The Congressional Budget Office says the U.S. economy will expand more in 2021 than previously projected, though the economic fallout from the coronavirus will have a long-lasting impact on the labor market.

The non-partisan agency’s update to its economic projections showed gross domestic product will increase 4.2% in 2021 on a fourth quarter-to-fourth quarter basis after slumping 5.6% this year. That compares with its preliminary April 24 estimate for a 2.8% increase next year.

At the same time, the unemployment rate is seen averaging 11.5% this year and only improving marginally in 2021 to 9.3%, just under the high reached in the 2007-2009 recession. The effects of the coronavirus on the economy will stick around for years to come, particularly for those just entering or new to the labor market.

“The reduction in the number of people employed in 2020 and the persistence of high unemployment through 2021 may have a negative effect on the job prospects and earnings of younger generations that will be felt long into the future,” according to the CBO.

The economy in the second quarter will contract at a historic 37.7% annualized rate, slightly less than the initial forecast. The agency still sees a bounce back in general economic activity in the second half of the year.

It’s a huge shift in expectations from the start of 2020, when CBO analysts upgraded their growth projections for the record-long expansion. Since then, the coronavirus has wreaked havoc on businesses and people, hollowing out the labor market and slowing spending dramatically.

“To account for the chances of the pandemic persisting or reemerging, CBO projects that social distancing will continue, but to a declining degree,” according to the report. “The persistence of social distancing will keep economic activity and labor-market conditions suppressed for some time.”