Looking beyond COVID-19

Forecasts take the long view of economic change

The last regional macroeconomic forecast was released in the late 2010s, during one of the longest boom periods in history, when sunny economic times seemed like they might go on and on.

How things have changed.

During the week of April 12-18, there were 48,813 unemployment claims filings by workers in the region. Total filings since mid-March have been almost 400,000, according to state Employment Security Department data. The region’s unemployment rate was 5.3% in March 2020, up from 3.1% in February.

How will PSRC's models and forecasts account for the economic losses from the COVID-19 pandemic?

The regional model and forecasts focus on long-term projections, using trend data to develop the key equations that predict how many people and jobs the region can expect to add over the next 30 years.

The regional macroeconomic forecast is a “big picture” long-range forecast of jobs, population, and households at the regional scale. It provides inputs to PSRC’s suite of models and analytical tools and the future growth assumptions used to develop VISION 2050. Forecasts are developed by PSRC staff with help and review by technical staff from local government and the Office of Financial Management.

Since business cycle upturns and downturns are included in that trend data, the final forecasts are consistent with historical periods of stronger growth alternating with slowdowns over time. So while PSRC’s process does not forecast the exact timing of these periods, it does account for them when projecting growth to 2050. In other words, the cycles tend to even out.

An example can be found in the forecast developed in 1997. The year-to-year projections did not anticipate the two recessions between 2000-2010, but the long-range growth in jobs has compared well to actual experience.

However, the current pandemic may have far-reaching effects that are unknown today and are different from a typical business cycle. It could be months, if not years, before data on the full impacts of any downturn is available and analysts can identify fundamental changes in how the economy works and how people live that could significantly alter long-range forecasts.

PSRC's next regional forecast will include the best data available, with impacts from COVID-19 included as captured in measures such as job totals and unemployment.

PSRC anticipates an updated regional forecast no later than 2023, although current events and needs will continue to be monitored, with the schedule adjusted if needed.

As more data on the impacts from COVID-19 becomes available, PSRC will share findings showing the changes in key transportation, employment and population trends.