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
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Forecast for Louisiana Non-Farm Employment (Thousands of Employees) |
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| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:02 | 1930.86 | 1964.04 | 1997.22 |
| 2024:03 | 1926.09 | 1970.37 | 2014.65 |
| 2024:04 | 1924.81 | 1976.45 | 2028.10 |
| 2025:01 | 1922.71 | 1982.35 | 2041.99 |
The post-pandemic rebound in employment is forecast to continue, rising at a projected 1.28% rate from the first quarter of 2024 to the first quarter of 2025. However, projected employment at the end of the forecast period is forecast to still be below its pre-pandemic level and its 2014 peak.
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Forecast for Louisiana Unemployment Rate (%) |
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| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:02 | 3.03 | 3.98 | 4.93 |
| 2024:03 | 2.57 | 3.83 | 5.09 |
| 2024:04 | 2.30 | 3.72 | 5.15 |
| 2025:01 | 2.12 | 3.65 | 5.19 |
The state unemployment rate is forecast to fall over the next four quarters from its 2024:01 value of 4.2% to 3.7% in the first quarter of 2025.
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Forecast for Louisiana Real GSP (Millions of $) |
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| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:02 | 237641.91 | 242310.61 | 246979.30 |
| 2024:03 | 235487.41 | 243169.67 | 250851.93 |
| 2024:04 | 233560.30 | 244208.14 | 254855.98 |
| 2025:01 | 232145.11 | 245334.64 | 258524.17 |
Real GSP (the total volume of goods and services produced within Louisiana) is forecast to rise in each quarter of the forecast horizon but to remain below its pre-pandemic level. The growth rate from the 1st quarter of 2024 to the 1st quarter of 2025 is forecast to be 1.5%.
Please note that the BEA has still not released historical quarterly data before 2018 for 2017 base year real GSP, so the 2012 base year data before 2018 was converted (no doubt imperfectly) to base year 2017 for the forecasts. We continue to hope that the historical data will be released soon. Once this is done, the forecast will be re-computed.
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Forecast for Louisiana House Price Index |
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| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:02 | 364.22 | 367.06 | 369.91 |
| 2024:03 | 363.22 | 368.71 | 374.19 |
| 2024:04 | 362.89 | 370.40 | 377.92 |
| 2025:01 | 361.98 | 371.90 | 381.81 |
The all-transactions Louisiana house price index is forecast to rise moderately. The rate of growth from the 1st quarter of 2024 to the 1st quarter of 2025 is forecast to be 1.83%. Monetary policy remains tight and mortgage rates remain above their level in 2020-2021.
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Forecast for Alexandria Metro Area Non-Farm Employment (Thousands of Employees) |
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| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:02 | 60.84 | 61.65 | 62.47 |
| 2024:03 | 60.78 | 61.86 | 62.95 |
| 2024:04 | 60.80 | 62.06 | 63.32 |
| 2025:01 | 60.83 | 62.25 | 63.67 |
Employment in the Alexandria metro area is forecast to rise over the current forecast horizon although forecast employment at the end of the forecast horizon remains well below its 2008:01 peak. The rate of growth in employment from the 1st quarter of 2024 to the 1st quarter of 2025 is forecast to be 1.32%.
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Forecast for Baton Rouge Metro Area Non-Farm Employment (Thousands of Employees) |
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| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:02 | 418.96 | 425.24 | 431.53 |
| 2024:03 | 420.11 | 428.46 | 436.81 |
| 2024:04 | 421.22 | 431.44 | 441.65 |
| 2025:01 | 422.15 | 434.50 | 446.85 |
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 1st quarter of 2024 to the 1st quarter of 2025, 3.07%, is the second strongest of any of the state’s metro areas.
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Forecast for Hammond Metro Area Non-Farm Employment (Thousands of Employees) |
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| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:02 | 48.99 | 49.78 | 50.57 |
| 2024:03 | 48.88 | 49.82 | 50.75 |
| 2024:04 | 48.87 | 49.84 | 50.81 |
| 2025:01 | 48.81 | 49.86 | 50.90 |
A very slight increase in employment is forecast for the Hammond metro area for the 2024:02-2025:01 period. The rate of growth from the 1st quarter of 2024 to the 1st quarter of 2025 is forecast to be a very low 0.35%.
