Junjie Guo
Executive Summary:
We use a mixed-frequency vector auto-regression model to forecast the U.S. and Wisconsin economies through the end of 2024.
For the United States, the model suggests that:
- real GDP will grow by about 2.2% in 2023 and 1.6% in 2024; the probability that real GDP will decline in two consecutive quarters is 6.7% for the second half of 2023 and 24% in 2024;
- the unemployment rate will remain around 3.5% in 2023 and rise to 4% by the end of 2024;
- inflation will remain above 3.3% in 2023 and drop to 2.5% by the end of 2024;
- the federal funds rate will remain around 4.9% in 2023 and drop to 4.4% by the end of 2024.
For Wisconsin, the model suggests that:
- real GDP will grow by about 1.5% in 2023 and 1.8% in 2024; the probability that real GDP in Wisconsin will decline in two consecutive quarters is 6% for the second half of 2023 and 19% in 2024;
- the unemployment rate will rise to about 3.3% by the end of 2024;
- housing prices will increase by about 4% in both 2023 and 2024.