For knocking the giant U.S. economy, it of course takes a lot. One month has passed after been destroyed by the deadliest storm which is ever recorded in North Atlantic. It’s becoming clearer how big economic impact Sandy Superstorm is having.
“Hiring process has almost come to a halt,” said Drum Associates CEO Brian Drum. “For competent people jobs are open and it seems that inventory is available but no decisions are being made by companies.”
The week after the storm, still about one third of 100 million sqft of the space of downtown office in New York alone was out of operation which is roughly the space of the total office accessible in downtown Houston.
About 1,000-mile-wide Sandy caused massive destruction, killing 113 people together with disrupting businesses from Marine to North Carolina, representing about one quarter of the U.S. economy.
Heavy rainfall with high winds, massive flooding and fires left thousands of restaurants and retailers closed. About 20,000 flights were cancelled. Miles of railways and roads were damaged or destroyed. Several nuclear reactors and financial markets were forced to shut down.
About 10 million workers of the coastal countries were thrown out of work because of shutdown of so many businesses. Some analysts expect that in spite of the healthy hiring pick up, a huge portion of employment will be washed away by Sandy.
“November payrolls are going to have an acute impact due to the hurricane. From a progress of 171,000 during October, hiring has slowed to 25,000 new jobs,” said economist of Deutsche Bank Joseph LaVorgna.
Even before the storm, China having slower growth and recession in Europe has slowed the global economy. Even after a month about thousand families are homeless and repairs costing millions are to be made. It is estimated that about $50 billion property damage are to be claimed from insurance companies.
The monthly data of retail sales and industrial production shows the chaos brought by the storm. According to Federal Reserve the total industrial output of the nation shrank by 0.4% mostly due to the shutdowns at makers of food, transportation equipment, and chemicals and electronic and computer products because of the storm.
Airlines suffered loss of millions of dollars from above 20,000 canceled flights. As estimated from IBISWorld, about $50 million is lost due to the shutdown of the commuter train network and subways of the New York City. The storm knocked the stock exchanges of New York and NASDAQ offline for about two days causing a loss of $150 million to the financial services industry.
“Almost 40 percent of mortgage applications fell in Connecticut, New York suffering 50 percent and new jersey more than 60%,” as told by the Mortgage Bankers Association. The storm hit the retailers the most. The Northeast’s retail spending has dropped by 20 percent.
It is estimated that 100,000 to 250,000 are to be replaced. This increased demand will increase the prices by about 1.5% nationally and it will be biggest in New Jersey and New York. Prices are to be slashed by store managers in order to avoid stuck with unsold goods.
With the rebuilding to take many months, it is hard to assess wider economic assess. “With strengthening the houses and replacing destroyed vehicles, economy is increasing. But Washington itself is becoming a cause to fear for,” economist Joel Naroff Quoted.