Recovery efforts for Hurricane Helene are just getting started in the southeastern U.S., as Hurricane Milton makes landfall in Florida. The back-to-back disasters less than two weeks apart will have a lasting impact on the economy, Atlanta Federal Reserve Bank President Raphael Bostic warned during the week of Oct. 6.
Bostic said hurricane season impacts could evolve over the next six months or more and is something the Fed will closely track. As Milton’s path becomes more clear, damage estimates range from tens to more than $100 billion in losses. Private insured losses from Helene are around $8 billion to $14 billion, Moody’s estimates.
“Hurricane Helene is by far the most impactful event of the current 2024 hurricane season thus far, though this may quickly change with Major Hurricane Milton due to impact Florida in the coming days,” Moody’s Chief Risk Modeling Officer Mohsen Rahnama said.
In the immediate aftermath, former Acting Deputy Labor Secretary Seth Harris told Straight Arrow News that jobs and employment data will be impacted.
“The hurricane is going to have a substantial effect on numbers coming out of the entire Southeast. We’re going to see a very large number of people who are temporarily laid off,” Harris said. “It’s hard to know exactly how long that’s going to last…The swath of the hurricane [Helene] was quite broad, and it hit a lot of population centers. So I think that is going to have a meaningful effect.”
Supply chain shocks are also expected post-hurricanes, especially with food, medicine and gas, as people rush for supplies. The storms hinder transportation routes which bottleneck delivering goods. In addition, Milton has the potential to damage major port infrastructure in Tampa and hinder trade routes nationally and internationally.
“When we think about a huge, horrific natural disaster with a huge human toll, we tend to focus solely on the negative sides of the economic impact – and for obvious reasons,” RiverFront Investment Group Chief Investment Strategist Chris Konstantinos told Straight Arrow News. “The cold, hard economic fact is [there are] gives and takes of what happens after a catastrophe like this. There are often two sides of it.”
“There’s going to be a huge amount of infrastructure spend,” Konstantinos added. “And so for companies, industry sectors that are construction related, sometimes these things can actually be a huge stimulus of sorts in those areas. And that may, at least regionally, actually increase some of the manufacturing data that we’re seeing.”
Konstantinos also said despite massive insured losses in the short term, insurance companies can benefit from major storms in the long run because they can lock in rate hikes. In Florida, home insurance rates are already the highest in the nation, with homeowners paying an average of about $1,000 per month for coverage that does not include flood insurance.
