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Counting the Economic Cost of Hurricanes
The initial damage costs from Hurricanes Harvey and Irma are coming in better than expected, though analysts are concerned the blow could slow U.S. GDP 1% this year. DS Economics predicts overall U.S. economic growth this quarter will drop to 1.8%, compared to projections of 2.8% growth before the storms.
Widespread devastation and damage will be in the billions of dollars in two economically important states. Texas accounted for 8% of total U.S. economic output last year, and though Florida is about half that, Irma’s impact will be felt across a wide range of industries, from tourism, ports, business services and health care. The lost economic output is primarily from the shutdown of tourist-related businesses.
Analysts expect a rebound in those markets in the fourth quarter, provided insurance payouts proceed smoothly, and workers and materials can be found to meet demand. Shortages existed in both states before the storms hit.
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