It is the morning after the brunt of Hurricane Sandy and though we saw damage last night we are really going to see the full impact and scope of this massive storm today. According to Bloomberg, the economic toll of the biggest Atlantic storm that overtook America’s most populated city is going to exceed $20 billion.
“Sandy, spanning 900 miles, slammed into southern New Jersey at about 8 p.m. New York time and brought a record storm surge of 13.88 feet (4.2 meters) into Manhattan’s Battery Park. U.S. airlines have grounded about 12,500 flights, stranding travelers, and U.S. stock trading is closed again today in the first back-to-back shutdown for weather since 1888.”
This storm could subtract 0.1 to 0.2 percentage points from U.S. gross domestic product in the fourth quarter as spending drops on services such as restaurant meals, according to Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina.
We are looking at a loss of about two days commercial activity, spread over a week across 25% of the economy, according to Peter Morici, an economist and professor at the Smith School of Business at the University of Maryland School. “There’s a loss of activity that’s going to be hard to make up,” Vitner said yesterday. “If you’re a restaurant and you’re closed today, people are not going to eat two lunches tomorrow.”
Major Airports grounded 15% of their flights starting Oct.27 through yesterday and Newark and LaGuardia are closed. Boeing Co. (BA), the world’s largest aerospace and defense company, suspended operations at sites in Virginia, Maryland, New Jersey and Pennsylvania and will determine plans for the remainder of the week on a day-to-day basis. Major power terminals are also shutting down temporarily.
The storm forced the New York Stock Exchange to extend Monday’s closing to today — the first unplanned shutdown since the Sept. 11 terrorist attacks.
The impact of the storm could take a toll on holiday shopping as well. According to an analyst at Citigroup, Sandy may reduce November same-store sales by as much as 3% as traffic may fall 40% in storm-affected areas in November’s first week, which accounts for about 22% of the month’s sales. But this could shift more sales to online spending as a result.
On the plus side, grocery stores and home-improvement outlets are realizing net gains as customers stock up on water, generators, flashlights and batteries.”Our stores (from Florida to Maine) have been packed with people” since last week, says Paula Drake, a Home Depot spokeswoman.