Louisiana Economy Forecasting Model

As a service to the State of Louisiana, the LSU Department of Economics provides economic forecasts for the state and the nine metropolitan areas of the state for the current quarter and three quarters ahead. At the state level, forecasts are generated for four key economic variables: real Gross State Product (a measure of the real value of goods and services produced within Louisiana, analogous to national real GDP), total non-farm employment, the total unemployment rate, and the Louisiana house price index. At the metro level, due to data limitations, only total non-farm employment is forecast.

About the Forecasting Model

The forecasting model consists of a suite of statistical models. The statistical models used are the ones that yielded the best out-of-sample forecasts over a long period of time. The specification procedure replicates what a forecaster would do in real-time to generate out-of-sample forecasts, i.e., estimate a model using data up to the point of the forecast and then forecast out-of-sample.

The current forecasting model should be viewed as the first iteration in an ongoing process. Well-specified statistical models can predict accurately when the future is similar to the past. Of course, structural changes can make the future different from the past, and the quality of statistical model forecasts will deteriorate unless the model is adjusted to account for these changes. Consequently, it is necessary to revisit the specifications periodically as more data become available.

Additional Information

Two of the statistical models—a state-level model and a national model—are Bayesian Vector Autoregressive Models (BVARs) and the remaining models are single-equation autoregressive models.

Economists have used BVAR models to forecast state and national economic variables. Typically, these models have been found to forecast out-of-sample better than standard Vector Autoregressive (VAR) Models and to be very competitive with larger, more complex, more difficult to specify, and more costly to maintain structural models, often delivering more accurate forecasts. These models are described more completely in the More About the Model section.

The forecasts we present are purely statistical and don’t reflect any subjective adjustments, which are left to the discretion of the forecast user. We provide the best estimate of the variable in each of the four quarters of the forecast (the red line in graphs of the forecast) and a forecast cone (the grey area) that reflects the relative accuracy of past forecasts for that variable at each forecast horizon. The cone “fans” out because the farther ahead we forecast, the less accurate the forecast, a well-known characteristic of economic forecasts.  

Questions? Contact Us.

LSU Department of Economics
2300 Business Education Complex
501 South Quad Dr.
Baton Rouge, LA 70803
225-578-5211 | econ@lsu.edu

Current Louisiana Forecasts

February 9, 2024

The U.S. Bureau of Labor Statistics has still not released quarterly state-level rebased real GSP data before 2018, and a release date is uncertain. The historical data may be released in late March with the next scheduled state-level data release date, or it may be later. Rather than continue to wait until the historical data are released, an ad hoc procedure was used in the construction of forecasts for base year 2017 Louisiana real GSP for 2024. After the official historical data are released by the BLS, the 2024 forecasts will be recomputed. The initial forecast of state-level real GSP from the Louisiana Economy Forecasting Model made in August 2023 was for the old base year 2012 real GSP, so the numbers from that forecast aren’t directly comparable to the numbers in this forecast.  

 

 a graph depicting the louisiana employment rate for 2024

 

Forecast for Louisiana Non-Farm Employment (Thousands of Employees)

Quarter Lower Bound Forecast Upper Bound
2024:01         1945.89 1979.12 2012.35
2024:02       1940.97 1985.21 2029.45
2024:03    1939.40 1991.18    2042.96
2024:04 1937.07    1997.10 2057.13

 

Employment is forecast to continue its rebound from the pandemic low and to hit the pre-pandemic level in the 2nd quarter of 2024. The forecast growth rate from the 4th quarter of 2023 to the 4th quarter of 2024 is a modest 1.22%. Although the forecast value at the end of 2024 is above its level just before the pandemic hit, it is still slightly below the peak achieved in the 4th quarter of 2014. However, the forecast band includes the 2014:04 value.  

chart showing the unemployment rate for louisiana in 2024

 

Forecast for Louisiana Unemployment Rate (%)

Quarter Lower Bound Forecast Upper Bound
2024:01       2.57   3.52 4.47
2024:02     2.30 3.56 4.82
2024:03     2.16 3.60  5.03
2024:04   2.10 3.64 5.18

 

The state unemployment rate is forecast to rise very slightly over the course of the year from its 2023:04 value of 3.5% to 3.6% at the end of 2024 but to remain below its longer-run average.

