WASHINGTON—The U.S. economy is expected to expand more rapidly in 2021 than officials projected in July, but it will take several years for output to reach its full potential and for the number of employed workers to return to its pre-pandemic peak, according to new economic projections released Monday.

The Congressional Budget Office said it expects gross domestic product, the broadest measure of economic output, will return to its pre-pandemic level by the middle of this year, thanks in part to a surge of relief spending Congress authorized in 2020, including aid for households and businesses.

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Gross domestic product is expected to grow 3.7% in the fourth quarter of 2021 compared with a year earlier and to expand 2.4% in 2022. Growth will average 2.6% a year through 2025, the CBO said. The agency said a roughly $900 billion relief bill enacted in December will add about 1.5% to the level of GDP this year and next. Read more at WSJ