Despite the wide path of devastation left by Hurricane Florence, its effect on the U.S. economy is likely to be modest.
As USA Today reports, the storm is projected to shave economic growth in the current quarter by one to two-tenths of a percentage point, according to Moody’s Analytics, as residents forgo trips to the mall or restaurants and manufacturers temporarily shut down production.
That means an economy projected to grow a robust 3.9% in the current quarter could instead expand by a still healthy 3.7%.
The damage to homes, businesses and public infrastructure is expected to total $16 billion to $20 billion, Moody’s estimates. Such estimates are still in flux because of severe flooding that could last for days. Florence has killed at 20 people and disrupted the lives of millions.
Oxford Economics expects the fallout could be more extensive. Florence could trim third-quarter growth by two to three-tenths of a percentage point, Oxford’s chief US economist, Greg Daco, figures. And he estimates losses or damage to the infrastructure of $30 billion to $40 billion.
Either the Moody’s or Oxford estimate would still place Florence among the top 10 costliest hurricanes in U.S. history.
Most of the lost economic output is likely to be made up in the fourth quarter as consumers make purchases they deferred and replace damaged vehicles, and repairs begin on effected homes and businesses.
Hurricanes Harvey and Irma last year sliced U.S. economic growth in the third quarter by about half a percentage point. And the storms caused a whopping $180 billion in damage.
