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
March 13, 2024
The U.S. Bureau of Economic Analysis recently posted revised figures for Louisiana employment for both the state and metro areas, the Louisiana unemployment rate, and the Louisiana house price index. Many of these revisions were substantial and hence materially affected the forecasts for 2024. Consequently, the 2024 forecasts have been recomputed and are now posted below. Historical values for Louisiana real GSP have not yet been released by the BEA.
Forecast for Louisiana Non-Farm Employment (Thousands of Employees) |
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Quarter | Lower Bound | Forecast | Upper Bound |
2024:01 | 1924.83 | 1958.26 | 1991.70 |
2024:02 | 1919.12 | 1963.71 | 2008.30 |
2024:03 | 1916.94 | 1968.97 | 2021.01 |
2024:04 | 1913.93 | 1974.20 | 2034.46 |
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 1.11%. 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.
Forecast for Louisiana Unemployment Rate (%) |
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Quarter | Lower Bound | Forecast | Upper Bound |
2024:01 | 2.90 | 3.85 | 4.81 |
2024:02 | 2.50 | 3.77 | 5.04 |
2024:03 | 2.28 | 3.72 | 5.16 |
2024:04 | 2.15 | 3.70 | 5.25 |
The state unemployment rate is forecast to fall slightly over the course of the year from its 2023:04 value of 4.0% to 3.7% at the end of 2024.
Forecast for Louisiana Real GSP (Millions of $) |
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Quarter | Lower Bound | Forecast | Upper Bound |
2024:01 | 235613.55 | 240137.35 | 244661.15 |
2024:02 | 233104.04 | 240310.25 | 247516.47 |
2024:03 | 231057.84 | 240888.50 | 250719.15 |
2024:04 | 229427.17 | 241661.74 | 253896.30 |
Real GSP (the total volume of goods and services produced within Louisiana) is forecast to dip slightly in the first quarter but then rise slightly throughout the rest of the year. The forecast growth rate from the 4th quarter of 2023 to the 4th quarter of 2024 is only 0.39%. 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.
Forecast for Louisiana House Price Index |
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Quarter | Lower Bound | Forecast | Upper Bound |
2024:01 | 362.29 | 365.14 | 368.00 |
2024:02 | 360.37 | 365.87 | 371.37 |
2024:03 | 359.20 | 366.77 | 374.35 |
2024:04 | 358.08 | 368.07 | 378.07 |
The all-transactions Louisiana house price index is forecast to rise modestly. The rate of growth from the 4th quarter of 2023 to the 4th quarter of 2024 is forecast to be 1.10%. Monetary policy remains tight and mortgage rates remain above their level in 2020-2021.
Forecast for Alexandria Metro Area Non-Farm Employment (Thousands of Employees) |
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Quarter | Lower Bound | Forecast | Upper Bound |
2024:01 | 60.83 | 61.65 | 62.46 |
2024:02 | 60.70 | 61.78 | 62.87 |
2024:03 | 60.66 | 61.91 | 63.17 |
2024:04 | 60.63 | 62.04 | 63.45 |
Employment in the Alexandria metro area is forecast to rise 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 0.88%.
Forecast for Baton Rouge Metro Area Non-Farm Employment (Thousands of Employees) |
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Quarter | Lower Bound | Forecast | Upper Bound |
2024:01 | 416.94 | 423.25 | 429.57 |
2024:02 | 418.42 | 426.79 | 435.16 |
2024:03 | 419.81 | 430.04 | 440.26 |
2024:04 | 421.03 | 433.41 | 445.78 |
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, 3.33%, is the second strongest of any of the state’s metro areas.
Forecast for Hammond Metro Area Non-Farm Employment (Thousands of Employees) |
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Quarter | Lower Bound | Forecast | Upper Bound |
2024:01 | 48.81 | 49.61 | 50.40 |
2024:02 | 48.69 | 49.64 | 50.58 |
2024:03 | 48.68 | 49.65 | 50.63 |
2024:04 | 48.62 | 49.67 | 50.72 |
Employment in the Hammond metro area for 2024 is expected to increase very slightly. The rate of growth from the 4th quarter of 2023 to the 4th quarter of 2024 is forecast to be a very low 0.30%.
