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 | [email protected]
Current Louisiana Forecasts
Forecast for Louisiana Non-Farm Employment (Thousands of Employees)
| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:04 | 1938.74 | 1969.99 | 2001.23 |
| 2025:01 | 1935.54 | 1976.44 | 2017.34 |
| 2025:02 | 1934.68 | 1981.63 | 2028.59 |
| 2025:03 | 1933.20 | 1986.56 | 2039.92 |
Employment is forecast to rise steadily over the next four quarters, with employment forecast to be 1.34% greater in the 3rd quarter of 2025 than in the 3rd quarter of 2024.
How does Louisiana employment compare to that of the rest of the Southeastern Conference (SEC)?
It is instructive to compare employment in Louisiana to that in other states, for example, the states that are home to schools in the Southeastern Conference. The first table below shows annual total non-farm employment in the U.S. and the states of the SEC for 2018 and 2023 and the change in employment from 2018 to 2023. The focus is on 2018 and 2023 since a similar comparison will be made for real GSP, and official real GSP data from the Bureau of Economic Analysis (BEA) are available only beginning in 2018.
In 2018, Louisiana had the 8th largest employment in the SEC but slipped to 9th in 2023. Louisiana was the only state in the SEC with a decline in employment over the 2018-2023 period, which fell 1.85%. Note the similarity to resident population (second table below); Louisiana had the 9th largest population in both 2018 and 2023, but population fell 1.94% over this period.
| Location | 2018 | 2023 | Change (#) | Change (%) |
|---|---|---|---|---|
| United States | 148896.60 | 156065.50 | 7168.92 | 4.81 |
| Texas | 12523.40 | 13912.41 | 1389.01 | 11.09 |
| Florida | 8790.21 | 9754.11 | 963.90 | 10.97 |
| Georgia | 4545.72 | 4909.24 | 363.53 | 8.00 |
| Tennessee | 3074.08 | 3309.12 | 235.03 | 7.65 |
| Missouri | 2892.96 | 2976.57 | 83.61 | 2.89 |
| South Carolina | 2154.66 | 2306.38 | 151.72 | 7.04 |
| Alabama | 2046.05 | 2164.26 | 118.21 | 5.78 |
| Louisiana | 1990.89 | 1954.08 | -36.81 | -1.85 |
| Kentucky | 1930.44 | 2017.14 | 86.70 | 4.49 |
| Oklahoma | 1689.59 | 1755.55 | 65.96 | 3.90 |
| Arkansas | 1267.42 | 1350.67 | 83.25 | 6.57 |
| Mississippi | 1153.83 | 1180.34 | 26.52 | 2.30 |
| Location | 2018 | 2023 | Change (#) | Change (%) |
|---|---|---|---|---|
| United States | 328794.50 | 335208.42 | 6413.92 | 1.95 |
| Texas | 28624.56 | 30503.30 | 1878.74 | 6.56 |
| Florida | 21254.93 | 22610.73 | 1355.80 | 6.38 |
| Georgia | 10519.39 | 11029.23 | 509.84 | 4.85 |
| Tennessee | 6778.18 | 7126.49 | 70.17 | 1.15 |
| Missouri | 6125.99 | 6196.16 | 83.61 | 2.89 |
| South Carolina | 5091.70 | 5373.56 | 281.85 | 5.54 |
| Alabama | 4891.63 | 5108.47 | 216.84 | 4.43 |
| Louisiana | 4664.45 | 4573.75 | -90.70 | -1.94 |
| Kentucky | 4464.27 | 4526.15 | 61.88 | 1.39 |
| Oklahoma | 3943.49 | 4053.82 | 110.34 | 2.80 |
| Arkansas | 3012.16 | 3067.73 | 55.57 | 1.84 |
| Mississippi | 2982.88 | 2939.69 | -43.19 | -1.45 |
Forecast for Louisiana Unemployment Rate (%)
| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:04 | 2.80 | 3.68 | 4.57 |
| 2025:01 | 2.38 | 3.56 | 4.75 |
| 2025:02 | 2.14 | 3.48 | 4.82 |
| 2025:03 | 1.96 | 3.40 | 4.84 |
The Louisiana unemployment rate is forecast to continue to slowly fall from 3.9% in the 3rd quarter of 2024 to 3.4% in the 3rd quarter of 2025. Thus, excepting the temporary pandemic-related spike in the unemployment rate, the unemployment rate is forecast to continue its general downward drift from 7.8% in the 4th quarter of 2010.
