Superstorm Sandy’s economic toll on the USA is set to exceed a whopping $20billion after the largest ever recorded storm smashed its way along the Eastern seaboard. Homes, offices, roads and subways have all suffered heavy damage in some of the nation’s most populated cities.
Sandy made landfall at 8pm New York Time with its first victim being New Jersey. The storm created a record breaking tidal surge of 13.88 feet that swept into Manhattan and caused extensive flooding in numerous other locations. The record high tides combined with hours of heavy rainfall and gale force winds damaged New York’s power grid causing the complete shutdown of the world’s financial capital. The power outage affected more than 2.1 million people reaching from North Carolina all the way up to the Canadian border.
The New York stock markets have been closed for a second day and doubts remain over whether the markets will reopen on Wednesday. Yesterday’s closure of the markets is the first time the stock markets have been forced to close due to weather for 27 years.
As a consequence of the storm the US Dollar has weakened against the majority of its counterparts and the Canadian Dollar has slumped below parity with its US Dollar relation for the first time since August as the markets take a risk adverse approach to the region.
Economists are concerned over the storms impact to the USA’s slowly recovering economy. The nation’s economy grew by 2% in the third quarter of 2012 picking up from earlier in the year but it is still a weak number, consumer spending helped to offset a worrisome pullback in business investment. Many analysts are concerned that retail sales could suffer later this year.
Retailers bear a significant brunt of any storm’s economic impact as shoppers stay at home. Last-minute scrambles for supplies and emergency goods should have a moderating effect on the overall sales declines.
In a bizarre twist the storm could have a long term gain to the country’s economy as the sheer amount of reconstruction work that will be needed to repair the damage could end up boosting a future GDP figure and lead to increased spending for materials, man power and could lead to an increase in jobs as the demand for labourers increases.
Gross domestic product in the region between New York and Washington amounts to some $2.5 trillion, so that every day the region’s economy grinds to a halt amounts to about $10 billion in foregone output
Mark Zandi, chief economist at Moody’s Analytics said; “The monthly economic data will become more volatile – October retail sales, vehicle sales, and industrial production will be hurt, but they will bounce back in November and December. Restaurants will be hurt, but grocery stores will benefit; general merchandise stores will lose business, but online retailing should get a boost. Of course, if the storm knocks out major infrastructure like refineries, cell towers, trains, sea and airports, then the economic damage will be more severe and difficult to recover from.”
As of 10:15 am
The Pound to Euro exchange rate is currently trading at 1.2404
The Pound to US Dollar exchange rate is currently trading at 1.6057
The Pound to Australian Dollar exchange rate is currently trading at 1.5475
The Pound to New Zealand Dollar exchange rate is currently trading at 1.9525
The Pound to Canadian Dollar exchange rate is currently trading at 1.6063
The Pound to Japanese Yen exchange rate is currently trading at 127.4800
The Euro to US Dollar exchange rate is currently trading at 1.2906
The Euro to Pound exchange rate is currently trading at 0.8059
The Euro to Australian Dollar exchange rate is currently trading at 1.2472
The Euro to New Zealand Dollar exchange rate is currently trading at 1.5736
Comments are closed.