A Look at the Catastrophic Economic Impact of Sandy

The hurricane's damage has long term effects

small-business-work-thru-hurricane-sandyThough the aftermath of Hurricane Sandy is largely unknown, the focus has turned to making sure that Americans affected get their power turned back on and get the help they need.

This much is known: Sandy is going to have significant impact on the economy as the year comes to a close.

Disaster modeling company Eqecat estimates that the storm has already caused $10 to $20 billion in damages and will wind up being one of the top ten costliest hurricanes in U.S. history. That said, the storm won’t touch the mayhem left after the 2005 hurricane Katrina, which totaled $108 billion.

The NYSE, Nasdaq and CME markets are all closed for two days in a row, not only halting trading but also hindering portfolio managers and investors from finishing the all important work that happens at the end of each month. The NYSE reopened Wednesday.

Productivity is taking a serious hit across the board. Airlines will see millions lost in revenue as close to 16,000 flights have been cancelled thus far, and more will continued to be cancelled in the coming days.

Companies are seeing a loss in production as workers are forced to stay home because of the store, and retail stores are taking a hit as the country heads into holiday season spending.

Experts say there will actually be a short-term stimulus to the economy before the dust settles.

“There’s a lot of money that’s been lost during this period of unproductivity…but, there’s a lot of money that will be spent over the next month, two months, three months to fix all of this infrastructure,” said Andrew Ross Sorkin, The New York Times financial columnist on MSNBC. “There is an argument that all of it does wash itself out. How that impacts, for example, GDP numbers or other things like is still an open question.”

The small silver lining out of the situation is that oil prices have not spiked as analysts feared because people are staying indoors.

The storm may also an important data set just days before the election. The Bureau of Labor Statistics has not decided if it will release the last jobs report of the year. The report is slated to be released on Nov. 2 and is an valuable indicator on which direction the economy is heading.

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