 

chart showing louisiana's real GSP for 2024

 

Forecast for Louisiana Real GSP (Millions of $)

Quarter Lower Bound Forecast Upper Bound
2024:01      235820.74    240344.76    244868.78
2024:02    233507.43 240715.13 247922.83
2024:03    231650.55 241485.40 251320.24
2024:04  230205.24 242447.51 254689.77 

 

Real GSP (the total volume of goods and services produced within Louisiana) is forecast to continue its slow rise from the pandemic low; the forecast growth rate from the 4th quarter of 2023 to the 4th quarter of 2024 is only 0.71%. The level of real GSP is forecast to remain below its pre-pandemic level. The forecast is for the rebased and revised real GSP. The base year is now 2017. The initial forecast from the Louisiana Economy Forecasting Model made in August 2023 was for the old base year 2012 real GSP, so the numbers from that forecast aren’t directly comparable to the numbers in this forecast.  

Please note that the BEA has still not released historical quarterly data before 2018 for 2017 base year real GSP, so an ad hoc adjustment to the forecasting model was made to generate base year 2017 forecasts for real GSP. The next BEA release is scheduled for late March 2024, and we hope that the historical data will be released then. If it is, the 2024 forecast will be re-computed.

 

chart showing the louisiana house price index forecast for 2024

 

Forecast for Louisiana House Price Index 

Quarter Lower Bound Forecast Upper Bound
2024:01    356.08 358.96 361.84
2024:02       353.32 358.87 364.42
2024:03    350.28 357.94 365.60
2024:04 346.66 356.86 367.05

 

The all-transactions Louisiana house price index is forecast to continue its slight decline from its peak in 2022. The rate of decline from the 4th quarter of 2023 to the 4th quarter of 2024 is forecast to be -0.82%. Monetary policy remains tight and mortgage rates remain above their level in 2020-2021.

 

chart showing the emploment forecast for Alexandria, Louisiana for 2024

 

Forecast for Alexandria Metro Area Non-Farm Employment (Thousands of Employees)

Quarter Lower Bound Forecast Upper Bound
2024:01      62.81 63.63 64.45
2024:02    62.61    63.70 64.79
2024:03    62.51 63.78 65.05
2024:04  62.43 63.86 65.30

 

Employment in the Alexandria metro area is forecast to rise slightly in 2024 although forecast employment at the end of 2024 remains well below its 2008:01 peak. The rate of growth in employment from the 4th quarter of 2023 to the 4th quarter of 2024 is forecast to be a low 0.47%. 

 

chart showing the employment forecast for Baton Rouge, Louisiana in 2024

 

Forecast for Baton Rouge Metro Area Non-Farm Employment (Thousands of Employees)

Quarter Lower Bound Forecast Upper Bound
2024:01    425.21 431.53 437.85
2024:02    427.91 436.11 444.31
2024:03    431.03 440.73 450.44
2024:04    433.99 445.51 457.02

 

Employment in the Baton Rouge metro area is forecast to continue its strong rebound from the pandemic-related plunge in employment. The forecast rate of growth in employment from the 4th quarter of 2023 to the 4th quarter of 2024, 4.19%, is the strongest of any of the state’s metro areas.

 

chart showing the employment forecast for Hammond, Louisiana for 2024

 

Forecast for Hammond Metro Area Non-Farm Employment (Thousands of Employees)

Quarter Lower Bound Forecast Upper Bound
2024:01     47.69 48.49 49.28
2024:02    47.53 48.48 49.42
2024:03    47.51 48.46 49.41
2024:04   47.46 48.45 49.44

 

Employment in the Hammond metro area for 2024 is expected to decline very slightly which continues the marginal employment decline since the peak in 2023:02. The rate of growth from the 4th quarter of 2023 to the 4th quarter of 2024 is forecast to be -0.09%.   