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Forecast for Houma-Thibodaux Metro Area Non-Farm Employment (Thousands of Employees) |
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| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:02 | 84.36 | 85.89 | 87.42 |
| 2024:03 | 84.05 | 86.32 | 88.58 |
| 2024:04 | 83.99 | 86.76 | 89.53 |
| 2025:01 | 84.01 | 87.20 | 90.38 |
Employment in the Houma-Thibodaux metro area is forecast to continue its rise from the pandemic low, almost recovering to the level just before the pandemic. The rate of growth from the 1st quarter of 2024 to the 1st quarter of 2025 is forecast to be 1.96%, the third fastest forecast growth of the state’s metro areas.
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Forecast for Lafayette Metro Area Non-Farm Employment (Thousands of Employees) |
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| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:02 | 202.09 | 205.24 | 208.38 |
| 2024:03 | 201.42 | 205.82 | 210.21 |
| 2024:04 | 201.30 | 206.73 | 212.15 |
| 2025:01 | 201.14 | 207.67 | 214.21 |
Employment for the Lafayette metro area is forecast to continue its rise from the pandemic low. The rate of growth of employment from the 1st quarter of 2024 to the 1st quarter of 2025 is forecast to be 1.21%, the fourth fastest of the state metro areas.
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Forecast for Lake Charles Metro Area Non-Farm Employment (Thousands of Employees) |
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| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:02 | 93.68 | 96.03 | 98.38 |
| 2024:03 | 92.73 | 96.28 | 99.83 |
| 2024:04 | 92.19 | 96.66 | 101.14 |
| 2025:01 | 91.87 | 97.02 | 102.17 |
The slow rebound in employment in the Lake Charles metro area from the pandemic low is forecast to continue. The forecast growth rate of 1.12% from the 1st quarter of 2024 to the 1st quarter of 2025 is the fifth fastest among the state’s metro areas.
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Forecast for Monroe Metro Area Non-Farm Employment (Thousands of Employees) |
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| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:02 | 76.37 | 77.42 | 78.47 |
| 2024:03 | 76.08 | 77.32 | 78.56 |
| 2024:04 | 75.87 | 77.24 | 78.61 |
| 2025:01 | 75.82 | 77.33 | 78.83 |
Employment in the Monroe metro area is forecast to basically move sideways, increasing a bit in the second quarter and then easing slightly over the rest of the forecast horizon. The forecast growth rate of employment from the 1st quarter of 2024 to the 1st quarter of 2025 is only 0.38%.
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Forecast for New Orleans-Metairie Metro Area Non-Farm Employment (Thousands of Employees) |
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| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:02 | 552.98 | 567.15 | 581.32 |
| 2024:03 | 553.96 | 574.12 | 594.28 |
| 2024:04 | 555.57 | 580.77 | 605.97 |
| 2025:01 | 556.87 | 587.12 | 617.36 |
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 the first quarter of 2025. The forecast growth rate from the 1st quarter of 2024 to the 1st quarter of 2025 is 4.79%, the strongest among the state’s metro areas.
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Forecast for Shreveport-Bossier City Metro Area Non-Farm Employment (Thousands of Employees) |
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| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:02 | 174.34 | 177.17 | 180.01 |
| 2024:03 | 173.76 | 177.35 | 180.95 |
| 2024:04 | 173.48 | 177.50 | 181.52 |
| 2025:01 | 173.13 | 177.64 | 182.15 |
After recovering steadily from its pandemic low and then falling a bit, the forecast is for employment for the Shreveport-Bossier City metro area to rise slightly over the forecast horizon. The growth rate of employment from the 1st quarter of 2024 to the 1st quarter of 2025 is forecast to be 0.75%.
More EconomicS Research at LSU