Storm Keeping Millions From Work May Slow Economic Growth
By Jeff Kearns - Oct 31, 2012 10:35 PM GMT+0530Atlantic superstorm Sandy may cut U.S. economic growth as it keeps millions of employees away from work and shuts businesses from restaurants to refineries in one of the nation’s most populated and productive regions.The storm may cut output in the world’s largest economy by $25 billion in the fourth quarter, according to Gregory Daco, a U.S. economist at IHS Global Insight. He said that could reduce the fourth quarter pace of growth to a range of 1 percent to 1.5 percent, from the firm’s earlier estimate of 1.6 percent.Sandy lashed a region with 60 million people -- about as many as Italy -- that accounts for about a quarter of the $13.6 trillionU.S. economy, estimated Eric Lascelles, the Toronto- based chief economist at RBC Global Asset Management Inc. It forced the temporary closings of U.S. financial markets, halted air and rail service and idled workers for the federal and state governments from Virginia to Massachusetts.“If people aren’t going to Broadway shows and restaurants and hotels, all those businesses that rely on people spending money are going to take a hit for sure,” said Stephen Bronars, a senior economist at Welch Consulting in Washington and an adjunct professor at Georgetown University. “People are still going to go out and buy a car or other durable goods they need, they’re just not going to do it this week. There will be winners and losers.”
Slower Growth
The storm may reduce gross domestic product by as much as 0.2 percentage point this quarter, said Mark Vitner, a senior economist at Wells Fargo & Co. in Charlotte, North Carolina. The cost in lost output may come to about $30 billion, he said. The storm will probably have “a modest negative effect of a few tenths of a percentage point” on retail sales, construction spending, and industrial production in October, Goldman Sachs Group Inc. economists led by New York-based Jan Hatziuswrote in a note to clients today. The indicators then may show “slightly stronger growth than would otherwise have been the case” into the first few months of 2013, they said.....................http://www.bloomberg.com/news/2012-10-30/hurricane-sandy-may-slow-economy-as-workers-stay-at-home.html
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