Forecast for Louisiana Real GSP (Millions of $)
| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:04 | 253446.73 | 257562.72 | 261678.70 |
| 2025:01 | 251619.38 | 258200.81 | 264782.24 |
| 2025:02 | 249943.888 | 258760.79 | 267577.70 |
| 2025:03 | 248536.70 | 259362.83 | 270188.95 |
Real GSP is forecast to continue its rise from the pandemic low, but the growth rate from the 3rd quarter of 2024 to the 3rd quarter of 2025 is forecast to be only 1.09%. Real GSP rebounded strongly from the pandemic low but lately the pace of increase has slowed substantially.
How does Louisiana real GSP compare to that of the rest of the Southeastern Conference (SEC)?
The first table below shows annual real GDP or GSP in the U.S. and the states of the SEC for 2018 and 2023 and the change in real GDP/GSP from 2018 to 2023. Official data from the Bureau of Economic Analysis (BEA) for real GSP are available only beginning in 2018.
As was the case for employment, real GSP in both Texas and Florida dwarfs that of the rest of the SEC, and these states had the largest percentage increases in real GSP in the SEC from 2018 to 2023. Georgia is third in the size of real GSP, and its real GSP is substantially larger than the states below it. In 2018, Louisiana was 6th in size of real GSP just ahead of South Carolina, but Louisiana and South Carolina swapped places in 2023 following strong growth in South Carolina and disappointingly very slow growth in Louisiana. Louisiana’s 1.38% growth rate over this period was far below the rates of growth in the rest of the SEC.
Louisiana fares better in terms of real per capita GSP, i.e. real GSP divided by the resident population. Louisiana was 4th in the SEC in 2018 just ahead of Missouri, but Missouri and Louisiana swapped ranks in 2023 and Florida jumped over both, rising from 7th to 4th. Louisiana experienced the second slowest growth in real GDP per capita of the SEC states over this period.
What about real GDP per worker, a measure of the average productivity of a non-farm worker? Louisiana was a strong 3rd in 2018 but was surpassed in 2023 by both Florida and Tennessee. Louisiana’s growth in real per worker GSP of 3.29% exceeded only Oklahoma’s dismal rate of growth of 2.08%.
In terms of the size of the economy (total real GSP), over the 2018-2024 period Louisiana slipped from the last position in the top half of the SEC to the top of the bottom half of the SEC. Louisiana’s relative standing in terms of real GSP per capita or real GSP per worker was and is higher than for real GSP, but, unfortunately, Louisiana slipped in its position for per capita or per worker real GSP from 2018 to 2023.
| Location | 2018 | 2023 | Change (#) | Change (%) |
|---|---|---|---|---|
| United States | 20193895.25 | 22671096.50 | 2477201.25 | 12.27 |
| Texas | 1746543.25 | 2097090.40 | 350547.15 | 20.07 |
| Florida | 1050433.80 | 1292787.60 | 242353.80 | 23.07 |
| Georgia | 600934.70 | 678201.18 | 77266.48 | 12.86 |
| Tennessee | 362363.70 | 422087.70 | 59724.00 | 16.48 |
| Missouri | 314182.40 | 348487.42 | 34305.02 | 10.92 |
| Louisiana | 245220.27 | 248615.50 | 3395.23 | 1.38 |
| South Carolina | 231663.27 | 262298.50 | 30635.23 | 13.22 |
| Alabama | 220808.75 | 245354.65 | 24545.90 | 11.12 |
| Kentucky | 205940.10 | 224418.02 | 18477.92 | 8.97 |
