WASHINGTON (AP) — Hurricane Sandy has already caused the cancelation of thousands of flights, stranding travers. Insurers are expecting to have to pay up to $5 billion. Retailers are expecting smaller sales.
But for the overall economy, damage from the storm is expected to be limited. And analysts say any economic growth that is lost to the storm in the short run will probably be restored after reconstruction begins.
Preliminary estimates are that the damage will range between $10 billion and $20 billion. That could top last year’s Hurricane Irene, which cost $15.8 billion.
If so, Sandy would be among the 10 most costly hurricanes in U.S. history. But it would still be far below the worst — Hurricane Katrina, which cost $108 billion.
Hurricanes, like other disasters, can cause big losses — but also big spikes in economic activity afterward, as buildings are rebuilt or repaired. And Americans may spend more before the storm when they stock up on extra food, water and batteries.
Economic activity in October and November might slow if factory output declines, and if some workers are laid off temporarily and seek unemployment benefits. But the economy could strengthen in December as companies rebound.