Sandy’s Economic Toll

Screen Shot 2012 11 30 at 9 28 23 AM

Bill McBride largely blames the spike in first-time weekly unemployment claims on Hurricane Sandy. Stephen Bronars adds:

Hurricane Sandy had a devastating effect on employment in New Jersey and a fairly large impact on employment in New York, as well. A leading indicator of unemployment is the weekly report of new unemployment insurance claims. A spike in new jobless claims means that a large number of workers were displaced from their jobs. New Jobless claims have quadrupled in New Jersey and doubled in New York in the aftermath of Sandy relative to November 2011.

Using these data I estimate that Hurricane Sandy displaced 150,000 workers in the first two weeks after the storm hit, with 70,000 jobs lost in New Jersey and 50,000 lost in New York. These job losses could push the November unemployment rate above 11% in New Jersey and above 9% in New York.

Bronars also looks at how this could affect national economic performance:

The storm’s displacement of 150,000 workers in the past two weeks is enough to increase the U.S. unemployment rate from 7.9% to 8.0%. Hurricane Sandy is also likely to increase the unemployment rate to 11% in New Jersey (from its current 9.7%) and above 9% in New York (from its current 8.7%).   

(Chart from Bronars Economics)