New York Fed president sees greater impact from Sandy
NEW YORK -- Superstorm Sandy appears to have damaged the New York area’s economy more than initially believed, New York Federal Reserve president William Dudley said.
Although the monster storm’s impact has yet to be fully measured, Sandy’s toll on labor markets, manufacturing and the area’s infrastructure appears to be “more extensive and longer-lasting than first anticipated,” Dudley said in a speech prepared for delivery at Pace University.
Every firm that responded to the New York Fed’s manufacturing survey reported an impact from Sandy, with 40% indicating that the storm shut down or severely crippled their operations for at least five days.
The number of workers filing initial claims for unemployment insurance tripled in New York and New Jersey, Dudley added, suggesting the storm has cost at least 70,000 jobs in the two states so far.
Losses, in dollars, could be huge. The region contributes $1.4 trillion of the country’s gross domestic product, or $3.8 billion a day, Dudley said.
“These data suggest that the disruptions that we have seen, and continue to see, could be substantial,” Dudley said.
Still, rebuilding could help offset Sandy’s economic drag.
“Past studies suggest that reconstruction spending provides a powerful stimulus to local economies, both in its direct effects and its associated multiplier effects,” Dudley said. “Thus, I expect that reconstruction will provide a similar sizable boost to our regional economic activity, and one that is likely to continue well into 2013.”
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