The U.S. economy may be headed toward a recession in early 2023, but economist Loren Scott said he thinks Louisiana and the Acadiana area will continue to add jobs despite the economic uncertainty.
Scott spoke to One Acadiana members on Wednesday, delivering his annual forecast for the statewide economy. During his presentation, Scott looked at some of the region’s recent economic successes, how the oil and gas industry may change moving forward and how the region could weather a potential recession in the next year.
“I really think there’s going to be a recession starting in the first quarter,” Scott said.
How could Louisiana and Lafayette handle a recession?
Economists and forecasters are split on whether the national economy will slide into a recession in the next year, but Scott said he thinks the U.S. will begin a short and shallow recession in 2023.
Scott used figures from Wells Fargo’s U.S. Economic Forecast which predicts the country having negative GDP growth in the second quarter of 2023 through the fourth quarter of 2023. The forecasted declines are fairly slight compared to other recessions, particularly the “Great Recession” that began in 2007.
The recession, Scott said, would be brought on by a ripple effect of factors stemming from the historically-high inflation rate. The Federal Reserve is raising interest rates and removing some money from the economy, which will slow down the overall economy.