Federal efforts to rein in inflation are weighing on Louisiana’s economy, with job growth now expected to be far less than expected and a full pandemic recovery delayed for years.
Louisiana’s economic activity Provide for the second quarter of 2022, released by University of Louisiana economist Gary A. Wagner last week, significantly reduced projected job increases for the coming year due to recent guidance from the Federal Reserve .
“Louisiana is now expected to gain about 21,000 jobs over the next four quarters, 40% less than last quarter forecast,” according to the forecast. “House prices and (gross domestic product) are also expected to slow sharply from the end of 2022 and continue into next year.
“The Houma-Thibodaux, Lafayette and New Orleans metro areas are expected to see the fastest job growth in the state in the coming year. Statewide, employment numbers remain approximately 5% below pre-COVID levels (approximately 81,000 jobs), with a full recovery not expected until 2024.”
The recent change in the economic outlook is mainly due to the Federal Reserve’s efforts to rein in runaway inflation which is expected to produce a slowdown later this year or early 2023.
“Following an inflation-adjusted growth rate of -1.4% in the first quarter, the outlook for the US economy has been downgraded (by professional forecasters) for the fourth consecutive quarter. Growth is now expected to reach about 2% on average over the next year,” according to forecasts. Learn more about Center Square.