According to an estimate by AccuWeather, the combined cost of Hurricanes Irma and Harvey could top $290 billion, an unprecedented level that could slow the American economy and hammer insurance company balance sheets. It will take months for the majority of the damage to be repaired. Most of the destruction was in Texas and Florida.
AccuWeather experts report that 2017 is the first time two Hurricane 4 level storms have hit the United States in a single year. Dr. Joel N. Myers, AccuWeather founder, president and chairman, said:
That is extraordinary by itself. And also unprecedented is that this particular storm, Irma, has sustained intensity for the longest period of time of any hurricane or typhoon in any ocean of the world since the satellite era began.
Several financial experts have weighed in on the impact on third-quarter GDP growth. Goldman Sachs has put the effect of Harvey at 1% of gross domestic product. AccuWeather says that taken together, the price of the two storms will be 1.5% of GDP growth in the period of mid-August through the end of the year. AccuWeather lists many of the reasons for its estimate:
- Disruptions to businesses
- Increased unemployment rates for weeks, and possibly months in some places
- Damage to transportation, infrastructure
- Crop loss, including cotton crop and 25 percent of orange crop, which will impact the cost of consumables for all Americans
- Increased gasoline, heating oil and jet fuel prices impacting all Americans
- Damage to homes, cars, furniture, antiques, jewelry and other valuables
- Loss of valuable papers, cherished belongings such as photos
These effects could influence inflation, the Federal Reserve’s decision to raise rates, the earnings and share prices of many public companies, the price of oil and gasoline, the percentage of income Americans have to pay for groceries and, on the positive side, demand for construction.