Hurricane economics say these data will show Harvey’s fallout

Boats that sunk in the wake of Hurricane Harvey are surrounded by floating debris in Rockport, Texas

Washington: Days of torrential downpours and widespread flooding along Texas’ Gulf Coast courtesy of Harvey will soon take on another formation — several months of unsettled national economic data.

While the hit to US growth from natural disasters is limited due to the sheer size of the American economy, major weather events have typically led to significant swings in monthly data on employment, manufacturing and car sales.

Tropical Storm Harvey made landfall as a hurricane near Corpus Christi and brought the Houston metropolitan area to a standstill.

One of the first economic releases that will likely be impacted are applications for unemployment insurance. Expect to see a bump in jobless claims in Harvey’s wake. Looking back at past storms, the behaviour of jobless claims is consistent: Initial and continuing claims jump as displaced workers apply for financial assistance and businesses struggle to regain their footing. This development may take a few weeks to show up in the data.

“Once they pop, they are going to sit up there a while,” said Omair Sharif, senior US economist at Societe Generale in New York. Down the road, “payrolls are almost certainly going to get hit.”

The government’s survey of households, part of the monthly jobs report, is generally taken during the calendar week that contains the 12th day of the month. That’s also the reference period for the establishment portion of the employment figures. Harvey made landfall on August 25 and just recently moved away from the Houston area.

While that gives relief efforts more than a week to work their magic before the government surveys for its September jobs report, it almost certainly won’t be enough time to counter the kind of damage and mass disruption that continues to unfold in flood-ravaged Houston. It’s worth noting that Hurricane Katrina, which led to widespread devastation in…

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