Good luck figuring out Sandy's economic cost

sandy3.gif Moody's expects the storm to cause a "noticeable but temporary" effect on the U.S. economy. Certainly, there will be a loss in productivity over the next few days - quite possibly longer - and that will likely affect retail sales, jobless claims, car sales and housing starts. "While natural disasters take a large initial toll on the economy," said Moody's Ryan Sweet (via Real Time Economics), "they usually generate some extra activity afterward. We expect any lost output this week from Hurricane Sandy will be made up in subsequent weeks, minimizing the effect on fourth quarter GDP." Of course, if this does turn out to be a storm of the ages, the normal financial patterns of a disaster might be far worse. At this point (and it's way early), the storm is expected to result in as much as $10 billion in insured losses, according to a disaster modeling firm. From CNNMoney:

The catastrophe modeling firm Eqecat expects insured losses to range between $5 and $10 billion. The estimate includes damages to residential property, commercial property, energy production and the interruption of business, according to Tom Larsen, senior vice president of Eqecat. Weather research firm Kinetic Analysis Corp. estimates the storm will cause $6 billion in insured losses. Both estimates exclude flood damage. Flooding is insured by the federal government and could push damage costs up to $20 billion, according to the Eqecat analysis.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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