A word not heard before during the past 17 Forecast Lake County Luncheons sponsored by the Lake County Chamber of Commerce — AI (artificial intelligence) — got people’s attention when economist Thomas Walstrum used it during part of his presentation.
A principal business economist at the Federal Reserve Bank of Chicago, Walstrum said AI is a new technology that does not appear to be giving a boost to the growth of the area’s gross domestic product (GDP) this year, but will likely affect businesses in a variety of ways.
“It is a new technology which will increase productivity, but we’re not sure when or how,” Walstrum said after the meeting. “We don’t fully understand the concept yet, but it’s only going to get better, I hope.”
Walstrom presented a picture of a growing economy, both nationally and for the Chicago area, to more than 100 people at the chamber’s 18th annual Forecast Lake County Luncheon on Tuesday at the Greenbelt Cultural Center in North Chicago.
Forecasting a 2.2% growth in the GDP in 2026, Walstrum said it is a healthy number generally driven by an expanding labor force. It does not appear AI is impacting the direction of the economy at this point.
“It is pretty close to what it should be, and that’s just fine,” Walstrum said. “It’s not too hot and not too cold. When it’s too hot, you can get inflation. When it’s too cold, you can get unemployment. The economy was pretty close to that last year. Chicago is generally slower, but it will follow the United States’ pattern.”
Though the role of AI in the economy is not yet certain, Walstrum said he has found it useful in his work as an economist. When he uses AI designed to help economists, he finds efficiency that was not there before.
“There’s some pretty good stuff which helps me when I’m doing research,” he said. “It used to take me longer to digest all the research. That’s a pretty good example of how it helps.”
Darlene Bembry, a real estate broker with Real People Realty active in Lake County, was at the event. Like Walstrum, she does not know how AI will impact the residential real estate business. She considers the human element vital.
AI holds long-term promise, but it hasn’t yet translated into measurable productivity or wage growth,” Bembry said in an email. “In real estate, it will enhance data and efficiency over time, but it won’t replace the human relationships that drive the market.”
Like Walstrum, Shaunese Teamer, the chamber’s executive director, said after the event, she has found AI useful at times. After she writes something, she will see what AI can do. There are times she gets good suggestions from it.
“Some of the words are good and creative,” Teamer said. “It helps us find more information. We have to wait and see everything AI will do.”
Maureen Riedy, the president of Visit Lake County, said after the event she liked what she heard overall about the economy and the growth forecast for the year. She looks forward to seeing how it will impact the hospitality industry, which is the primary focus of her organization.
“A lot of spending on the hotels and restaurants is discretionary and is built on consumer confidence,” Riedy said. “Labor costs and food costs are important to us. There is some uncertainty as we go into 2026.”
Bembry said at this time the residential real estate industry is in “recalibration, not crisis.” Home prices in the Chicago area remain strong, more so than in other areas. Walstrom said he anticipates a 0.5% drop in interest rates by the end of the year. Bembry said they are crucial to real estate.
“Demand remains intact, but interest rates, policy uncertainty, and demographics are shaping how and when people make housing decisions,” Bembry said. “People are being more cautious and strategic in this time of uncertainty.”
While some people are feeling a pinch from the cost of goods they purchase, Walstrum said, when forecasting inflation, it is based on the increase or decrease of a variety of goods taken together.
Though the target set by the Federal Reserve for inflation is 2%, Walstrum said the forecast by the end of the year is 2.7%.