Updated 11/29/2012 07:18 PM
Federal Reserve: Too Early To Measure Sandy's Economic Impact
Calculating the economic costs of Hurricane Sandy is an inexact science. Mayor Michael Bloomberg and Governor Andrew Cuomo have issued their own figures, and Thursday, the Federal Reserve Bank of New York weighed in. NY1's Bobby Cuza filed the following report.
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Governor Andrew Cuomo put the total price tag from Hurricane Sandy at $32 billion. Mayor Michael Bloomberg said in the city alone, the damage totaled $19 billion. So just how real are those figures, anyway?
"We just honestly don’t know yet," said Jason Bram, an economist at the Federal Reserve Bank of New York.
The Federal Reserve Bank of New York gave a briefing Thursday on the storm’s economic impact. It’s a tricky business, in part because some businesses will make up for lost time, and where retailers were hard hit, business didn’t necessarily disappear. It may have just gone elsewhere.
"People who couldn’t go out to eat in lower Manhattan because nothing was open will eat in Midtown, uptown, Brooklyn, wherever they are," Bram said.
Still, the New York Fed did present some startling figures. More than 300,000 homes were damaged or destroyed in New York, 4 percent of the state’s housing stock. New unemployment claims spiked by 45,000 in the week after the storm. An estimated 40,000 city residents need shelter. And a survey of manufacturers found major disruptions.
"Every downstate respondent that responded to our survey reported some reduction in activity," Bram said. "Every single one."
That includes 40 percent who said they were severely crippled for at least five days.
Economists at the Federal Reserve said if history is any guide, early storm damage estimates could end up on the higher side. That’s what happened after the city’s last major disaster, the terror attacks of September 11th.
"It turned out that at that time, a lot of the preliminary estimates, both in terms of the physical damage and the economic disruptions, happily ended up being higher than what seemed to have turned out," Bram said.
Some industries, like construction, could actually see a post-Sandy boost. It may be little consolation to those who were devastated, but it’s part of the reason the Fed estimates the regional economy will bounce back from the hurricane by early next year.