The outlook continues to be clouded by COVID-19 but a team of University of Michigan economists sees encouraging signs that could bring economic life close to normal by the end of 2021.
Much, though, will depend on how readily a vaccine becomes available by next summer.
The annual U.S. Economic Outlook, released Thursday morning, indicated that the real gross domestic product is expected to rise by 4.2% in 2021.
Real GDP is expected to decline by 3.6% year-over-year in 2020, according to the U-M forecast.
"Regardless of what happens in the near term with the virus, I think the recovery will be pretty vigorous once we get a wide rollout of a vaccine," said Daniil Manaenkov, U.S. forecasting specialist for the U-M Research Seminar in Quantitative Economics, in a statement.
The negative risks, he maintained, are mostly short-term and may only influence the timing of the recovery.
"But then again," he said, acknowledging the shocking disruption to the economy in 2020, "it could be our own fatigue of forecasting gloom talking."
The forecast was prepared by Manaenkov and U-M economists Jacob Burton, Gabriel Ehrlich, Tereza Ranosova and Aditi Thapar.
The U-M forecast assumes that a vaccine will be available to workers on the front lines by early 2021, with wider availability by next summer.
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