 

chart showing the employment forecast for Houma-Thibocaux, Louisiana for 2024

 

Forecast for Houma-Thibodaux Metro Area Non-Farm Employment (Thousands of Employees)

Quarter Lower Bound Forecast Upper Bound
2024:01         80.86 82.39 83.91
2024:02     80.46 82.71 84.96
2024:03     80.26 83.04 85.83
2024:04 80.18 83.36 86.55

 

Employment in the Houma-Thibodaux metro is forecast to rise from the 2023 level but to remain well below its value just before the pandemic. The rate of growth from the 4th quarter of 2023 to the 4th quarter of 2024 is forecast to be 1.61%, the third fastest forecast growth of the state’s metro areas.  

 

chart showing the employment rate for Lafayatte, Louisiana in 2024

 

Forecast for Lafayette Metro Area Non-Farm Employment (Thousands of Employees)

Quarter Lower Bound Forecast Upper Bound
2024:01     201.73    204.92 208.11
2024:02    200.77    205.26 209.74
2024:03    200.66 206.16 211.67
2024:04   200.76 207.30 213.84

 

The employment forecast for the Lafayette metro area is growth in 2024 beginning in the second quarter with employment at the end of 2024 rising above the pre-pandemic level. The rate of growth of employment from the 4th quarter of 2023 to the 4th quarter of 2024 is forecast to be 1.07%, the fourth fastest of the state metro areas.

 

chart showing the employment forecast for Lake Charles, Louisiana in 2024

 

Forecast for Lake Charles Metro Area Non-Farm Employment (Thousands of Employees)

Quarter Lower Bound Forecast Upper Bound
2024:01     95.82 98.15 100.49
2024:02      94.82 98.36 101.90
2024:03       94.09 98.62 103.15
2024:04  93.68 98.91 104.12

 

Employment in the Lake Charles metro area is forecast to continue its slow rebound from the pandemic low. The forecast growth rate of 1.05% from the 4th quarter of 2023 to the 4th quarter of 2024 is the fifth fastest among the state’s metro areas.

 

chart showing the employment forecast for Monroe, Louisiana in 2024

 

Forecast for Monroe Metro Area Non-Farm Employment (Thousands of Employees)

Quarter Lower Bound Forecast Upper Bound
2024:01    77.57 78.62 79.67
2024:02       77.55 78.79 80.03
2024:03    77.24 78.63 80.03
2024:04 77.17 78.70 80.23

 

Employment in the Monroe metro area is forecast to essentially move sideways during 2024, rising by a very small amount from the 4th quarter of 2023 to the end of 2024. The forecast growth rate of employment from the 4th quarter of 2023 to 4th quarter of 2024 is only 0.33%.

 

chart showing the employment forecast in New Orleans, Louisiana in 2024

 

Forecast for New Orleans-Metairie Metro Area Non-Farm Employment (Thousands of Employees)

Quarter Lower Bound Forecast Upper Bound
2024:01    566.43 580.58    594.73
2024:02      566.31    586.30    606.28
2024:03    567.018 591.77 616.52
2024:04  567.58 597.02 626.46

 

Employment in the New Orleans-Metairie metro area is forecast to continue its strong rebound from the pandemic low and to surpass its pre-pandemic level during 2024. The forecast growth rate from the 4th quarter of 2023 to the 4th quarter of 2024 is 3.83%, the second strongest among the state’s metro areas.   

 

chart showing the employment forecast for Shreveport, Louisiana in 2024

 

Forecast for Shreveport-Bossier City Metro Area Non-Farm Employment (Thousands of Employees)

Quarter Lower Bound Forecast Upper Bound
2024:01     175.62 178.40 181.19
2024:02     174.89 178.42 181.95
2024:03    174.49 178.46 182.44
2024:04  174.05 178.54 183.03

 

After recovering steadily from its pandemic low, the forecast for employment for the Shreveport-Bossier City metro area for 2024 is a continuation of the stagnation in employment that began in 2023. The forecast growth rate of employment from the 4th quarter of 2023 to the 4th quarter of 2024 is an anemic 0.08%.

 

 

 

 

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