| Oklahoma | 196030.52 | 207923.35 | 11892.83 | 6.07 |
| Arkansas | 126371.23 | 142860.55 | 16489.32 | 13.05 |
| Mississippi | 110174.77 | 119548.38 | 9373.60 | 8.51 |
| Location | 2018 | 2023 | Change (#) | Change (%) |
|---|---|---|---|---|
| United States | 61417.98 | 67632.84 | 6214.85 | 10.12 |
| Texas | 61015.54 | 68749.62 | 7734.08 | 12.68 |
| Georgia | 57126.39 | 61491.27 | 4364.88 | 7.64 |
| Tennessee | 53460.32 | 59228.00 | 5767.68 | 10.79 |
| Louisiana | 52572.17 | 54357.05 | 1784.88 | 3.40 |
| Missouri | 51286.83 | 56242.52 | 4955.69 | 9.66 |
| Oklahoma | 49709.93 | 51290.67 | 1580.74 | 3.18 |
| Florida | 49420.72 | 57175.86 | 7755.13 | 15.69 |
| Kentucky | 46130.71 | 49582.50 | 3451.78 | 7.48 |
| South Carolina | 45498.20 | 48812.84 | 3314.64 | 7.29 |
| Alabama | 45140.14 | 48029.01 | 2888.87 | 6.40 |
| Arkansas | 41953.68 | 46568.78 | 4615.11 | 11.00 |
| Mississippi | 36935.72 | 40667.00 | 3731.28 | 10.10 |
*real GDP/GSP divided by resident population
| Location | 2018 | 2023 | Change (#) | Change (%) |
|---|---|---|---|---|
| United States | 135623.63 | 145266.55 | 9642.92 | 7.11 |
| Texas | 139462.39 | 150735.25 | 11272.87 | 8.08 |
| Georgia | 132198.01 | 138147.85 | 5949.84 | 4.50 |
| Louisiana | 123171.08 | 127228.71 | 4057.63 | 3.29 |
| Florida | 119500.44 | 132537.75 | 13037.31 | 10.91 |
| Tennessee | 117876.99 | 127552.98 | 9675.99 | 8.21 |
| Oklahoma | 116022.43 | 118437.73 | 2415.30 | 2.08 |
| Missouri | 108602.46 | 117076.98 | 8474.51 | 7.80 |
| Alabama | 107919.53 | 113366.62 | 5447.09 | 5.05 |
| South Carolina | 107517.41 | 113727.19 | 6209.79 | 5.78 |
| Kentucky | 106680.30 | 111255.46 | 4575.16 | 4.29 |
| Arkansas | 99707.06 | 105769.74 | 6062.68 | 6.08 |
| Mississippi | 95486.56 | 101282.86 | 5796.30 | 6.07 |
*real GDP/GSP divided by employed workers
Forecast for Louisiana House Price Index
| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:04 | 364.85 | 367.755 | 370.66 |
| 2025:01 | 363.705 | 369.175 | 374.64 |
| 2025:02 | 362.2735 | 369.95 | 377.58 |
| 2025:03 | 360.055 | 370.32 | 380.58 |
Louisiana house prices as measured by the all-transactions price index are forecast to rise slowly over the current and succeeding three quarters. The forecast rate of growth over this period is only 0.98%.
Forecast for Alexandria Metro Area Non-Farm Employment (Thousands of Employees)
| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:04 | 61.33 | 62.10 | 62.87 |
| 2025:01 | 61.21 | 62.24 | 63.26 |
| 2025:02 | 61.14 | 62.35 | 63.56 |
| 2025:03 | 61.07 | 62.46 | 63.85 |
Employment in the Alexandria metro area is forecast to rise slightly over the current forecast horizon. The rate of growth in employment from the 3rd quarter of 2024 to the 3rd quarter of 2025 is forecast to be only 0.9%.
Forecast for Baton Rouge Metro Area Non-Farm Employment (Thousands of Employees)
| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:04 | 416.64 | 422.76 | 428.87 |
| 2025:01 | 416.47 | 424.40 | 432.33 |
| 2025:02 | 416.61 | 425.90 | 435.18 |
| 2025:03 | 416.40 | 427.34 | 438.29 |
Employment in the Baton Rouge metro area is forecast to continue its strong rebound from the pandemic-related plunge in employment. The rate of growth in employment from the 3rd quarter of 2024 to the 3rd quarter of 2025 is forecast to be 1.61%, the fourth strongest of any of the state’s metro areas.
