Hurricane Sandy may slow the world’s largest economy by keeping millions of U.S. employees from work and shoppers from stores in one of the nation’s most populated and productive regions.
The storm may cut economic output by $25 billion in the fourth quarter, according to Gregory Daco, a U.S. economist at IHS Global Insight in Lexington, Massachusetts. He said that could reduce the fourth quarter pace of growth to between 1 percent and 1.5 percent, from the firm’s earlier estimate of 1.6 percent.
Sandy probably will have a bigger impact on the economy than Hurricane Irene in August 2011, which caused flooding and cut power to almost 6 million U.S. homes and businesses from North Carolina to Maine. One reason: Sandy struck on Monday rather than Sunday, idling a larger number of workers, according to Daco at IHS Global Insight.
Oil companies were among those affected by the storm. Phillips 66 shut down its refinery in Linden, New Jersey, and Hess Corp. closed a facility in Port Reading, New Jersey, the Energy Department said. The Hess facility doesn’t process crude oil. Other refineries in New Jersey, Pennsylvania and Delaware reduced output, according to the department.
Natural disasters can be positive for growth, even as they take a toll in human suffering, some economists said. Thirty-eight deaths were reported in the U.S., according to the Associated Press. The storm was blamed for 69 deaths in the Caribbean, the AP said.