tended to feature coverage of this story more prominently. Coverage varied widely in highlighting different numbers, particularly on whether the “labor market” would recover by 2022 or 2024.