Disruptions of commerce in the nation’s most populous regions. Shipments of goods through eastern seaports delayed. Stores closed, workers staying home. Property destroyed. Gasoline price hikes.
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All of this adds up to the blow Hurricane Sandy will give to the US economy, a blow that will reach beyond the devastation of the states of New York, New Jersey, and others that lay in her path.
The short-term damage will likely cause the overall economy to grow at a slower pace during the last quarter of the year, just as segments like housing, construction, and retail sales were starting to pick up.
IHS Global Insight estimated the storm could reduce annual economic output by .6%. Yet this estimate only measures economic output and does not include the damage to wealth and property.
More damage estimates could come in over the next few days due to flooding although many property losses will be covered either by private or government insurance.
Sandy’s reach was over a much larger geographical area than most storms, hitting larger swaths of the population, a wider variety of industries, and hitting during the week instead of on the weekend like Hurricane Irene.
Gasoline futures prices spiked 10 cents to 15 cents per gallon in anticipation of the storm’s damage. This is much less than the 45 cent hike before Irene. Any price spike that filters down to the consumer is anticipated to only last a few days.
Government economic reports, primarily the unemployment report
for the month of October, will come out on time since the data used for the report are based on surveys conducted earlier in the month.