Economic Perspective: Economic Impacts of the Hurricanes

NC State College of Agriculture and Life Sciences professor Dr. Mike Walden working in a recording studio.

MARY WALDEN:

“Today’s program looks at economic impacts of the hurricanes. Mike, the nation received an unprecedented one-two punch from Hurricanes Harvey and Irma. Clearly the storms caused immense economic damage in the affected areas, but will we see this reflected in national economic numbers?”

MIKE WALDEN:

“Well we now have a lot of experience. Economists who track economic impacts of hurricanes and there is a pattern. We think this pattern is going to be repeated now.”

“The initial impact of these hurricanes because of the damage they created, because of the fact that in the affected states people couldn’t get to work is going to be higher unemployment, probably a higher unemployment rate, a slowing pace of the economy (so the various measures of economic growth are going to slow).” “

We think maybe they could cut off from a point to a half percentage point in what we call GDP growth in the third and fourth quarters of this year. We shouldn’t panic when we see that because that’s standard.”

“So that’s the bad side. Now, if you can call it a ‘good side’, and I don’t really think this. Hurricanes are not good. There is probably going to be a rebound in the economy and faster growth, more people hired, lower unemployment when we come to the beginning of the year for maybe three quarters as the rebuilding effort starts.”

“So we’re probably going to see higher job increases, we’re going to see lower unemployment, we’re going to see faster GDP growth in the first couple quarters of 2018 and again this is a typical pattern.” “

Unfortunately for people like me, economists who are trying to track where the economy is headed, the next, maybe year, is going to be very, very difficult to see because first we’re going to have slower than normal growth then we’re going to have faster than normal growth due to these two hurricanes.”

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