Two major hurricanes, Harvey and Irma, have devastated parts of the United States. This dynamic duo has incurred an extreme amount of expenses and has also critically affected the U.S. economy.
For background on the matter, Hurricane Harvey and Hurricane Irma have both been a nemesis to the United States recently. Hurricane Harvey, a category 4 storm, first hit Texas on August 25, 2017. Per Time Magazine, there have been at least 70 deaths stemming from Harvey. Harvey was one of the biggest catastrophes to ever hit the United States, followed soon after by Hurricane Irma. According to the Wall Street Journal, Hurricane Irma was a maximum-strength category 5 storm. It hit Puerto Rico on Wednesday, September 6 and Florida on September 10 as a category 4. The Hurricane quickly weakened to a category 2 as it headed to Tampa Bay. Irma then became a tropical storm by September 11, but has left 25 dead as a result.
Now that we have been caught up with the most recent data about the hurricanes, let us indulge into the world of our economy and how it has been affected.
First, look at some very broad but astonishing numbers. Hurricane Harvey has been accused of creating $70 to $90 billion in total U.S. losses including all types of damage. Hurricane Irma is estimated at amounting to $172 billion in total U.S. damage, as proposed by Chuck Watson of Enki Research. These numbers will immensely affect the U.S. economy and our growth as a nation, but these two hurricanes are not just messing with money says PNC Chief Economist Gus Faucher.
It has been recorded that Harvey and Irma have affected the job market in the United States and have slowed economic growth in the third quarter. The federal government reported that initial jobless claims heaved from 62,000 to 298,000 in just one week. These numbers are the highest they have been in more than two years, according to Paul R. La Monica of CNN. A relieving sigh comes from Christos Pargianas, a professor of economics at The University.
“The effect these hurricanes will have on the job market will not last. They increase unemployment in the short run by a little bit because of the disruption in economic activity, but then, when rebuilding begins, the level of employment will increase above its initial level. In the long run, there will be no effect,” Pargianas said.
As for the slowed growth in the third quarter, economists from Goldman Sachs, Moody’s and other firms state that their third-quarter GDP is going to get lucidly disturbed. Goldman Sachs now deems GDP will increase only 2 percent this quarter rather than the projected 2.8 percent before the hurricanes. Moody’s a huge firm, estimates their aggregate losses at $150 billion to $200 billion (including company output.)
On the bright side of things, countless economists see the fourth quarter making an improvement as rebuilding initiates, but no one knows for sure how things are going to turn out. Hurricanes affect the economy greatly as shown by the facts of Hurricane Harvey and Hurricane Irma. The country is dealing with a very depressing and hard time, but the values and morals of the American people exceed expectations as numerous charities and funds have been created to help those who have lost. Businesses, according to CNN, have donated over $157 million to Harvey relief and businesses have also donated about $160 million in relief for Irma.