July 2024
Model Overview
Our sub-state model uses county level data combined into regional aggregates, with selected variables from our Indiana state model (IMI) as exogenous variables. Here we present a regional breakdown based on the state’s metropolitan statistical areas (MSAs).
The model has two modules. The first uses quarterly data from the Bureau of Labor Statistics to forecast variables for employment, wages, the labor force, and unemployment. The second uses annual data from the Bureau of Economic Analysis to forecast real GDP and major components of personal income. The annual module also presents population projections produced by others at the IBRC.
Metropolitan Statistical Area Forecast
Our current MSA forecast extends through 2027. Data from the BLS data for employment and wages end with 2023Q4, while those for the labor force and unemployment are available through 2024Q1. Data for the annual module goes through 2022.
The forecast shows considerable variation between MSAs related to the aftermath of the pandemic. Most MSAs show faster forecast employment growth relative to the past year. Exceptions are Indianapolis, Gary, Fort Wayne, Lafayette, Bloomington, and Jasper. In general regions with higher growth over the past year show slower growth going forward and vice versa. In addition, growth in the forecast period is held down by the economic slowdown we expect at the state and national level.
The forecasts for annual personal income growth are more uniform across MSAs. Income values for 2018-2022 are inflated by the rounds of COVID payments. As a result, all MSAs exhibit a slower income growth in the 2023-2027 forecast period compared to the previous five years.