Forecast for Houma-Thibodaux Metro Area Non-Farm Employment (Thousands of Employees) |
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Quarter | Lower Bound | Forecast | Upper Bound |
2024:01 | 84.57 | 86.11 | 87.66 |
2024:02 | 84.21 | 86.49 | 88.77 |
2024:03 | 84.10 | 86.88 | 89.66 |
2024:04 | 84.09 | 87.27 | 90.44 |
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 1.74%, the third fastest forecast growth of the state’s metro areas.
Forecast for Lafayette Metro Area Non-Farm Employment (Thousands of Employees) |
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Quarter | Lower Bound | Forecast | Upper Bound |
2024:01 | 201.40 | 204.57 | 207.74 |
2024:02 | 200.51 | 204.93 | 209.35 |
2024:03 | 200.43 | 205.86 | 211.30 |
2024:04 | 200.53 | 207.04 | 213.54 |
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 1.15%, the fourth fastest of the state metro areas.
Forecast for Lake Charles Metro Area Non-Farm Employment (Thousands of Employees) |
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Quarter | Lower Bound | Forecast | Upper Bound |
2024:01 | 93.52 | 95.89 | 98.25 |
2024:02 | 92.47 | 96.03 | 99.60 |
2024:03 | 91.85 | 96.35 | 100.85 |
2024:04 | 91.49 | 96.67 | 101.86 |
Employment in the Lake Charles metro area is forecast to continue its slow rebound from the pandemic low. The forecast growth rate of 0.98% from the 4th quarter of 2023 to the 4th quarter of 2024 is the fifth fastest among the state’s metro areas.
Forecast for Monroe Metro Area Non-Farm Employment (Thousands of Employees) |
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Quarter | Lower Bound | Forecast | Upper Bound |
2024:01 | 76.83 | 77.88 | 78.94 |
2024:02 | 76.67 | 77.92 | 79.17 |
2024:03 | 76.40 | 77.78 | 79.16 |
2024:04 | 76.34 | 77.86 | 79.38 |
Employment in the Monroe metro area is forecast to rise slightly during 2024, increasing in the first quarter and then remaining essentially flat the rest of the year. The forecast growth rate of employment from the 4th quarter of 2023 to 4th quarter of 2024 is only 0.34%.
Forecast for New Orleans-Metairie Metro Area Non-Farm Employment (Thousands of Employees) |
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Quarter | Lower Bound | Forecast | Upper Bound |
2024:01 | 554.42 | 568.59 | 582.76 |
2024:02 | 555.12 | 575.08 | 595.05 |
2024:03 | 556.43 | 581.16 | 605.90 |
2024:04 | 557.40 | 586.93 | 616.45 |
Employment in the New Orleans-Metairie metro area is forecast to continue its strong rebound from the pandemic low and to end up just slightly below its pre-pandemic level by the end of 2024. The forecast growth rate from the 4th quarter of 2023 to the 4th quarter of 2024 is 4.42%, the strongest among the state’s metro areas.
Forecast for Shreveport-Bossier City Metro Area Non-Farm Employment (Thousands of Employees) |
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Quarter | Lower Bound | Forecast | Upper Bound |
2024:01 | 174.34 | 177.17 | 180.01 |
2024:02 | 173.76 | 177.35 | 180.95 |
2024:03 | 173.48 | 177.50 | 181.52 |
2024:04 | 173.13 | 177.64 | 182.15 |
After recovering steadily from its pandemic low, the forecast is for employment for the Shreveport-Bossier City metro area for 2024 to rise slightly over the course of the year. The growth rate of employment from the 4th quarter of 2023 to the 4th quarter of 2024 is a low 0.40%.
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