Wall Street is only slightly adjusting estimates for how the economy will fare to reflect the impact of Hurricane Ida.
Why it matters: The muted national economic impact that’s been penciled in doesn’t capture the human cost of the historic storm: millions displaced or without power as Southeast residents now brace for flash flooding.
What’s new: The storm could cause a 0.2% drag on GDP, weighed down by “higher energy prices, supply chain disruptions and extensive property damage,” per a new report by RSM chief economist Joseph Brusuelas.
- Moody’s will likely scale back its quarterly GDP forecast by a minimal amount, AP reports — but that would be made up for as rebuilding takes place.
What to watch: How long production remains offline for energy companies with major hubs along the Gulf Coast may impact gas prices.
- Of note: Futures for natural gas — used for electricity generation — spiked in the wake of the storm.
- Some 94% of average natural gas production in the region was shut down as of midday today, Reuters reports.
Any labor market impact would show up in the government's jobs report out in October.
- But jobless claims data next week could show an uptick of people filing for unemployment insurance in the region.
The big picture: The financial toll isn’t estimated to be nearly as dire as that of Hurricane Katrina.
- Analysts expect insured losses to be roughly one-tenth of the $90 billion-plus from Katrina, given Ida’s “wind field is smaller than Katrina’s, which likely narrows the area of catastrophic damage,” AP reports.