Forecast for Hammond Metro Area Non-Farm Employment (Thousands of Employees)
| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:04 | 49.42 | 50.12 | 50.82 |
| 2025:01 | 49.42 | 50.26 | 51.09 |
| 2025:02 | 49.52 | 50.38 | 51.24 |
| 2025:03 | 49.56 | 50.49 | 51.41 |
Employment for the Hammond metro area is forecast to rise slightly from the 3rd quarter of 2024 to the 3rd quarter of 2025, at a rate of growth of 1.17%.
Forecast for Houma-Thibodaux Metro Area Non-Farm Employment (Thousands of Employees)
| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:04 | 84.92 | 86.42 | 87.91 |
| 2025:01 | 84.76 | 86.88 | 89.01 |
| 2025:02 | 84.90 | 87.45 | 90.01 |
| 2025:03 | 84.88 | 87.94 | 90.99 |
Employment in the Houma-Thibodaux metro area is forecast to continue its rise from the pandemic low. The rate of growth from the 3rd quarter of 2024 to the 3rd quarter of 2025 is forecast to be 2.23%, the second fastest forecast growth of the state’s metro areas.
Forecast for Lafayette Metro Area Non-Farm Employment (Thousands of Employees)
| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:04 | 203.11 | 206.34 | 209.57 |
| 2025:01 | 202.86 | 207.45 | 212.03 |
| 2025:02 | 202.88 | 208.45 | 214.03 |
| 2025:03 | 203.01 | 209.45 | 215.88 |
Employment for the Lafayette metro area is forecast to continue its rise from the pandemic low. The rate of growth of employment from the 3rd quarter of 2024 to the 3rd quarter of 2025 is forecast to be 1.97%, the third fastest of the state’s metro areas.
Forecast for Lake Charles Metro Area Non-Farm Employment (Thousands of Employees)
| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:04 | 94.87 | 97.14 | 99.40 |
| 2025:01 | 93.92 | 97.29 | 100.67 |
| 2025:02 | 93.29 | 97.55 | 101.82 |
| 2025:03 | 92.83 | 97.75 | 102.66 |
The rebound in employment in the Lake Charles metro area from the pandemic low is forecast to continue at a slow pace. The forecast growth rate from the 3rd quarter of 2024 to the 3rd quarter of 2025 is a low 0.87%.
Forecast for Monroe Metro Area Non-Farm Employment (Thousands of Employees)
| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:04 | 76.20 | 77.24 | 78.28 |
| 2025:01 | 76.12 | 77.40 | 78.69 |
| 2025:02 | 76.00 | 77.43 | 78.87 |
| 2025:03 | 75.97 | 77.61 | 79.26 |
Employment in the Monroe metro area is forecast to continue its slow rebound from the pandemic low. The forecast growth rate of employment from the 3rd quarter of 2024 to the 3rd quarter of 2025 is 0.88%.
Forecast for New Orleans-Metairie Metro Area Non-Farm Employment (Thousands of Employees)
| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:04 | 557.42 | 569.86 | 582.30 |
| 2025:01 | 556.71 | 572.97 | 589.23 |
| 2025:02 | 556.58 | 575.40 | 594.22 |
| 2025:03 | 556.15 | 577.72 | 599.28 |
Employment in the New Orleans-Metairie metro area is forecast to continue to rebound from the pandemic low. The forecast growth rate from the 3rd quarter of 2024 to the 3rd quarter of 2025 is 2.26%, the highest among the state’s metro areas.
Forecast for Shreveport-Bossier City Metro Area Non-Farm Employment (Thousands of Employees)
| Quarter | Lower Bound | Forecast | Upper Bound |
| 2024:04 | 174.77 | 177.58 | 180.38 |
| 2025:01 | 174.56 | 178.11 | 181.67 |
| 2025:02 | 174.57 | 178.57 | 182.57 |
| 2025:03 | 174.47 | 178.99 | 183.51 |
Employment for the Shreveport-Bossier City metro area is forecast to rise by a small amount over the forecast horizon. The growth rate of employment from the 3rd quarter of 2024 to the 3rd quarter of 2025 is forecast to be 1.14%.
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