// BEGIN editorial data var i = 0; var KatrinaEconomics = new Array(); KatrinaEconomics.ID = "KatrinaEconomics"; KatrinaEconomics.ID_WB = 9241603; KatrinaEconomics.sPubDate = "9/7/2005 9:21:52 PM GMT"; KatrinaEconomics.navsectionID = "3032221" KatrinaEconomics.appFmt = 2; KatrinaEconomics.itemsPerPage = 1; KatrinaEconomics.appWidth = 460; KatrinaEconomics.appHeader = "fact file|Katrina’s economic impact"; KatrinaEconomics.appFooter = "Source: MSNBC.com research"; KatrinaEconomics.appNavStyle = 3; KatrinaEconomics.appLayout = 3; KatrinaEconomics.copyHeight = 250; KatrinaEconomics.copyWidth = 320; KatrinaEconomics.copyMargin = 9; KatrinaEconomics[i++] = new Array("","","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); KatrinaEconomics[i-1].body = "Hurricane Katrina devastated a region accounting for perhaps 1 percent of the nation’s total economic output. Overall damages, which could top $100 billion, are equal to less than 1 percent of the nation’s $12 trillion annual output. But the lost oil production and transportation bottlenecks are having a far wider impact. Here are some of the ways in which the storm and its aftermath are likely to affect the national economy."; KatrinaEconomics[i++] = new Array("","GDP","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); KatrinaEconomics[i-1].body = "
The loss of economic output from businesses shut down by Katrina and a related slowdown in consumer spending are likely to cut 0.5 percent from the nation’s overall growth rate in the current quarter, and possibly 0.5 percent in the fourth quarter. But GDP is still expected to grow at an above-average pace of 4 percent in the third quarter, slowing to 3.3 percent in the fourth quarter, according to Lehman Bros. Lost output is likely to be more than offset by an economic boost late this year and early next year as federal aid and private insurance money pours into the Gulf region for recovery and reconstruction."; KatrinaEconomics[i++] = new Array("","Energy","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); KatrinaEconomics[i-1].body = "
High gasoline prices and winter fuel prices will act as a tax on consumer spending, sapping growth over the next few months. Energy prices have fallen a bit from peaks hit in the first few days after the storm, but Katrina is disrupting an already-tight market. Heating costs will leap 71 percent this year for users of natural gas and 31 percent for users of heating oil, the government estimates. Some economists are worried about the potential for fuel shortages and panic buying that could devastate consumer confidence."; KatrinaEconomics[i++] = new Array("","Fed policy","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); KatrinaEconomics[i-1].body = "
Prior to Katrina, analysts had almost unanimously expected the Federal Reserve to raise short-term interest rates by another quarter-percentage point at its next meeting of policy-makers Sept. 20. That move is no longer seen as a sure bet, although some forecasters still expect the central bank to push rates higher at least three more times before the current tightening cycle is complete. The Fed now faces a more difficult balancing act, trying to decide whether higher energy prices are more likely to slow economic growth or trigger inflation."; KatrinaEconomics[i++] = new Array("","Insurance","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); KatrinaEconomics[i-1].body = "
Katrina could end up being the costliest disaster ever for the insurance industry, one top executive predicted Tuesday. The ultimate cost to the industry could be closer to $50 billion than $35 billion, said Dane Douetil, chief executive of Brit Insurance Holdings Plc. Other executives have been more cautious, but the disaster clearly will be one of the costliest ever. The Insurance Information Institute, an industry trade group, predicts insured property losses will be in the same category as Hurricane Andrew in 1992 and the terrorist attacks of 2001, both of which topped $20 billion in today’s dollars."; KatrinaEconomics[i++] = new Array("","Employment","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); KatrinaEconomics[i-1].body = "
Hurricane Katrina is likely to cost the economy 400,000 jobs in coming months, according to an estimate from the Congressional Budget Office. The national decline in employment probably will send the unemployment rate to 5.1 or 5.2 percent, compared with the August rate of 4.9 percent, analysts said."; KatrinaEconomics[i++] = new Array("","Agriculture and food","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); KatrinaEconomics[i-1].body = "
Hurricane damages to farm-related industries will cost more than $2 billion and could increase food prices, according to the American Farm Bureau Federation. The estimate includes $1 billion in direct damages to crops and livestock and another $1 billion in increased shipping costs and fuel prices. Wholesale coffee prices could surge from the current $1 a pound to $1.45 in coming months in part because of huge losses at New Orleans warehouses and roasting plants, one analyst predicted."; KatrinaEconomics[i++] = new Array("","Reconstruction","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); KatrinaEconomics[i-1].body = "
Congress already has allocated $10.5 billion toward recovery efforts and President Bush intends to seek an additional $40 billion, one congressional source said. Senate Democratic leader Harry Reid said recovery and relief costs ultimately could top $150 billion. Insurance payments for property damage are likely to total $20 billion more. Industries ranging from construction to hospitality will benefit from the injection of funds."; KatrinaEconomics[i++] = new Array("","Transportation","","","","", "", "", "", "", "", "", "", "", "", "", "", "", "", ""); KatrinaEconomics[i-1].body = "
The energy price spike caused by Katrina could be the final blow for airlines teetering on the brink of bankruptcy protection including Delta Air Lines and Northwest Airlines. Other transportation providers like UPS and FedEx are scrambling to raise surcharges to stay ahead of surging fuel costs."; // END editorial data