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Article published October 29, 2012
Storm’s cost may add up to $50 billion
WASHINGTON — Superstorm Sandy will end up causing about $20 billion in damages and $10 billion to $30 billion more in lost business, according to IHS Global Insight, a forecasting firm. In the long run, the devastation the storm inflicted on New York City and other parts of the Northeast will barely nick the U.S. economy. That’s the view of economists who say higher gas prices and a slightly slower economy in coming weeks will likely be matched by reconstruction and repairs that will contribute to growth over time. The short-term blow to the economy, though, could subtract about 0.6 percentage point from U.S. economic growth in the October-December quarter, IHS says. Retailers, airlines and home construction firms will likely lose some business. The storm cut power to about 7 million homes, shut down 70 percent of East Coast oil refineries and inflicted worse-than-expected damage in the New York metro area. That area produces about 10 percent of U.S. economic output. Hurricane damage to homes, businesses and roads reduces U.S. wealth. But it doesn’t subtract from the government’s calculation of economic activity. By contrast, rebuilding and restocking by businesses and consumers add to the nation’s gross domestic product — the broadest gauge of economic production. GDP measures all goods and services produced in the United States.