At the moment, it’s impossible to estimate the damage from Sandy but it will have a meaningful impact on GDP. Early estimates (guesstimates, no doubt) are around $10 billion, which is far short of the $81 billion from Katrina.
Spending will be ramped up due to insurance claims and reconstruction. In return, insurance premiums will go up, which will curtain spending over the long term.
At the same time, the total lack of economic activity for at least two days in the largest cities in the US will cut economic production and skew upcoming economic data. But there was also a pre-hurricane surge in spending on supplies.
In total, there are just too many moving parts. It was already difficult to get a clear look at the US economy in Q4 due to the election and the fiscal cliff — now it will be downright impossible.
